Forty-First Report - COVID 19: the free school meals voucher scheme

The Department was surprisingly unconcerned about whether Edenred was profiting from the voucher scheme at taxpayers’ expense, and missed potential opportunities to reduce the cost or share in the profits. The Department’s policy team worked with commercial colleagues and the … Read more The Department was surprisingly unconcerned about whether Edenred was profiting from the voucher scheme at taxpayers’ expense, and missed potential opportunities to reduce the cost or share in the profits. The Department’s policy team worked with commercial colleagues and the Crown Commercial Service in managing the contract with Edenred. Despite extending the contract twice, and increasing its value from £78 million to £425 million, the Department did not seek to renegotiate any of the terms or introduce any profit-sharing element. The Department considered it achieved good value for money because it did not pay Edenred anything more than the face value of the vouchers issued to families. However, Edenred bought the vouchers from supermarkets at a discount, and the Department could have chosen to try and renegotiate how much it paid Edenred per voucher and so reduce the cost to the taxpayer. Although the contract included an open book arrangement, the Department did not use this to check on Edenred’s income and costs until after the end of the scheme. The Department now says that it is “very comfortable” with the level of profit Edenred made from the scheme, but has provided no figures or explanation of any kind to back up that judgement. Recommendation: The Department should strengthen its commercial skills, taking advice from the Crown Commercial Service, and take opportunities to renegotiate terms when it changes or extends contracts, in order to secure better value for the taxpayer. Show less

The Department did not have the information it needed to manage Edenred’s performance and understand whether the scheme was meeting the needs of 6 COVID 19: the free school meals voucher scheme families. At the start of the scheme, the … Read more The Department did not have the information it needed to manage Edenred’s performance and understand whether the scheme was meeting the needs of 6 COVID 19: the free school meals voucher scheme families. At the start of the scheme, the Department received data from Edenred only on activity, such as the volume of orders for eCodes received from schools and processed. It did not receive data on performance – for example, how long Edenred was taking to process orders, or how long schools and families were waiting to access Edenred’s website to convert eCodes into vouchers. The Department did not monitor Edenred’s performance against a requirement in the contract that Edenred should answer 90% of calls within 30 seconds. Edenred itself did not start collecting data on the number of calls answered until 11 May 2020, by which point the volume of calls from schools and families was much lower than in the first weeks of the scheme. Recommendation: The Department should collect complete management information specified in contracts from the outset, monitor performance as well as activity, and use this information to manage contracts effectively. Show less

The Department did not do enough to assess how far families had to travel to supermarkets in the scheme and whether coverage was adequate to meet needs. The Department worked with the Department for Environment, Food & Rural Affairs to … Read more The Department did not do enough to assess how far families had to travel to supermarkets in the scheme and whether coverage was adequate to meet needs. The Department worked with the Department for Environment, Food & Rural Affairs to check there was at least one participating retailer in each local authority area. However, given the size of many local authorities, this offered limited assurance about coverage in practice for many families, particularly in rural areas. The Department did not analyse how far parents would need to travel to stores, or how long it would take. At the start of the scheme when six supermarket chains were taking part, almost 2,500 schools (11.2% of all schools) were more than five kilometres from their nearest participating store. This would have meant a long journey for families, and been especially difficult and costly for those reliant on public transport and given the movement restrictions during the early months of the pandemic. Recommendation: In implementing future policies, the Department should ensure it robustly evaluates geographic coverage and likely travelling time for people to access services. Show less

Limitations in the data shared between the Department and the Department for Work & Pensions meant that support for vulnerable families with children eligible for free school meals could not be routed through the benefits system. In March 2020, the … Read more Limitations in the data shared between the Department and the Department for Work & Pensions meant that support for vulnerable families with children eligible for free school meals could not be routed through the benefits system. In March 2020, the Department’s preferred option for support was an uplift to benefits for families with children eligible for free school meals. However, not all families in receipt of Universal Credit are eligible for free school meals and the Department does not share data with the Department for Work & Pensions that would allow benefit payments to be targeted in this way. The Department therefore concluded that it would not be possible, in the time available, to implement a support scheme through the benefits system by distinguishing families eligible for free school meals from other benefit recipients. Recommendation: The Department should work with the Department for Work & Pensions to explore how data sharing could be improved to allow government to support families with children eligible for free school meals more flexibly and responsively. COVID 19: the free school meals voucher scheme 7 1 Setting up the voucher scheme Show less

On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Education (the Department) and Edenred (UK Group) Ltd (Edenred) about the free school meals voucher scheme, which ran from 1 April … Read more On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Education (the Department) and Edenred (UK Group) Ltd (Edenred) about the free school meals voucher scheme, which ran from 1 April 2020 to the end of the school summer holiday.1 Show less

The Department awarded a contract to administer the voucher scheme to a private contractor, Edenred.7 We asked the Department why it had gone down this route, and what alternative options it had considered to support pupils eligible for free school … Read more The Department awarded a contract to administer the voucher scheme to a private contractor, Edenred.7 We asked the Department why it had gone down this route, and what alternative options it had considered to support pupils eligible for free school meals who were not attending school. The Department told us that it had looked at four main options. Its initial preferred option was a cash transfer to parents through the benefits system. The Department explained, however, that this approach would not have been quick enough for what it was trying to achieve. It would have taken at least six weeks to put in place the mechanisms for payments through the benefits system, and would have required 1 C&AG’s Report, Investigation into the free school meals voucher scheme, Session 2019–20, HC 1036, 2 December 2020 2 C&AG’s Report, para 1.1 3 Q 128; C&AG’s Report, paras 1.2, 1.3 4 C&AG’s Report, paras 2, 2.1 5 Qq 44–45 6 Supplementary written evidence from the Department for Education 7 C&AG’s Report, para 3 8 COVID 19: the free school meals voucher scheme legislation. This was because the Department does not share with the Department for Work & Pensions data identifying which families in receipt of Universal Credit also have children eligible for free school meals.8 Show less

The other options the Department had considered, but ruled out, were: to make cash transfers to the Ministry of Housing, Communities & Local Government or directly to local authorities to fund local arrangements for supporting vulnerable families; and to provide … Read more The other options the Department had considered, but ruled out, were: to make cash transfers to the Ministry of Housing, Communities & Local Government or directly to local authorities to fund local arrangements for supporting vulnerable families; and to provide cash for schools to distribute directly to families of eligible pupils.9 The Department told us that it had been reluctant to make schools responsible for handling cash, and that there was no alternative scheme, such as a prepaid debit card, available that it could stand up in the time available.10 Show less

The Department noted that an advantage of a voucher scheme was that it made it more likely that the money would be spent on food, which was the aim.11 We asked why the Department, having settled on a voucher scheme, … Read more The Department noted that an advantage of a voucher scheme was that it made it more likely that the money would be spent on food, which was the aim.11 We asked why the Department, having settled on a voucher scheme, had chosen Edenred to run it. The Department explained that there were a number of alternative voucher providers it could have chosen and that its commercial and legal advice confirmed that, in light of the exceptional circumstances, it could make a direct contract award. It asked the Crown Commercial Service whether it had any suppliers on a framework that had already been through a competitive process with due diligence checks and that could provide a voucher service. Edenred was the only company that met this requirement.12 Show less

Schools had a choice whether to use the national voucher scheme or to make local arrangements.13 The Department emphasised that all the options it had considered would have run alongside any arrangements that schools had made for themselves. It explained … Read more Schools had a choice whether to use the national voucher scheme or to make local arrangements.13 The Department emphasised that all the options it had considered would have run alongside any arrangements that schools had made for themselves. It explained that, during the summer term, typically around 10% of schools continued to use their own catering supplier, and around 12% of schools used arrangements with a different catering supplier, to provide food parcels to eligible children at home. Some of these schools may have also used the voucher scheme at times.14 Show less

In written evidence, the National Association of Head Teachers told us that many school leaders took immediate action to support pupils eligible for free school meals following the school closures. The responses included creating local schemes, using their existing catering … Read more In written evidence, the National Association of Head Teachers told us that many school leaders took immediate action to support pupils eligible for free school meals following the school closures. The responses included creating local schemes, using their existing catering contracts, and purchasing supermarket vouchers from their own reserves. The National Association of Head Teachers also said that a large number of schools felt they had no alternative other than to use the national voucher scheme, or risk not being fully reimbursed for the additional costs involved in making local arrangements.15 We also received written evidence from Elsley Primary School that there was a huge incentive for schools to use the national scheme rather than a local alternative, as the Department had placed limitations on the maximum amount of money that schools could claim for operating local schemes.16 8 Qq 38–40 9 Qq 38 10 Qq 42–43 11 Q 39 12 Q 47 13 C&AG’s Report, para 3 14 Q 38; Supplementary written evidence from the Department for Education 15 National Association of Head Teachers submission, paras 6, 21 16 Elsley Primary School submission, para 15 COVID 19: the free school meals voucher scheme 9 Supermarket coverage Show less

Schools taking part in the scheme ordered electronic codes (eCodes) online that could be converted into shopping vouchers for families to use at nominated supermarkets.17 The Department told us that a reason for selecting Edenred to run the scheme was … Read more Schools taking part in the scheme ordered electronic codes (eCodes) online that could be converted into shopping vouchers for families to use at nominated supermarkets.17 The Department told us that a reason for selecting Edenred to run the scheme was that Edenred already had established relationships with some supermarket chains, and it had wanted to pick an existing scheme that could start as quickly as possible. The number of supermarket chains participating in the scheme rose from six at the start to 10 by 29 June 2020. The Department told us that the six supermarket chains involved at the start accounted for a good share of the United Kingdom supermarket market and had good geographical coverage.18 However, we note that almost 2,500 schools (11.2% of all schools) were more than five kilometres from their nearest participating store at the start of the scheme. There was a limited choice for a further 6.0% of schools, that had only one participating supermarket store within five kilometres.19 Show less

The Department told us that the vast majority of families had easy access to participating retailers but acknowledged that, at the outset of the scheme, there were some families further from stores than it wanted. It said that it sought … Read more The Department told us that the vast majority of families had easy access to participating retailers but acknowledged that, at the outset of the scheme, there were some families further from stores than it wanted. It said that it sought to have as many people as close as possible to branches of participating supermarkets. It carried out analysis with the Department for Environment, Food & Rural Affairs to make sure there was at least one participating retailer in each local authority area. However, it acknowledged that local authorities varied hugely in size.20 The Department did not analyse the distances parents would have needed to travel to stores or how long it would have taken using available means of transport.21 It told us that it sought, with Edenred, to add more supermarket chains during the course of the scheme, and to make sure schools had other choices if the nearest participating store was a long way away.22 Show less

The Catholic Education Service wrote to tell us that families in remote, isolated communities struggled to find an appropriate shop from which to purchase food, due to the limited number of supermarket chains taking part in the scheme.23 In its … Read more The Catholic Education Service wrote to tell us that families in remote, isolated communities struggled to find an appropriate shop from which to purchase food, due to the limited number of supermarket chains taking part in the scheme.23 In its written evidence, the National Association of Head Teachers said that parents had difficulty using participating supermarkets that were most suited to their needs, saying that some had to use public transport to reach supermarkets and that this did not offer the best value for money.24 We also received written evidence from Truro and Penrith Academy Trust, saying that in their rural part of Cornwall there were no nearby supermarkets, that many families did not have their own transport, and that there was a very limited bus service. The vouchers could only be used in large supermarket chains and not in the local, accessible shops in that part of the country.25 Show less

Edenred told us that setting up the voucher scheme in two weeks meant that it had to start with those supermarket chains with which it had an existing relationship. It then held discussions with other chains aiming, by increasing the … Read more Edenred told us that setting up the voucher scheme in two weeks meant that it had to start with those supermarket chains with which it had an existing relationship. It then held discussions with other chains aiming, by increasing the number of participating 17 C&AG’s Report, para 3 18 Q 120; C&AG’s Report, para 13 19 C&AG’s Report, para 3.29 20 Qq 120–122 21 C&AG’s Report, para 3.29 22 Qq 120–121 23 Catholic Education Service, para 6 24 National Association of Head Teachers, para 28 25 Truro and Penrith Academy Trust, para 5 10 COVID 19: the free school meals voucher scheme supermarkets, to reduce travelling time and increase choice for families. It told us that, at the end, the scheme covered 82% of the United Kingdom grocery market. Edenred acknowledged that coverage was not 100%, so could have been better, but observed that this was a good achievement in the time available. It explained that it had had two key requirements for bringing further supermarket chains into the scheme. The first was that supermarket chains had to be able to accept vouchers in every branch, to ensure a consistent experience. The second was that the vouchers had to be distributed digitally, so they could be processed quickly, simply and securely.26 The Department acknowledged, however, that it could have set out more clearly and transparently the steps required for supermarkets to join the scheme.27 26 Q 50 27 Q 37 COVID 19: the free school meals voucher scheme 11 2 Operation of the voucher scheme and costs to the taxpayer Understanding how schools and parents would use the scheme Show less

Over 11,000 school administrators registered immediately after the voucher scheme opened. By August 2020, 20,717 schools had registered for the scheme (94% of state schools in England).28

The Department acknowledged that there was a period early in the scheme when parents and schools experienced quite a lot of difficulty and disruption in getting access to the vouchers. It said that it had underestimated the extent to which … Read more The Department acknowledged that there was a period early in the scheme when parents and schools experienced quite a lot of difficulty and disruption in getting access to the vouchers. It said that it had underestimated the extent to which parents and schools would want to talk to a human being about how to use the scheme. Many more people had wanted to telephone than it had expected. The Department said that it could have pushed Edenred to provide more contact centre support earlier, but the assumption had been that schools and parents would make first contact by email.29 Show less

The number of calls each day to Edenred’s telephone helpline increased rapidly, from 727 on 1 April 2020 to 3,940 on 14 April 2020. In the early weeks of the scheme, in April 2020, Edenred called on staff from other … Read more The number of calls each day to Edenred’s telephone helpline increased rapidly, from 727 on 1 April 2020 to 3,940 on 14 April 2020. In the early weeks of the scheme, in April 2020, Edenred called on staff from other parts of its business to help handle the volume of calls it was receiving, and it did not bring in an outsourced contact centre until 11 May 2020.30 Edenred told us that, if it were to go back to the start of the scheme, it would have put more resources into handling incoming calls and enquiries.31 Show less

In terms of things it could have done better, the Department said that, if it were to do the same thing again, it would try to find a way to do more user testing before the scheme started. The Department … Read more In terms of things it could have done better, the Department said that, if it were to do the same thing again, it would try to find a way to do more user testing before the scheme started. The Department said that a lack of user-testing before the scheme was launched accounted for much of what led to the delays and difficulties that schools and parents experienced. It explained that it had been unable to complete as much testing as would normally have been done, ahead of the scheme opening. It told us that it would have carried out months of proper testing in normal times, but had only 18 days to get the scheme up and running. The Department said that it had considered what it could have done differently, even in the short time available, and felt that it could have carried out some sort of “guerrilla user testing” earlier, such as getting all departmental staff to try using the system for two hours to see how well it worked.32 Show less

The Department recognised that the instructions for schools were not clear enough at the start of the scheme, and it also attributed this to its lack of user-testing.33 Edenred told us that it had not been able to engage with … Read more The Department recognised that the instructions for schools were not clear enough at the start of the scheme, and it also attributed this to its lack of user-testing.33 Edenred told us that it had not been able to engage with schools before the scheme was launched. It felt this would have been an opportunity to explain to schools how to register for the scheme and how to place orders.34 The Department said that, because the guidance was 28 C&AG’s Report, paras 3.3–3.4 29 Q 37 30 C&AG’s Report, paras 3.7, 3.15 31 Q 135 32 Q 37 33 Q 95 34 Q 135 12 COVID 19: the free school meals voucher scheme not clear enough, many schools submitted a large number of individual orders, rather than uploading a single spreadsheet with a bulk order for their pupils, which took up much more system capacity.35 Show less

Edenred told us that it discovered, after implementing an improvement to its platform at the beginning of May 2020, that 40,000 eCodes it had emailed to parents had not been delivered because of incorrect email addresses. It said that it … Read more Edenred told us that it discovered, after implementing an improvement to its platform at the beginning of May 2020, that 40,000 eCodes it had emailed to parents had not been delivered because of incorrect email addresses. It said that it had built a new process to alert schools to the problem and help them identify incorrect email addresses.36 In written evidence, the Department told us that Edenred issued weekly communications to school administrators who had attempted to send an eCode to an incorrect parent address resulting in a ‘bounced’ email. This communication contained details of how the schools should resolve the issue to ensure that families received their vouchers.37 Show less

The Department accepted that there were many things about the scheme that could have been better. Both the Department and Edenred apologised to schools and parents who experienced difficulty and disruption. Edenred said that it was very sorry to families … Read more The Department accepted that there were many things about the scheme that could have been better. Both the Department and Edenred apologised to schools and parents who experienced difficulty and disruption. Edenred said that it was very sorry to families and schools who had a bad experience at the beginning of the scheme.38 Monitoring scheme performance Show less

The Department told us that, at the start of the scheme, it started collecting management information from Edenred twice daily. Initially it collected data only on the number of orders from schools and the number of vouchers ordered by parents.39

The Department did not systematically collect data on Edenred’s processing times, or how long it took people to access Edenred’s website to order eCodes or convert them into vouchers.40 It also did not monitor performance against the service-level indicator in … Read more The Department did not systematically collect data on Edenred’s processing times, or how long it took people to access Edenred’s website to order eCodes or convert them into vouchers.40 It also did not monitor performance against the service-level indicator in Edenred’s framework contract that it should answer 90% of telephone calls within 30 seconds. Calls to Edenred’s helpline peaked during the early weeks of the scheme in April 2020.41 The Department told us that it discussed performance in its meetings with Edenred, but that it did not ask Edenred for regular reports on how quickly it answered calls.42 Edenred and the Department started collecting data on the number of calls answered from 11 May 2020 when Edenred brought in the outsourced contact centre.43 Show less

In April 2020, schools had to wait over 42 minutes on average to access Edenred’s website.44 In written evidence, Truro and Penrith Academy Trust told us that its school business manager had to try uploading the school’s orders to Edenred’s … Read more In April 2020, schools had to wait over 42 minutes on average to access Edenred’s website.44 In written evidence, Truro and Penrith Academy Trust told us that its school business manager had to try uploading the school’s orders to Edenred’s website in the middle of the night, for several nights in a row, and that website traffic was better in the 35 Q 95 36 Q 90 37 Supplementary written evidence from the Department for Education 38 Qq 37, 136 39 Qq 82, 84 40 C&AG’s Report, paras 3.11, 3.19 41 C&AG’s Report, para 3.18, Figure 5 42 Q 87 43 C&AG’s Report, paras 3.15, 3.18 44 C&AG’s Report, para 3.19 COVID 19: the free school meals voucher scheme 13 early hours of the morning.45 The Association of School and College Leaders told us that performance improved over the duration of the voucher scheme and that, at the end of the period, the scheme was working for schools.46 Costs to the taxpayer Show less

The Department told us that it spent £384 million on the voucher scheme, in addition to the £1.2 billion funding for free school meals in schools every year.47 The Department signed an initial contract with Edenred on 28 March 2020, … Read more The Department told us that it spent £384 million on the voucher scheme, in addition to the £1.2 billion funding for free school meals in schools every year.47 The Department signed an initial contract with Edenred on 28 March 2020, which ran to 26 April 2020 and had a value of £78 million. The Department subsequently extended the contract: firstly to 24 June 2020, with a new total value of £234 million, and secondly to 31 August 2020, with a new total value of £425 million.48 Show less

The Department told us that it was used to managing contracts, and that its policy team worked with commercial colleagues and the Crown Commercial Service in managing the contract with Edenred.49 In written evidence, the Department confirmed that it was … Read more The Department told us that it was used to managing contracts, and that its policy team worked with commercial colleagues and the Crown Commercial Service in managing the contract with Edenred.49 In written evidence, the Department confirmed that it was not advised to seek to negotiate the contract terms at any point during the scheme.50 The Department said that its focus had been on trying to get the scheme running as well as possible. It did, nonetheless, accept that it could have looked at renegotiating terms before agreeing contract extensions.51 Show less

The Department paid Edenred the face value of eCodes issued to families, less any cancelled or expired codes, meaning that the final cost to the Department was the value of vouchers that families received.52 Under the terms of its framework … Read more The Department paid Edenred the face value of eCodes issued to families, less any cancelled or expired codes, meaning that the final cost to the Department was the value of vouchers that families received.52 Under the terms of its framework contract, Edenred paid the Crown Commercial Service a management charge of 1% of the value of vouchers issued.53 The Department argued that it was difficult to see how it could have achieved equivalent value through any other alternative arrangement.54 Show less

Edenred generated revenue from the scheme by buying vouchers from supermarket chains at a discount on their face value.55 It explained that it had individual arrangements with each supermarket participating in the scheme, but declined to share any details of … Read more Edenred generated revenue from the scheme by buying vouchers from supermarket chains at a discount on their face value.55 It explained that it had individual arrangements with each supermarket participating in the scheme, but declined to share any details of its commercial arrangements on the grounds that the information was confidential.56 Show less

The contract included an open book arrangement giving the Department access to information about Edenred’s income and costs relating to the scheme. However, the Department did not make use of this arrangement during the course of the scheme.57 The Department … Read more The contract included an open book arrangement giving the Department access to information about Edenred’s income and costs relating to the scheme. However, the Department did not make use of this arrangement during the course of the scheme.57 The Department told us that Edenred had subsequently shared with it some information about costs and profitability. The Permanent Secretary said that she was “very comfortable” with the level of profitability in the contract, but that the Department could not disclose 45 Q 136 46 Association of School and College Leaders, para 17 47 Q 132 48 C&AG’s Report, Figure 3 49 Qq 98, 100–101 50 Supplementary written evidence from the Department for Education 51 Qq 57, 61–62 52 C&AG’s Report, para 4.2 53 Supplementary written evidence from the Department for Education; C&AG’s Report, para 4.5 54 Q 108 55 C&AG’s Report, para 16 56 Qq 52, 55 57 C&AG’s Report, para 16 14 COVID 19: the free school meals voucher scheme this information as there were commercial confidentiality concerns.58 In supplementary written evidence after the oral evidence session, she restated that the Department had now been sighted on the level of profit made by Edenred, and considered it to be “reasonable”, but did not provide figures or explanation to support that judgement.59 58 Qq 105, 109 59 Supplementary written evidence from the Department for Education COVID 19: the free school meals voucher scheme 15 Show less