Extending free schools meals eligibility to all children from families receiving universal credit will leave schools tens of millions of pounds further out of pocket, analysis suggests.
Ministers expect around 500,000 more children to benefit when the extension comes into effect in September.
But leaders have warned plans to put up per-meal funding by just 5p go “nowhere near far enough”, with many already spending tens of thousands from their core budgets to subsidise food.
The Department for Education confirmed to Schools Week that funding for means-tested free school meals would rise from £2.61 per meal to £2.66 in September.
However, School Food Matters estimated in 2024 that the true cost of providing a meal was £3.16. Some catering groups estimate the figure is even higher.
Taking the £3.16 estimate, this would mean a shortfall in funding for the 500,000 expected to gain free school meals eligibility in September of £47.5 million.
‘There is nothing left to cut’
Mairead Waugh, headteacher at St Philip Howard Catholic Primary School in Hatfield, Hertfordshire, said caterers charge £3.50 for her school’s meals.
Plugging the 89p-per-meal gap for the school’s 100 pupils on FSM costs “approximately £23,000”, she said, and the 5p uplift will go “nowhere near far enough”.
While she welcomed the expansion of FSM, Waugh said: “Potentially we have 400 [pupils] on universal credit. We are heading for the perfect storm.”
She added that between FSM and other financial demands, including unfunded pay rises and delivering breakfast clubs, “something has to give”.
“We have cut everything back to the bone. There is nothing left to cut back.”
Professors Greta Defeyter and Paul Stretesky, who research child food insecurity including school meals, said varying proportions of pupils receiving FSM caused inequalities between schools.
They spoke of a headteacher from the north east who recently “[had] to close her forest school” as she owed caterers “approximately £6,000”.
“This resulted in a loss of an educational activity that benefited all children,” they added.
Julia Harnden, deputy director of policy at the Association of Schools and College Leaders, said the FSM expansion must be “adequately funded”.
While the union welcomed the funding uplift, she added: “We are concerned this is not enough to prevent some schools having to cover the cost of free school meals from their own budgets.
“This is something that needs to be put right. The government must avoid giving with one hand and taking away with the other.”
Stephanie Slater, founder and CEO of School Food Matters, said the FSM expansion “must be matched with realistic funding”.
Fears quality will fall
Simon Kidwell, headteacher at Hartford Manor Primary School and Nursery in Northwich, Cheshire, and a former National Association of Headteachers president, said his school spent around £10,000 on free school meals, up from £5,000 two years ago.
And this is despite just 6.6 per cent of pupils claiming FSM, well below the 26.3 per cent primary school average.
The sum would otherwise be spent on education – “extra hours for a teaching assistant, curriculum development or speech language intervention”, said Kidwell.
He feared the situation may worsen when FSM expands in September, pointing out the 5p increase “amounts to a rise of less than 2 per cent”.
He added: “With the minimum wage set to rise by 4.1 per cent and food inflation running above 4 per cent, this is, in reality, yet another cut in funding.
“[Schools will] start looking for the cheapest possible catering option, [leading to] a fall in nutritional standards, or portion size”.
Cuts of meat
Research suggests many caterers are already making compromises.
In a member survey by industry body LACA, 30 per cent of caterers said they had reduced portions of certain items due to increasing food prices, while 13 per cent had reduced the size of overall meals.
Over half (56 per cent) had replaced meats with cheaper protein sources, and 60 per cent had reduced menu options.
Just two in 10 caterers said they were able to provide a school food standards-compliant meal within existing funding rates, and those that couldn’t estimated they needed £3.25 per meal.
LACA national chair Brad Pearce said the government’s new £2.66 per-meal funding rate was “wholly insufficient”, particularly in light of the September FSM expansion.
“Food inflation has risen by more than 50 per cent since 2020, yet this rate is expected to cover food, labour and overheads for both primary and secondary pupils,” he said.
“As eligibility expands, this chronic underfunding will place even greater pressure on schools and caterers. Expanding entitlement without properly funding it risks undermining both the quality and sustainability of the service.”
Catering firm closures
The underfunding is already having consequences for the catering sector.
In the second half of 2025, five catering providers announced they would cease operating in schools, including three local authority-run firms.
Co-operative firm CATERed, run by Pearce, will stop offering meals at schools in Plymouth after July. Plymouth City Council announced the closure with “enormous regret”.
“Due to continually rising costs and the level of funding available for [free school meals] this is no longer viable – the sums simply no longer add up,” it said.
Elsewhere, Leicestershire County Council will also stop providing school food services in July, citing “a backdrop of significant challenges, including unprecedented increases in food and labour costs”.
It said: “The council notes that funding from central government for universal infant free school meals and free school meals has not kept pace with inflation and that research from School Food Matters and others indicates that funding should be in excess of £3 per meal.”
A Department for Education spokesperson said the FSM eligibility expansion would benefit “over half-a-million” pupils and “lift 100,000 children out of poverty”.
“To make sure meals are high-quality and nutritious, the government is working closely with the sector to review the wider school food system so it supports the FSM expansion and the upcoming school food standards.”
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