Free school meals could cost schools over £310 million per year, study reveals

Schools across England face an annual shortfall of £310 million in covering the cost of free school meals unless urgent action is taken to reform the national school meals funding system, according to a new report led by Northumbria University. 

Earlier this year, the government announced changes to the eligibility criteria for means-tested free school meals. All pupils from households in receipt of Universal Credit would benefit from free school meals – over 600,000 children according to government predictions. 

While the move was widely welcomed by those who have long campaigned for free school meals to become more universally accessible, experts were concerned that the complexity of the National Funding Formula and the free school meal-associated Pupil Premium would cause funding issues that would need to be urgently addressed. 

A new analysis of Department for Education data has found that state-funded primary and secondary schools in England could be left needing to find between £11,000 and £25,000 per year from their individual teaching and learning budgets to ‘top up’ the costs of free school meals during the 2026/27 academic year. This is equivalent to the cost of over 7,700 teachers’ salaries. 

Researchers from Northumbria and Lincoln universities and Alliance4Children modelled the financial impact of providing free school meals to those children already receiving them and the additional recipients on the budgets of state-funded primary and secondary schools using open data from the Department for Education. 

The government currently awards all state funded schools in England £2.58 per free school meal child to cover the cost of providing a meal each day, with an increase to £2.61 due in the 2025/2026 academic year.  However, caterers face sharply rising costs and are charging schools an average of £3.00 per meal, a rate they say is below the real cost of providing a meal that adheres to national School Food Standards.  

The researchers found that combining the additional free school meals to pupils from households receiving universal credit with the existing free school meal costs would lead to a shortfall of over £310 million during the 2026/27 academic year across England – equivalent to the annual salary of more than 7,700 teachers – unless urgent action is taken to address the issue. 

Their modelling indicates that individual primary schools would have to find an average of £11,708 from their budgets in 2026/27, with secondary schools needing to find an average of £25,565. 

Of concern, schools in the most disadvantaged areas with higher proportions of pupils receiving free school meals would be hardest hit. 

Their modelling estimates that primary and secondary schools in the North West would have a combined shortfall of £45.5 million in 2026/27; with the West Midlands facing a shortfall of £38.3 million and the South East facing a shortfall of £44.5 million. 

Headteachers are already reporting that they are needing to find funds to match the difference from their school learning and teaching budgets, meaning they are unable to fund certain school activities for children or replace teaching and support vacancies.  

Meanwhile, caterers and school food campaigners calculate that the real cost of providing a school meal is between £3.15 and £3.40, dependent on contract size, which has resulted in disparities in the quality of meals across schools.  

Professor Greta Defeyter OBE, Director of the Healthy Living Lab and Dean for Social Mobility Policy Engagement at Northumbria University explained: “Our findings are startling. Inflation, rising food prices and increases in national insurance have all impacted on the overall cost to caterers for providing free school meals and many schools are needing to take money from their own individual teaching and learning budgets to top-up the difference between the funding they receive from the government and the amount they are charged by the caterer.   

“When we modelled the data to include the additional pupils who will be entitled to receive free school meals in the future it is clear that this will lead to a national deficit of over £310 million per year which schools are needing to fund – this is equivalent to the cost of employing over 7,700 teachers.” 

The researchers noted the complexity of the existing funding system, and as education is a devolved matter, there are varying funding allocations across the United Kingdom. Schools in England will receive £2.61 per day, per head, whereas schools in Wales receive £3.20 per head and those in Scotland receive £3.30 per head.  

Professor Paul Stretetsky, a social and political scientist at the University of Lincoln, added: “Our findings are a clear cause for concern, and we would also highlight that this deficit is not evenly spread across England. Those schools with the highest numbers of students receiving free school meals are in the most disadvantaged areas, and they are the hardest hit in terms of deficit per pupil. 

“To illustrate, if we look at the difference between the North East and the East of England, while a shortfall in free school meal funding to secondary schools in both regions have a significant deficit to their teaching and learning budgets, there are clear regional differences at the pupil level between regions, with a loss of £41 per pupil in the North East of England compared to a loss of £29 per pupil in the East of England, fuelling disparities between regions.” 

J. Paul Wright, CEO of Alliance4Children, noted: “Free school meals act as a safety net for pupils, and when accompanied by quality teaching and learning, together they can reduce health and educational inequalities in our society. However, the amount of payment needed to top up free school meals is not distributed evenly across schools. In fact, the most deprived schools have to pay the most from their operating budgets. Thus, the shortfall in free school meal funding presents a source of significant social injustice between schools, and regions.” 

Professor Defeyter added: “The reported losses at pupil, school and regional level, presented in this paper will undoubtedly result in some schools being able to provide fewer learning opportunities to our most disadvantaged pupils, further entrenching the well-known gap in educational attainment, and reducing upward social mobility. 

“Headteachers across the country have spoken to me in confidence, and in fear, about the decisions they have had to face as a result of these rising costs. Teaching vacancies are not being filled; extra-curricular activities are not being funded and existing provisions, such as forest schools, have been cut-back to prop up the costs. 

“While we absolutely welcome the UK government’s decision regarding the uplift of free school meals to all in receipt of Universal Credit, and the additional money this brings households, this must not come at a cost to individual schools and investment in children’s education. 

“We urge the government to explore funding models and mechanisms that are more socially just to all schools and school caterers regardless of size and geographic location.” 

Full details of the study are available in the paper The UK Government needs to invest in children through properly funding both FSM and Education. 

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