National Audit Office: Investigation into the free school meals voucher scheme

Today the National Audit Office (NAO) reports that after some schools and families experienced problems with the free school meals voucher scheme, steps taken by the Department for Education (DfE) and its contractor Edenred led to improvements over the life of the scheme.

At January 2020, 1.44 million children in England were eligible¹ for free school meals. Following the closure of schools to most pupils in March 2020 in response to the COVID-19 pandemic, DfE announced a national free school meals voucher scheme as a temporary substitute for children receiving meals in school. The vouchers were worth £15 per week for each eligible child.

The government approved the scheme on 13 March and DfE launched it 18 days later on 31 March. In order to get the scheme running quickly, DfE looked first to existing government suppliers to help deliver the scheme and appointed Edenred. Edenred was the sole supplier to government departments and public bodies under a Crown Commercial Service framework² covering employee benefit and recognition schemes, including vouchers, via an online platform.

In the first few weeks after the launch, schools reported that it was difficult and time-consuming to register for the scheme and they faced problems logging onto Edenred's website, with staff having to do this late at night to avoid long waiting times. The number of calls to Edenred's helpline grew rapidly, peaking at 3,940 on 14 April. The number of emails Edenred received from school and parents also grew sharply, peaking at 8,878 on 29 April. Schools and parents said they could not get prompt support from Edenred, either by telephone or email.

DfE and Edenred took action to improve the scheme's capacity and performance. At the height of the problems, DfE officials held daily calls with Edenred to monitor progress and ministers also intervened directly. In April, Edenred took steps to upgrade its IT systems, improve communications with schools and families, and help supermarkets manage demand for vouchers.

The scheme's performance improved. The time it took Edenred to process orders dropped from an average of nearly five days in April 2020 to within hours in July 2020. Average waiting times for schools and parents to access Edenred's website fell from over 42 minutes for schools and over 12 minutes for parents in late April, to virtually no wait at all by July 2020.

DfE aimed for as much of the country as possible to be covered by stores accepting the vouchers, but recognised there would be limitations, especially in rural areas. Analysis by the NAO shows that at the start of the scheme, 11.2% of schools were more than five kilometres from the nearest participating store and choice was limited for a further 6.0% of schools where there was only one participating supermarket within five kilometres. It is possible that coverage may have improved as more supermarket chains joined the scheme. The number of supermarket chains participating in the scheme rose from six at the start, to 10 by 29 June 2020. Where eligible families could not access any of the supermarkets involved in the scheme, DfE encouraged schools to consider other options.

DfE does not know precisely how many children have been supported by the voucher scheme. It did not require schools to provide pupil details in order to avoid Edenred having to handle a large volume of sensitive personal information. Edenred issued 10.1 million vouchers in total, which varied in value because they could cover more than one child in the same family or more than one week. At 5 October, DfE forecast that the final cost of scheme would be no more than £384 million - 81% of the potential maximum cost of £473 million that DfE estimated at the start of the scheme.

DfE does not know whether Edenred has made a profit from running the scheme. Edenred's contract includes provision for DfE to access information about Edenred's income and costs relating to the scheme but, at the time of the NAO's work, DfE had not made use of this arrangement. DfE paid Edenred the face value of vouchers issued to families. It did not pay Edenred a management fee or any costs for administering the scheme, and there were no financial incentives or penalties linked to performance. Edenred generated revenue from the scheme by buying vouchers from supermarket chains at a discount on their face value.

Gareth Davies, head of the NAO, said:

"DfE got the voucher scheme up and running quickly to support vulnerable children who would no longer be receiving free meals at school.

"Problems at the start of the scheme led to a frustrating experience for many schools and families, but DfE and Edenred worked hard to get on top of these issues. Performance steadily improved as the scheme progressed."

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Notes for Editors

1. Pupils may be eligible for free school meals if their parent or carer is in receipt of specified income-related benefits, including Universal Credit.
2. The Crown Commercial Service is the government's specialist public procurement organisation. It publishes commercial agreements (frameworks) for a wide variety of goods and services. A framework comprises a description of common public sector requirements, a list of suppliers who have been evaluated as capable of delivering the requirements, and standardised contract terms. Edenred (UK Group) Ltd was the only provider on this Crown Commercial Service framework, which it had won first in November 2015 and again in August 2019, in each case following a competitive tendering exercise.