So where IS all the free school meals cash going? Charity reveals how £88m 'disappears' every year as catering firms make profits and headteachers slice off top to pay staff and utility bills

A perfect storm of problems besetting the school system saw £88.3million of free meal funding vanish a year – while some is split off to pay staff wages and water bills.

The government provides £2.34 for each eligible pupil per day, which has been increased in the third lockdown by £3.50 a week, or an extra 50p per school day.

But in the past 48 hours the country has been shocked by the quality of the meals offered to pupils, with sparse hampers featuring little more than the bare essentials.

MailOnline can reveal the huge disparity between the funding sent and the final product is down to soft government guidance, business demands, a system designed to reduce the stigma of free meals and a shortage of money in schools.

That system puts an allowance on a smartcard for pupils to buy meals at the school canteen, which was then replaced by the controversial food parcels in lockdown periods. 

Tory MPs are putting huge pressure on Boris Johnson to reform the system, as it was revealed cash meant to feed children is being skimmed off by private companies to boost profits. Headteachers are also using some of the taxpayers’ money to pay wages and energy bills.

Influential Conservative backbencher Steve Baker told MailOnline: ‘I know the Government is fully seized on this issue and working hard for change – furious Conservative MPs are insisting on it’.

This is what is supposed to be in one child's school lunch parcel for a week during lockdown

Keir Starmer circulated showing the Government guidance on what meal packs should have

Breakdown of grant for some schools: Headteacher admits that after 'overheads' like utility bills and staff wages, cash for pupil meals can be as little as £1 per day.

The government's rules on the universal infant free school meals grant has detailed term and conditions tied up with red tape for education providers.

But the small print on the funding reveals a loophole many have been able to take advantage of to cover a lack of money elsewhere.

As long as the school fulfills its legal requirement to offer free school meals it can use the remainder for other purposes.

It means if they can feed pupils for £1 a head, it frees up £1.34 for other areas.

The guidance reads: 'The grant supports schools in delivering the legal requirement to offer free school meals, meeting the school food standards, to all their reception, year 1 and year 2 pupils.

'Subject to meeting this legal duty, schools may spend the grant for the purposes of the school; that is to say for the educational benefit of pupils registered at that school, or for the benefit of pupils registered at other schools.

Over 90 per cent of schools receive funding for free school meals for some of their pupils

Baroness Boycott and the Feeding Britain charity say £88million a year vanishes from funding

How much should the free school meals really be worth? 

Free school meal allowances are usually £2.34 per pupil per day, an additional £3.50 per seven days has been added in lockdown, equalling £15.20 a week.

The Government has told schools to work with their school catering team or provider to make up the food parcels, especially if kitchens are open.

Unlike in the first lockdown, vouchers are considered only after every effort to provide the supply boxes have been exhausted.

The government guidance suggests 'you can consider other local arrangements, which might include vouchers for local shops and supermarkets'.

School costs of providing the vouchers can then be reimbursed by the government to the amount of £15 per week.

A school catering source told MailOnline: 'Staff haven't experienced anything like this before. They are working through a pandemic to make the food boxes for the parents some don't even collect them.

'For those in school staff were expecting 120 children from the key worker parents and vulnerable children for free school meals still, 40 turned up.'

'They may also spend it on community facilities, for example services whose provision furthers any charitable purpose for the benefit of pupils at the school or their families, or people who live or work in the school’s locality. Schools do not have to spend the entire grant in the financial year beginning 1 April 2020; they may carry forward some or all the grant.'

The use of the funding in this way has been confirmed by some schools already in the UK.  

Katie Barry, a headteacher at St George's Church of England Community Primary School in Gainsborough, told Newscast: 'Obviously we're meant to feed all the children that are still in school - the vulnerable children and the key worker children - so they get a hot lunch as normal.

'But then we're obliged to also make sure all the children that are on home learning that are eligible for free school meals have a food parcel.

'Schools with their own kitchen are strongly advised to offer food hampers rather than exploring the voucher route.

'I think it may be so we know that the children are getting healthy food because we have to meet the national food standards but also I think there's an economical reason behind it.

'Well all we're given extra is an extra £3.50 a week, which was announced yesterday. So obviously the money we normally get for free school meals we have a lot of overheads so it's £2.30 a meal but I only have about £1 to spend on food because we have obviously all the wages and the electricity and the water and everything.

'So our food parcels, really we only have about £5 a week to spend on food then we got the extra £3.50 yesterday and so it's significantly less than £15 given out to families in vouchers.

'It's not a lot to get five healthy meals for a growing child who's expected to be doing home learning and they need to be well nourished in order to be able to engage well with their learning.'

This food parcel is supposed to feed a child for a week every school day for lunchtime

This sparse selection was given to a child going to a primary school in Bingley, West Yorks

Free school meals have existed for more than 100 years 

The origin of free school meals stretches back to the Education (Provision of Meals) Act 1906 when local authorities were granted powers to provide food to the poorest children through local taxes. 

This system remained until the Second World War when in 1941 nutritional standards were drawn up, followed three years later with the 1944 Education Act mandating local authorities to hand out FSM to the poorest pupils.

In 1986, during Margaret Thatcher's premiership, the Social Security Act required local authorities to outsource the supply to private companies.

In 2013, a new, more rigorous set of foods standards was implemented. 

Food supply businesses also have to survive by making some profit on the services they provide.

It means using one of the hundreds of possible suppliers eats away at the already small amount offered to children. 

But the largest black hole in free meal funding is bizarrely caused by a system designed to make taking the no-cost dishes less embarrassing for older children.

In secondary schools smart cards were introduced to all pupils to load up with money, or in the case of students getting free meals, have the amount credited each day. They use it to buy lunch at the school and has been running for the past ten years.

However a quirk in the system means if the amount is not used, or completely spent, the daily allowance is wiped and not carried over to the next day.

In lockdown times these free amounts have been replaced by the parcels. 

It was exposed by the Feeding Britain network and Professor Greta Defeyte in a report last year.

It said it found £88 million was disappearing from free school meal cards.

The report said neither the Department for Education nor the National Audit Office were able to track down where that money went.

Value of free school meals claimed but not taken by region in the UK

 

Baroness Boycott, chair of the Feeding Britain charity, said: 'Schools overall are doing an amazing job and have stepped up fantastically.

'I think most contractors as well have done a very good job. You have to remember that for the contractors on the whole because we only have one day of school and they were expecting a whole term, many of them had indeed delivered all their food, which would have been things like carrots and pasta.

'They've done it before, so for them they've faced a lot of problems because of this but clearly this is the really bad situation.

'I think the government has not on the whole done too badly but I do think there are a lot of problems going down the pipe, so to speak.

At Feeding Britain we did a big investigation into what happened to the money. 

'We found that actually £88million a year was disappearing as a combination of money that didn't get rolled over.

Also the awful truth is that food is always seen as the bit of the sandwich that you can squeeze in this time of incredible cuts to councils, cuts to schools' budgets, bits of the food budget were being taken off.' 

Children's Minister Vicky Ford MP said the government was dedicated to making sure pupils had good school meals.

She said: 'Government will be demanding that caterers urgently improve the quality of lunches they provide to eligible children – this will make sure every one of them receives a healthy, nutritious lunch that will give them the fuel they need to focus on learning at home.

'The photos being shared on social media last night and today are completely unacceptable and do not reflect the high standard of free school meals we expect to be sent to children.'