The Big Interview: The Third Way

The Big Interview: The Third Way

Birmingham City Council’s award-winning meal service has transformed its fortunes and is now looking to help other local authorities do the same.

Words: Jane Renton

Local authority catering has been in a state of flux for 20 years. Many of the traditional methods of running and financing school meals have changed, often beyond all recognition, but the importance of not just feeding children, but educating them and their parents about the importance of good nutrition to health remains paramount.

“If we can play our part in that with a civic heart and continue to do so under the auspices of local authority, we will play our part in the wider health and wellbeing agenda,” asserts Dale Wild, head of service at Cityserve, Birmingham City Council’s school meal service.

But maintaining that civic heartbeat, particularly when it comes to school meals, where that vital heartbeat can really make a lifelong difference, is something of a Catch 22: local authority budgets are under pressure. Abandoning the school meal service or outsourcing it, is the quickest and easiest way to reduce the town hall payroll.

Ironically, not so long ago, Cityserve came within a hair’s breadth of expiry. Three years ago it was making a thumping loss – in fact a substantial six figure loss. Capita, the management consultancy firm brought in to take a long, hard look at the service, recommended that the council sell it off.

Shortly afterwards in March 2014, the Labour-run council appointed Dale, a caterer with 25 years’ experience, to take over the running of Cityserve. By that time the writing was already on the wall.

“My remit was to improve performance and take Cityserve out from the council within the next 18 months,” he recalls.

But the tables turned. Not only did the new team meet its performance target, but successfully exceeded council expectations by a long shot, turning a hefty loss into a seven-figure surplus in 18 months. It achieved that pleasing result through better personnel management, better supply agreements and mending fences with clients.

“We inherited a huge amount of latent long-term sickness, which we addressed by simply applying the principles and processes we had already agreed with the council,” says Dale.

Cityserve also embarked on a hard-hitting campaign spelling out the benefits of the council to its existing schools.

“We warned them that if they didn’t use us, they would lose us,” he adds.

It quickly produced the desired results, cutting the attrition rate, which at one stage was as high as 25% to just 5% within the same period.

But there was financially unviable business that Cityserve needed to abandon. Dale and his team, which by this stage also included Brian Cape, who joined as commercial development manager, set about disengaging from.

“We had to go through a process of re-pricing or letting go of those contracts which were no longer financially viable with as much good grace as possible,” says Dale.

With its cash crisis averted and any plans to sell off the council-owned foodservice now firmly shelved politically, Cityserve could now focus on improving its meal service, which with annual turnover of £35m a year and 65,000 pupils in 260 schools to feed each day, is one of the largest such contracts in England.

But what makes this contract so particularly challenging to run is the extent and complexity of Birmingham’s ethnically diverse population. For example, in one of its schools, 85% of the children are of Somali origin; some 37 different languages or dialects are spoken, along with different cultural and different food traditions. Acceptance of those levels of diversity is a key authority mandate and one that requires a degree of social and cultural engagement that many people would find logistically challenging, if not impossible to balance.

However, Cityserve took an early decision to engage heavily with individual school councils to find out directly from pupils what they themselves actually wanted to eat.

“What we then had to do was to figure out how to make their preferred meals compliant with the School Food Standards,” explains Brian.

That meant reformulating menus. It also meant revising the way the company branded itself, which was as Brian admits, “a little behind the curve”.

“It was all very Munch Bunch, garden gang, type of stuff. We needed something that would work across both primary and secondary schools and marketing that avoided patronising pupils,” he says.

Allowing pupils the opportunity to have what they wanted to eat resulted in what Dale describes as “the brave decision” to spend £300,000 of the catering service surplus on a new menu development kitchen that became operational in March 2016.

“It was a massive sea-change for us,” he says. “We went from having menus that pandered to suppliers to ones where the focus was on the children themselves and their health and nutritional requirements.”

They also realised they would need a development chef to focus on their new direction, only to discover that the council didn’t actually have a specified job description for that particular role. So, it took a further six months to push that through all the various local government protocols required.

But the new kitchen has quickly become more than just a menu development centre for a uniquely ethnically diverse city. It has also grown into an engagement centre, where children come and get involved in the preparation of their school meals and where practical demonstrations are given by school chefs underlining the importance of good nutrition to lifelong health. In a kitchen that looks more akin to what you might expect to find at the back of a healthy restaurant chain, children learn about the often-concealed levels of sugar in many commercial snacks and drinks and the problems that can pose for their individual health. It also involves encouraging pupils to make the right food choices – choices that go beyond initial preferences for burgers and chips. It involves encouraging them to try new and often exotic vegetables and fruits.

The Cityserve team have been astounded by the success of school visits to their kitchen. Their popularity among schools has exceeded their wildest dreams. In fact, they have secured 100% retention rates among all visiting schools.

“It is truly wonderful seeing the kid’s faces light up when they come in to see us,” says Brian.

It’s also a revelation for school leaders and their business managers who can see the extra value and engagement that Cityserve strives to provide.

“It isn’t just about getting a bill from us at the end of the term for the meals we have supplied. It’s also about the interaction, the food development and education we provide,” says Brian.

Cityserve is in effect doing the job of the old domestic science teacher, something that most schools no longer have the time nor resources to provide. But all those additional services depend on long-term financial viability. Cityserve may have averted its own financial crisis that threatened its own existence, but is not ready to rest on its laurels.

It is looking for greater scale than its current procurement purchasing of £13m a year on food currently affords. It also wants to sell aspects of its own catering expertise to other local authorities or to individual schools or groups of schools who may be considering the long-term sustainability of their own school catering services.

“That financial and cultural success we’ve had in turning Cityserve around can be multiplied across a number of other areas within the council,” says Dale. “There is also an opportunity to influence the way other local authorities modernise their own services or potentially join with us to deliver better and more sustainable commercial services.”

This model doesn’t involve taking over catering services of other authorities but rather a business model that Dale describes as one of “plug and play”, involving other local authority catering services applying only for specific services rather than a full-scale joint venture or merger, whether it might be procurement or legal compliance.

“We haven’t yet defined how that model will look, but we are saying to our neighbours, ‘look we’ve been on a very, very hard journey, developed this brand, developed food concepts and generated on an annual basis a very substantial suite of menus; we spend £13m a year on food, we are an accredited trainer. We are also about to put in substantial IT networks to automate a lot of the management and accounting systems, you can ride on our coat tails on the terms that suit you,’” explains Brian.

In effect they are offering a third way to other authorities who might currently be considering disbanding their service and outsourcing school meals to an outside contractor, as Coventry recently has done.

As more schools have to take their catering service in-house there is an opportunity to co-operate with operations such as Cityserve, which can provide a suite of services that schools and can pick and choose from.

“Instead of being a problem, schools can work with us on whatever aspects they want, whether it’s legislative compliance, menu diversity and compilation, supplier agreements as well as all the office back-up services we can offer,” adds Dale.

What Cityserve is not doing is offering a one-size-fits-all approach or preparing to take on a merger or joint venture that would add unacceptably to any existing payroll and pension liabilities for its own council.

Equally, current talks with neighbouring authorities could result in Cityserve managing respective catering services with them rather than for them, so that benefits can be shared by mutually participating councils.

“It’s an in-sourcing agreement rather than an outsourcing agreement,” says Dale.

Many regard local authority catering as a service that is slowly withering on the vine as budgets continue to evolve to individual schools or groups of schools. But reports of its eventual demise, as Cityserve’s performance demonstrates, appear to be distinctly premature.

There is a third way and the civic heartbeat is still ticking strongly as far as Birmingham City Council’s school meal service is concerned.