School caterers have warned that the government’s new healthy eating proposals could make their services financially unviable, as rising costs, low profit margins and the risk of pupils abandoning school canteens for high-street junk food threaten to push an already struggling sector over the edge.
Brad Pearce, chair of the trade body The School Food People, said the changes would drive up costs and push secondary school students to buy food outside school. “That has a devastating effect on the viability of our services in terms of revenue, and payment for staff and food and ingredients – whether that’s a school that runs its own service or a large catering provider,” he said. Tracey Smith, chief executive of Sodexo’s school and university business, added that caterers already faced a difficult balancing act between nutrition and what children find appealing. “What we don’t want is children to start bringing in packed lunches that aren’t balanced because they think that they do not like the school food or that they cannot afford it,” she said.
Financial pressure on school caterers
The sector operates on wafer-thin margins. Compass Group, one of the biggest providers, has a net profit margin of just 4%. Sodexo’s margin is 2.8%, and Bidfood’s was around 3% in its 2025 financial year, according to Companies House accounts. Members of The School Food People have reported 50-70% inflation in food prices in their supply chain over the past three years, Pearce said. National food price inflation stood at 4.9% in the year to July 2025, with prices 37% higher than five years ago, and is projected to average 4.4% across 2026.
Labour costs are adding further strain. The rise in the UK living wage and the London living wage is “huge”, Pearce said, and the National Living Wage rose to £11.44 per hour in 2024. The war in Iran is expected to push up food prices further, he warned. “Plus you have the war in the Middle East and increases in fuel costs; it is adding pressure on what is already a very difficult situation.”
The government spends £1.5 billion each year on free school meals for around 3.4 million children. That figure is expected to rise from September 2026, when all households in receipt of Universal Credit become entitled to free meals, extending access to more than 500,000 children. However, schools will not receive additional Pupil Premium funding for these new recipients, as Pupil Premium is based on the previous, lower free school meals threshold. Campaigners argue that the funding per meal – currently £2.61 for universal infant free school meals – is insufficient. Caterers estimate the real cost of a school meal to be between £3.15 and £3.40, and a report by Northumbria University suggests a potential annual shortfall of £310 million for schools in England, which could force them to draw on core teaching budgets. The average cost of a school lunch in England was £3.16 last year, though caterers say prices are driven primarily by government funding levels.
Gavin Squires, a business development controller at the wholesaler Bidfood, which supplies school caterers nationwide, said stricter demands would create further strain. “Changes to menus and product specifications, alongside reduced menu flexibility in certain areas, could have implications for sourcing, availability and stock management, at a time when supply chains are already stretched.” A pilot scheme by The Pantry, which tested stricter standards, saw meal uptake fall by 15% and per-pupil costs rise by 21p a day.
Government proposals and health rationale
The Department for Education (DfE) launched a consultation earlier this month on the first major update to school food standards in 13 years. The proposals, which are open for responses until 12 June 2026, aim to boost children’s fibre intake, reduce sugar and restrict foods high in fat, salt and sugar. Key changes expected to come into effect from September 2027 include making it mandatory for all school puddings to contain at least 50% fruit, banning deep-fried items such as battered fish and chicken nuggets, and limiting “grab-and-go” items such as pizzas and sausage rolls. Lentils, pulses and beans will be incorporated into more meals as a healthier, nutritious replacement for meat – although suppliers point out that most lentils are imported into the UK, which could drive up costs.
The drive for healthier school meals comes amid rising concern over children’s health. NHS data for 2024 shows that 26% of children aged 2 to 15 were overweight or living with obesity, and 15% were living with obesity. In the 2023/24 school year, 9.6% of reception-aged children (aged 4-5) were classified as obese, rising to 22.1% of Year 6 pupils (aged 10-11). Obesity prevalence is more than double in the most deprived areas compared with the least deprived, and the NHS spends around £6.5 billion annually on treating obesity-related ill health.
The proposed standards also include a daily hot meal requirement for primary schools, free drinking water throughout the day, and a ban on sugar-sweetened beverages and fruit juice (phased in). The DfE says it wants to make healthier choices the default, rather than relying solely on education, and to create inclusive menus that cater for different cultures, allergies and diets.
Historical context and unintended consequences
This is the first overhaul since 2015, when the government-commissioned School Food Plan, written by Henry Dimbleby and John Vincent (co-founders of Leon), introduced a food-based approach. The revamp comes two decades after parents in Rotherham, South Yorkshire, made national headlines by passing food through school railings in what was portrayed as a protest against Jamie Oliver’s healthy-eating campaign. Oliver’s “Feed Me Better” campaign led to significant investment, but research suggested the poorest pupils benefited less than those from middle-class homes, and Oliver himself later acknowledged that healthy eating had been seen as a “posh and middle-class” concern. The rise of academy status has also fragmented the system, as academies are not always bound by the same regulations as local authority schools.
Tracey Smith warned that if healthy options become too expensive or unappealing, children may opt for less balanced packed lunches. “If you are looking at a really high-quality vegetarian dish, that could be the same price as a meat dish,” she said. Stephanie Slater, chief executive of the charity School Food Matters, said healthier standards did not automatically mean higher costs. “There is a real squeeze at the moment with food inflation and labour costs,” she said. “But it is a broader issue that it is less about food standards and more about the fact that the system needs more funding.”
Department for Education response
A DfE spokesperson said the new standards were “thoroughly tested with caterers, schools and nutritional experts to make sure they are deliverable, realistic and don’t have detrimental knock-on effects to parents and pupils”. The spokesperson added: “Throughout this process we found that many schools across the country are already creating affordable, delicious meals that meet these standards. Several saw the cost of meals fall.” The DfE said a “phased approach” would be taken to give caterers time to adapt, and that a new national system for monitoring and enforcement is being developed, with full details expected from September 2027.