Leaning over the cliff edge

Leaning over the cliff edge

The government has confirmed how it will set eligibility criteria for Free School Meals under Universal Credit. But what does this mean for school caterers and is the future as bleak as it seems?

Words by Morag Wilson

Many of you will be able to report a time when you or your frontline staff have witnessed a child who is hungry and in desperate need of the free meal they are entitled to have at school. Some of you will notice a difference between a child who eats lunch on a Friday and that same child who comes into the dining room on a Monday after a weekend where food has been scarce.

It’s what makes these changes to the eligibility for Free School Meals (FSM) under Universal Credit (UC) so significant – we are emotionally tied to these children and their families and we know the extent of the issue.

But if we take away the emotional response to this situation, what will be the impact of a £7,400 cap on the school catering industry? Will this mean thousands of children will no longer be entitled to FSM and your service will no longer be viable? Will the government’s planned rollout mean impact will be slow and caterers will have time to adjust to the changes?

While we can only speculate, here are the key facts of what changes are to occur if the plans go ahead.

What’s happening

From April 2018 there will be an annual net earned income threshold of £7,400 for FSM. In practice, this means a family will have a net income of between £18,000 and £24,000 once all benefits are taken into account. Households earning under this £7,400 threshold will be entitled to FSM.

As intended through UC, this system measures eligibility on a household’s earnings rather than the number of hours worked. Eligibility will be based on calculating earnings on a monthly basis, verified from the household’s most recent UC assessment periods.

This threshold will remain until the end of the UC rollout period and will then be kept under review. (Note that this means families will have to wait until at least 2022 before adjustments are made in line with inflation rises).

The government estimates that by 2022 (the planned completion of UC rollout), there will be around 50,000 more children entitled to FSM compared to the previous benefits system. This is based on population projections, earnings growth forecasts, employment rates and expected levels of take-up.
Some families will be protected while new claimants won’t be: From April 2018, all existing claimants will continue to receive FSM until UC is fully rolled out by 2022, even if their earnings rise above the new threshold. Any new claimants however, who are earning above the threshold after April 2018, will not be eligible for FSM.

No eligibility checks will be required for these protected families during this period; schools would leave these pupils flagged as protected pupils.

Once UC has been rolled out, existing claimants that no longer meet the criteria will receive FSM until they finish their current phase of education (i.e children who move from primary school to secondary school).

Protecting families whose earnings fluctuate from month to month, earnings will be checked over a period of up to three months. The government also says it is looking at ways to ensure that very low-income families can receive FSM during the assessment period of UC (currently it takes up to six weeks for UC payments to come through).

Registration

Currently, parents and carers must request FSM and some respondents to the consultation suggested this is an opportunity to remove that barrier and introduce automatic registration. The government said it will “explore what opportunities may exist in the longer term to make the registration processes more efficient”. However, it said this could just mean highlighting best practice from schools and local authorities.

Automatic enrolment would certainly make things easier. While local authorities such as North Yorkshire report high take-up of FSM by families who are eligible (pretty much 100% in primary schools), others such as Plymouth through catering cooperative CATERed report an 80%/20% split of those entitled to FSM and those who take it.

Tim Blowers, head of county catering service at Derbyshire County Council (in which Chesterfield is one of the UC pilot areas), says that while schools and the authority have improved the way they are encouraging parents and carers to claim for FSM, “anything that makes it easier for them would be better”. Derbyshire has recently seen a fall in FSM numbers, from around 25% to nearer 20% – still much higher than the national average of 14%.

Why not extend it to all?

As with current UC claimants, there are calls for eligibility of FSM to be for anyone claiming UC. Responses to the government’s consultation also suggested that the plans might discourage some families from raising their earnings above the threshold.

The government argues that this would not be economically possible as it would mean that around half of all pupils would become eligible for FSM, compared to the current rate of around 14% in England.

“We must ensure that we use public money effectively and that free school meals go to disadvantaged families on low incomes,” the report states.
The report adds that not only would there be huge costs for FSM provision but also potential capital expenditure for schools to expand kitchen and dining facilities if they have a significant increase in meal uptake. The government says it will support schools to meet the higher costs that will result from the anticipated increase in the number of pupils eligible for FSM.

What does this all mean? While on average 14% of children in England are entitled to FSM, obviously some areas have higher averages than others. In North Yorkshire County Council, for instance, FSM eligibility is around 11% and schools are very good at targeting parents to apply for their entitlement. In Derbyshire, Blowers is confident that any loss in FSM numbers won’t affect the overall catering service.

In Plymouth, CATERed provides FSM to around 16.6% of the primary school population, more than 3,000 pupils. A drop in FSM meal numbers will very possibly affect the viability of the catering service let alone the families themselves, believes Brad Pearce, managing director of CATERed.

“We think the danger is the hidden levels of poverty and household food insecurity,” says Brad. “It will be those families who try to work and are ‘just about managing’ who are most likely to fall outside the criteria.”

While new claimants will be the first to feel the impact of these changes by not being eligible for FSM, the first phase of impact to caterers will likely come from those moving from primary school into secondary school in 2022. Caterers will be able to speculate how many meals this equates to in their area, but in Plymouth, based on January 2017 census figures, this is 415 pupils who are currently entitled to FSM. Any drop in that number is a substantial loss in turnover for any business to lose.

The rollout date of 2022 might seem way off. But caterers need to start doing their sums now to anticipate any losses in meal numbers (or increases, as the government believes there will be) and assess the impact of this significant change in how the Free School Meals system works.

The situation now

Universal Credit was introduced in 2013 to replace six means-tested benefits and tax credits. Payments are made on a monthly basis and claimants must apply online only.

All current claimants are entitled to Free School Meals. As of January there were 730,000 claimants, of which 40% were in employment.
The final full rollout of Universal Credit is expected to be 2022.