8. The impact of delegation on central services
8.7 However, delegation had also led to more difficult situations for some DSOs. In the
main, the schools which had either left the central service or had negotiated more
favourable terms with the DSO were those which were the most profitable. One
Finance Officer described a situation, echoed in other LEAs, of the DSO losing the
benefits of economies of scale which existed pre-delegation.
.....what [secondary schools] are finding, the ones who have gone to outside caterers is that
they are saying they are making a profit. The counter to that is that the DSO is struggling to
providefor the same price in the primary sector because it’s lost the economies ofscale.
8.8 DSOs facing this situation expressed concern that they would not be able to sustain
their services in less profitable schools. Without the cross subsidy, the marginal costs of
staffing could make the cost of providing a meal prohibitive in smaller schools. Several
suggested that they would not be able to sustain the service without some form of
subsidy.
8.9 DSO officers raised the additional disadvantage that with the loss of more profitable
schools or with the tightening of contracts, they no longer had scope to upgrade the
service or to undertake more innovative projects. One DSO had in the past introduced
swipe cards in all schools with cash cafeterias and electronic survey equipment for
conducting pupil surveys, all funded from paid meals revenue. Officers believed that
with tighter budgets, they would have less freedom to test new ideas which required
capital funding.
8.10 There was a strong feeling expressed by several DSO officers that long-term planning
of the catering provision in individual schools had become more problematic with
delegation, particularly in those cases where annual contracts had become the norm.
In every way delegation has reduced my ability to move the serviceforward. It's very
frustrating, very worrying. You feel in a no-win situation - every new idea I come up with,
there's something that works against it, because of delegated budgets. [And] ..ifuptake
increases in schools, I don't benefit, schools get the benefit.
8.11 Kitchen repairs and maintenance have already been discussed in Section 4. The
implications for DSOs in some LEAs had been that they no longer had access to funds
for repairs and maintenance and for investment in new equipment. One catering officer
described situations such as kitchens with extractor fans needing cleaning, and cooking
equipment that was broken. In these circumstances, the onus was on her to find
suitable alternatives.
The capital equipment budget is delegated per capita; small schools do not have enough money
to spend on capital, so some ofthem don't do it any longer.
In order to manage the situation better, she had tried to persuade head teachers to let
her manage their meals budgets, but schools making a profit were not agreeable to this.
She had also tried to introduce profit sharing, without success. She commented,
As long as delegation is in place, I don't think that schools that are making money will ever
give it up, and small schools will continue to struggle.
8.12 One new role which several DSOs had taken was to offer ‘safety net’ provision to
schools which had experienced problems with a private contractor. Some schools had
47