The loss-making service provides 20,000 meals a day
LTS provides 20,000 meals a day(Image: Getty Images)
Leicestershire County Council’s loss-making schools meals service which delivers 20,000 meals a day will be axed after officials said it was “unviable” in the long term.
The service, which is delivered by Leicestershire Traded Services (LTS), provides 20,000 meals a day to 119 schools across Leicestershire, but the service has been loss-making for some time. LTS ended 2024/25 with a loss of £329,000 – a figure which the county council said was a “significantly improved position” on the £1.9 million lost the previous year.
Despite that improvement, the county council’s cabinet took the decision to close the service at a meeting behind closed doors in July. News of LTS’ axing was revealed this week following a report of the council’s scrutiny commission.
Presenting the report on Monday (November 10), Richard Hunt, the county council’s head of catering, hospitality and country parks, said that LTS had acquired a number of contracts in Leicester City after the closure of its city catering service.
However he said the service, which will finish at the end of the current academic year, had also lost a number of contracts as multi-academy trusts retendered their catering provision.
He revealed that this year the school food service was forecast to make £41,000, but continued financial pressure from elsewhere meant LTS could not continue in the long-term, while the industry itself was “rapidly” changing.
Mr Hunt pointed towards challenges relating to staff cost inflation of 5.8 per cent – a figure driven by national living wage rises – and food inflation of 3.4 per cent in the year to April 2025. In addition, he said Universal Infant Free School Meals (UIFSM) funding from central government had failed to keep pace with inflation.
Leicestershire County Council’s loss-making schools meals service is being axed(Image: Publicity Picture)
Mr Hunt said: “Following feedback from the scrutiny commission at their meeting in March 2025, the cabinet considered a report on the future of the school food service and agreed to close the service from the end of the current academic year.
“And this was in recognition that despite our improved financial position, the world of school food is changing rapidly with retendering of services by academy trusts and the desire from schools for an overall cheaper service which LTS cannot provide.
“All schools and staff were notified in September and we are supporting those schools who have requested it to assist them in finding a new caterer for the start of the academic year”.
The county council said it was working with schools to ensure a “smooth transition” for those impacted by LTS’ axing. A spokesperson said: “The school food industry has changed rapidly and has been loss making for Leicestershire County Council for several years. Despite a recent positive upturn in performance, the long-term outlook shows the service is unviable.
“A mixture of schools and academy trusts retendering their school catering, and their desire for cheaper services has created an environment in which we expect that we cannot compete with without making further losses.
“We are leading procurement for a large number of the affected schools to make sure there is a smooth transition to a new supplier next summer.
“The other schools – including most academies – have chosen to procure their own catering providers. It is expected that the vast majority of staff will transfer any new catering provider under TUPE protections.”
News of LTS’ axing comes as the Department for Education (DfE) said meal rates for the academic year 25/26, including UIFSM, have been increased to £2.61 per meal, which comes to £495 annually per child.
A DfE spokesperson said: “Through our Plan for Change, this government has taken a historic step to tackle the stain of child poverty – offering free school meals to every single child from a household that claims Universal Credit. The new entitlement will see over half a million more children able to benefit from a free meal from next school year and lift 100,000 children out of poverty.
“Schools are responsible for providing free meals to eligible children and we work with the sector and local authorities so that children continue to have access to this vital support in all circumstances.”
