Market under the microsope

01/11/2011 - 00:00
The Association for Public Service Excellence has issued its latest state of the market survey of local authority catering. APSE principal advisor for catering Rob Bailey reviews the findings

With all the changes and challenges facing local authority caterers, it’s useful to take stock of where the service is at and where it’s going. And our market survey sets out to do just that.

Our on-line poll received responses from 156 catering managers in councils across the UK, who were asked about issues facing them and expectations for the future.

Having posed similar questions in previous surveys, we were able to identify trends in matters including:  structure; workforce; funding and efficiencies; demand and pricing; healthy eating; and service delivery.

On the subject of Structure, school catering remains the largest service area for our respondents, with 90% of caterers delivering this and 39% delivering staff catering and welfare meals.

In terms of structure, 24% of respondents regarded themselves as being part of a facilities management structure and a further 29% anticipated becoming so over the next two years, while the rest saw themselves remaining as a defined unit. This shows little change since our 2008 survey.

A total of 18% of caterers were operating at least some of the service through a wholly owned local authority company and almost 26% within a central ‘soft’ facilities management service. The majority deliver catering as a defined business unit and in 42% of cases school, civic and welfare catering are similarly run as separate services.

Under the title of Workforce, a total of 84% of responding authorities have now completed job evaluation, although only 81% of those have implemented the new grading system.

Catering managers reported that increases in base labour costs as the results of job evaluation and single status have been around 6% over the past three years, which has not been as detrimental a pressure on overall costs as originally feared.

Just over 50% said wage costs had risen a great deal, compared with 92% who anticipated this would rise substantially back in 2008. The average hourly wage for a catering assistant is now £6.83, but this ranges from £5.70 to £9.23.

Life is getting harder for catering managers in local government, the survey revealed, with 88% anticipating an increase in their workload over the next 12 months.

Staff absence has been on a gradual decline within catering and APSE data shows an average rate of 4.88%. On other workforce issues, 95% of councils hold regular staff training, 77% hold regular appraisals and 62% have Investors in People status.

On Funding and Efficiency, catering managers have proved resilient in the face of changes that have taken place in local government over the last three years. Further change is anticipated however.

Our survey took place at a time when budgets across local government are subject to unprecedented reductions, requiring caterers to find even greater efficiencies within their service. A total of 59% of respondents expected a decrease in budget over the next year and 11% expected cuts to be substantial.

Anticipating the drive for value for money, the most popular methods stated for achieving greater efficiency were cited as: reduced hours; reductions in management; reductions is catering staff; reduction of food on plate cost; and renegotiation of meal charging methodology.

On Demand and Pricing it was stated that this area for meals is clearly a key issue for local authority caterers.  Survey respondents believe the increase in academies will see fewer schools using the local authority to provide school meals.

Civic catering is also expected to decline as a direct result of the general squeeze on council budgets. However, in-house caterers also say they expect secondary school meal numbers to rise, which reflects a more optimistic attitude in their ability of to innovate and market their offering.

Expectation for future school meal uptake has been volatile – although caterers have remained optimistic throughout. A total of 49% of respondents now expect some increase over the next year, with 24% expecting a decrease. Free school meals are also expected to rise due to the current state of the economy.

The sale price for school meals currently ranges from £1.50 to £2.20. The overall average is £1.84. APSE performance networks data for the financial year 2009-10 period showed a price range from £1.20 to £1.98 for primary school meals with an average of £1.70. It therefore appears that prices are increasing significantly as budget gaps appear.

In 2008, free school meals for all was being piloted in some authorities and 74% of caterers were supportive of such a move being rolled out nationally.  Support remains high with 66% still favouring a move to free school meals for all.

In regard to Healthy Eating, respondents were asked their views. A clear majority (65%) agreed that TV chef Jamie Oliver had been a good influence on school meals in highlighting healthy eating.

Concerns that the healthy eating agenda has ‘gone too far’ have subsided since the 2008; with 58% now believing this as opposed to 70% back then. In the survey three years ago, vast number of respondents called for a period of stability to allow caterers to get to grips with changes to nutritional standards.

In 2008 a substantial number of caterers were also worried about the impact of the new nutritional standards on take up, especially at secondary level. While their fears were not unjustified, the effect of nutritional standards has now dropped from caterers immediate concerns in regard to take-up.

On the subject of Service Delivery, the majority of respondents only supply catering within their local authority, but 12% now supply services to the private sector and 26% to other public sector bodies. There is a renewed interest on ‘shared working’ with neighbouring authorities although this has yet to translate into any meaningful reality.

The majority of respondents were in-house service providers and expected to remain within local authority control for the forthcoming year. Some respondents anticipated the economic crisis may also see the return of some contracts back in-house as private providers struggle to retain profitability.

APSE represents front-line providers delivering a range of services, including catering, in councils across the UK and we are seeing a return of services in-house as cuts and the drive for efficiency bites. We believe this is due to the ability of directly delivered services to respond flexibly and efficiently to changes and challenges local government is facing.

The data collected through our latest survey provides a useful snapshot of the state of the market for local authority caterers. Detailed data is available for authorities who take part in the APSE performance networks benchmarking system, which covers education, civic and welfare catering.

For further information contact: rbailey@apse.org.uk

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