A contract to provide free meals to schoolchildren during lockdown was let without competitive tender because the process would have taken too long, according to the National Audit Office (NAO).
In a report the NAO said Edenred was selected to run the scheme – which ran into difficulties in the early stages – despite an assessment finding the company’s UK business “did not have the financial standing that would normally be required for a contract of this value”.
The report said a guarantee from a parent company would normally be sought in these circumstances but the Department for Education (DfE) “judged this would not be possible in the time available and other mitigations were sufficient”.
The scheme, set up in 18 days in March 2020, involved providing £15 vouchers each week to children eligible for free school meals. In January 2020 1.44m children in England were eligible.
Schools and parents said they could not get prompt support from Edenred and calls to the company’s helpline “grew rapidly”, peaking at 3,940 on 14 April. Email inquiries peaked at 8,878 on 29 April.
However, the scheme’s performance improved after measures including upgrading Edenred’s IT systems and daily progress calls with DfE officials.
The DfE has forecast the cost of the scheme will be £384m and it “does not know whether Edenred made a profit from running the scheme”, despite an open book arrangement. Edenred was paid £15 per voucher by the DfE and its profit depended on the discount it could obtain on the voucher’s face value when purchasing them from participating supermarkets.
The NAO said Edenred was a sole supplier to the Crown Commercial Service (CCS) for employee benefits under an existing framework and CCS confirmed “no issues had been raised about Edenred’s prior performance as a government supplier”.
The report said the DfE “concluded that seeking alternatives to Edenred would require a competitive procurement exercise that would take too long.
“It therefore decided to award the contract to Edenred by a negotiated procedure, without prior publication of a tender.”
Gareth Davies, head of the NAO, said: “DfE got the voucher scheme up and running quickly to support vulnerable children who would no longer be receiving free meals at school.
“Problems at the start of the scheme led to a frustrating experience for many schools and families, but DfE and Edenred worked hard to get on top of these issues. Performance steadily improved as the scheme progressed.”
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