Home   News   Article

Hertfordshire’s school meals service made £1.27m loss in a year

A company set up by Hertfordshire County Council to provide school meals made losses of more than £1.25 million in a year.

Hertfordshire Catering Ltd (HCL) was set up by the authority in 2013 to supply “healthy and nutritious” meals to hundreds of schools.

Any profits generated by it are invested in other council services, but according to the latest published accounts the company made a loss of £1,272,883 in 2022-23.

According to the figures filed with Companies House, the “extraordinary” cost and trading challenges that year represented “the biggest pressure on HCL’s operational finances since the company was established in 2013”.

A strategic report attached to the published accounts highlights factors that impacted the company in 2022-23, including the war in Ukraine, inflation and Brexit. The conflict in Ukraine pushed UK inflation to a 41-year high – with “specific spikes in food costs, fuel and energy prices”.

There were, it says, “huge spikes and volatility” in key areas such as the cost of eggs, cheese and pasta as well as increases relating to cleaning materials and repairs.

Stock image
Stock image

Plus Government funding for universal infant free school meals increased by “only” 2.9% in September 2022 – “falling short of the inflationary pressure on all areas of cost”.

The report points to the impact of increases in the National Living Wage – which “have driven up labour costs” – and the pressure to recruit and retain staff.

Brexit, successive lockdowns during the Covid pandemic and changing working patterns, it says, have “eroded the UK’s hospitality workforce, creating additional pressure on recruitment and retention of staff”.

Also highlighted is the impact of “unplanned” closure days for the Queen’s Platinum Jubilee and the state funeral of Queen Elizabeth II, as well as disruption because of bad weather and strike action.

According to the report, the company sought to absorb cost increases and to “redesign services” to minimise price increases for customers. But it says that “due to the unprecedented nature of inflationary pressures, it was necessary to increase charges to customers to maintain levels of service and quality”.

Commenting on the accounts, a spokesperson for education authority Hertfordshire County Council said: “Like many businesses, HCL has experienced significant cost and trading challenges over the last few years, with factors including inflation, the impact of the conflict in Ukraine on food prices and below-inflation increases in Government funding for school meals combining to put enormous pressure on the company’s finances.

“We continue to support HCL as it moves to a sustainable financial position while continuing to provide healthy and nutritious meals.”

The spokesperson said HCL’s accounts for 2023-24, which finished earlier in April, were expected to show a “much-improved position”.

This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies - Learn More