05 February 2021

Government ‘missed opportunities to reduce cost to taxpayer of voucher scheme’

05 February 2021

The Department for Education (DfE) failed to renegotiate the terms of a contract with the provider of free school meal vouchers and secure better value for money for the taxpayer, MPs have warned.

Contractor Edenred struggled to cope with the demand for vouchers from families with children eligible for free school meals (FSMs) during the first lockdown, causing “unacceptable” delays, the report said.

The Commons Public Accounts Committee (PA ) said the DfE was “surprisingly unconcerned” about whether Edenred was profiting from the national voucher scheme at the taxpayers’ expense and it “missed potential opportunities to reduce the cost or share in the profits”.

The contract was extended twice – increasing its value fivefold from £78 million to £425 million – but the DfE failed “to renegotiate the terms and secure better value for money for the taxpayer”, MPs said.

Government’s failure to learn from its repeated contracting mistakes, over and over, large and small, is costing this nation too dear

Committee chairwoman Meg Hillier said the Government’s failure to learn from contracting mistakes is “costing this nation too dear”.

The PAC report also warned the DfE underestimated how schools and parents would use the scheme – as they wanted to speak to someone on the phone rather than email – which “contributed to delays”.

At the start of the national free school voucher scheme, Edenred failed to put in place enough capacity to handle the number of calls from schools and families, causing “serious problems”, the report says.

Calls to Edenred’s telephone helpline increased rapidly, from 727 on April 1 to 3,940 on April 14. An outsourced contact centre was brought in to help but this was not until May 11, it adds.

But Edenred and the DfE did not become aware until May that 40,000 eCodes for conversion into vouchers had not been delivered to families.

The DfE should have done more testing of the system before it went live and it should have made sure there was sufficient call centre capacity to meet maximum expected demand, MPs have said.

The report also suggests the DfE did not do enough to assess how far families had to travel to supermarkets in the scheme.

At the start of the scheme when six supermarket chains were taking part, nearly 2,500 schools (11.2% of all schools) were more than five kilometres from their nearest participating store.

It adds insult to injury to see the damning conclusion of this report that the DfE apparently missed potential opportunities to renegotiate the contract and reduce costs, and that it seems to have been pretty complacent on this front

Labour MP Ms Hillier said: “Whether it’s getting life-saving equipment to frontline workers or food to hungry kids in poorer families, Government’s failure to learn from its repeated contracting mistakes, over and over, large and small, is costing this nation too dear.

“After the initial urgency we have seen the Government continuing to play catch-up on how to support families whose children are entitled to free school meals, and despite the contract with Edenred growing more than five-fold there was no discussion about tendering the contract or even renegotiating it.”

Last month, the Government relaunched the Edenred voucher scheme for free school meals after pictures of meagre food parcels sent to families from catering firms sparked an outcry on social media.

Geoff Barton, general secretary of the Association of School and College Leaders, said: “The launch of the Edenred national food voucher scheme at the outset of the pandemic was an absolute shambles and it put schools under huge additional pressure at what was already an incredibly difficult time.

“It adds insult to injury to see the damning conclusion of this report that the DfE apparently missed potential opportunities to renegotiate the contract and reduce costs, and that it seems to have been pretty complacent on this front.”

Edenred has handed back 1% of the contract value to the Government in rebates since the beginning of the scheme. This means the taxpayer paid less than the total value of vouchers distributed to families

A spokesman for Edenred said: “With 95% of families saying the free school meal voucher scheme has worked well for them and a contract which has ensured that every pound of public money was passed on to the children and families who needed it, with no charges to the DfE or the taxpayer, Edenred has delivered a programme which has provided vital support for families through the pandemic and value for money for the DfE.

“Edenred rejects entirely any suggestion of profiteering from the free school meal voucher scheme. Edenred has handed back 1% of the contract value to the Government in rebates since the beginning of the scheme. This means the taxpayer paid less than the total value of vouchers distributed to families.”

A DfE spokesperson said: “There is no evidence of any ‘profiteering’ through the national voucher scheme. In its investigation the National Audit Office acknowledged the rapid action this Government took to deliver free school meals for eligible pupils, the significant improvements that were made to the scheme and our oversight of it.

“We have already made further improvements to the scheme which take account of the recommendations in this report, including improving the terms of the contract to ensure the better value for money for taxpayers.

“The scheme has been tested extensively and extra support for schools and parents has been provided, resulting in an efficient system with £47 million worth of eCodes redeemed as of Wednesday – 96% of parents say they are happy and satisfied.”

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