Press Release - Smarter food procurement in the public
sector
30 March 2006
The public sector could save annually over £220 million in food
and catering costs by 2010-11, while raising nutritional standards
and increasing sustainability, Sir John Bourn, head of the National
Audit Office, has reported today. In particular, there is
significant scope for improvement by increasing joined up
procurement, implementing good practice, enhancing the roles and
improving the development of catering staff in the public sector
and increasing the take up of meals.
The public sector in England spends around £2 billion per year
on food and catering services. The NAO looked at a full range of
public sector catering but with particular focus on schools,
hospitals and armed forces bases.
Progress has been made in improving the efficiency, quality and
sustainability of public food procurement in recent years. For
example, the armed forces have centralised their procurement
through the MoD’s Defence Catering Group and the NHS Purchasing and
Supply Agency has developed a series of national contracts. Both of
these initiatives have brought savings through economies of scale
and a better understanding of ingredient and delivery costs. Some
hospitals have worked together to develop a more sustainable supply
chain, for instance by working with smaller suppliers to enable
them to compete more effectively for hospital food contracts. The
Department for Education and Skills will be introducing new
nutritional standards for school lunches to be compulsory from
September 2006 which will offer a benchmark for schools and parents
to assess the quality of school meals.
However, there are areas where further improvements could be
made. There is considerable variation in the prices paid by public
bodies for similar items; for example, the price of a pint of milk
varied between 17 and 44 pence and a loaf of wholemeal bread cost
between 32 pence and £1.10. The NAO estimates that £40 million can
be saved by getting lower prices for the same or better quality
food ingredients. In addition, a further £80 million can be saved
by more joint purchasing to exploit the buying power of the public
sector. A survey conducted as part of the study found that more
than half of public sector organisations did not engage in any
joint buying despite the fact that 44 per cent of these
organisations use at least two of the same major suppliers.
There is also a lack of transparency in contract caterers’ charges,
with firms routinely obtaining hidden discounts and rebates, but
not passing these back to the public sector. The public sector
should do more to negotiate an increased share of these savings,
which could be worth around £30 million a year.
There is widespread evidence of deficiencies in both catering
skills and facilities throughout the public sector. For example,
many hospitals and schools no longer have their own kitchen
facilities and in some sectors there is a shortage of trained
chefs, reducing the scope to prepare meals using fresh
ingredients.
The NAO has produced a guide to help public sector organisations
improve the efficiency, quality and sustainability of their
catering services, drawing on examples of good practice from both
the public and private sectors.
Sir John Bourn, head of the NAO, today
said:
“While many public bodies have made progress in
achieving better value for money from their catering services,
there is still much to do to improve performance. The principal
lesson is that gains in efficiency need not be at the expense of,
indeed can go along with, improvements to the quality of food and
sustainability.”
Notes for Editors:
- Food procurement in prisons has recently been covered by the
NAO in a separate report, Serving time: Prisoner
diet and exercise (HC 939, 9 March 2006).
- To help organisations implement the recommendations and realise
the potential for financial savings, the NAO has highlighted good
practice in two associated volumes.
- The Government’s public procurement policy is based on value
for money, having due regard to propriety and regularity. Value for
money is defined as "the optimum combination of whole life cost and
quality (or fitness for purpose) to meet the user's requirement".
Public bodies are also required to comply with the EC Treaty and
the EU Procurement Directives (the ‘EU rules’) which ensure that
public procurement is fair, transparent and
non-discriminatory.
- The Department for Education and Skills are providing
transitional funding of £220 million to schools and local
authorities over three years from September 2005 in order to
improve school meals.
- The Department for Environment, Food and Rural Affairs is
responsible for the Public Sector Food Procurement Initiative which
aims to achieve a more sustainable approach to food
procurement.
- Prices and reports are available from the date of publication
on the National Audit Office website at www.nao.org.uk. Hard copies
can be obtained from The Stationery Office at www.tsoshop.co.uk/bookstore.asp
or on 0870 242 2345.
- The Comptroller and Auditor General, Sir John Bourn, is the
head of the National Audit Office which employs some 800 staff. He
and the National Audit Office are totally independent of
government. He certifies the accounts of all government departments
and a wide range of other public sector bodies, and he has
statutory authority to report to Parliament on the economy,
efficiency and effectiveness with which departments and other
bodies have used their resources.
Press Notice 29/06
All enquiries to Mark Anderson, NAO Press Office:
Tel: 020 7798 7558
Mobile: 07796 937119