Edenred’s national voucher scheme contract worth up to £234m, new documents reveal

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The company running the government’s free school meal national voucher scheme was aware before its launch that as many as 1.3 million children may need vouchers, new documents reveal.

The disclosure challenges ministers’ claims that the national scheme was overwhelmed because of “unprecedented demand”, leaving families going weeks without support.

This poses some important questions about why Edenred was unprepared for the demand

Tender documents, seen by Schools Week, state the government’s 12-week contract with supplier Edenred for the national voucher scheme is worth up to £234 million.

This is the maximum potential value of the contract, which works out as providing £15 vouchers for an average of 1.3 million pupils across each of the 12 weeks (1.3 million is the overall number of pupils on free school meals in England).

Andy Jolley, a school food campaigner, said: “This poses some important questions about why Edenred was unprepared for the demand when they were made aware at the outset this contract could amount to providing vouchers for up to 1.3 million children per week.”

In the early weeks of the programme, heads reported the national system was in total meltdown. First, schools were unable to log into the website to claim vouchers, and schools and parents then reported massive issues with redeeming them.

It meant some parents have gone weeks without financial support. Both schools and parents are still reporting issues with the system, five weeks after it launched. Some parents have reported having vouchers decline at the till.

A Department for Education spokesperson said that “improvements have been made to Edenred’s technology system this weekend and we expect the company to continually improve to meet this unprecedented situation”.

They added more than £55 million worth of voucher codes had been redeemed by schools and families. This works out at just over 730,000 vouchers, on average, per week – well below the 1.3 million maximum set out in the contract.

Edenred declined to comment.

The tender document also shows the government seemingly had the option to end the contract after four weeks.

The document states the “initial” contract was for a period of four weeks, with “an option to extend for a eight-week period i.e. up to 12 weeks in total”.

Ministers have been under pressure to fully refund schools to use other voucher suppliers – allowing them to ensure parents get vouchers and also lower the demand on the overwhelmed national scheme.

But the government has refused to do this. It even ignored offers from another firm that said it was able to step in and provide vouchers to 10,000 schools in the midst of the crisis.

In response to a parliamentary question from Labour MP Ian Mearns, the government said the contract “does not include an exclusivity clause and we are able to engage with alternative or additional suppliers, should this be required”.

But it added: “We have no plans to do this at this time.”

An email sent from Edenred on behalf of the Department for Education to schools in early April stated there had been “unprecedented demand and order volumes”.

When previously asked about the commercial arrangements of the contract, the children’s minister Vicky Ford said she would not comment but could “confirm that we are only paying for the face value of goods delivered – in this case, vouchers”.

Edenred would not comment on the specific commercial arrangements, but Schools Week understands that their income is derived from taking a small percentage on each voucher issued.

Schools Week has been told the industry norm is around four per cent per voucher, but it’s understood the percentage slice taken by Edenred is below this figure. However the firm would not provide specific details.

The tender document states the government did not have to follow the usual tender rules for the contract because of the “extreme urgency” and “critical need” of providing a free school meal replacement scheme for parents.

This is allowed under a clause in the 2015 Public Contracts Regulations. The contract was awarded on March 27, and runs until June 21.

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  1. Janet Downs

    In Northern Ireland, FSM payment was sent directly into the bank accounts of parents/carers. In England, the scheme relied on outsourcing to a company whose immediate parent company is Edenred Italia Srl, registered in Italy, and whose ultimate parent is Edenred SA, registered in France.
    Paying the money directly would have saved Edenred’s cut as well as ensuring the money got to recipients quickly.
    (Source: Accounts for Edenred (UK Group) Ltd, y/e 31/12/2018, available from Companies House)

  2. Sent £120 for two kids then sent £30 both of these e-codes would not work and you can’t connect them the school have tried and have not had any vouchers for passed two weeks this company should not have been used and I would like to know what idiot farmed it out to them.