Herts Council to consider ‘overdraft’ facility for school meals provider

HERTFORDSHIRE County Council is to consider offering an ‘overdraft’ facility to school meals provider Herts Catering Limited.

The council-owned company – which grew out of a county council department in 2013 – provides lunchtime meals to hundreds of schools, in and out of the county.

And before the pandemic, in 2019/20, the company was reporting an annual profit of £1.2m – giving the county council a dividend of up to £1m a year.

But the impact of the pandemic, food inflation, teachers’ strikes and additional Bank Holidays have all had an impact on trading over the past three years.

And – according to a report considered by a meeting of the council’s resources and performance cabinet panel on Thursday (September 14) – the company has recorded losses in two of the last three financial years (2020/21 and 2022/23).

Those losses have, in turn, says the report, had an impact on cash flow balances – which are reported to be at their lowest following the summer holidays.

And councillors have been told that for a short period of the year (between September and October) this year and next the company will require ‘cashflow support to maintain liquidity’.

Council’s finance chiefs have drawn up a proposal to offer the company a’rolling credit facility’ of up to £1.5m for the next 18 months.

And says the report: “HCL is confident that these are short term cash requirements and the facility will only need to be drawn down for limited periods where operating cash is low due to the seasonal trading nature of this business.”

The decision to offer the ‘overdraft’ will be made by a meeting of the county council;s cabinet on Monday (September 18).

But on Thursday the move was given support by the council’s resources and performance cabinet panel – with a number of councillors pointing to the importance of the service the company offers.

Backing the proposal, Conservative Cllr Steve Wortley pointed to the good service and quality meals the company provides.

“I am sure there would be the option to reduce the quality, but that should be the last thing we should be doing,” he said.

And Conservative Cllr Colette Wyatt-Lowe said: “I think that it’s vital that we carry on ensuring t that we can supply good, nutritious, value for money meals to all the children in our schools that need it.

“And bear in mind that perhaps for some children this may be the only square meal that they get every day – at least for five days of the week.

“And also we know that we have the quality of food within those meals that will keep those pupils engaged and focussed throughout the school day.

“And I’m not sure that that is always the case with packed lunches that come in to school, however loving and well-intentioned the parents are when they are preparing them.”

The proposal was backed unanimously and will be considered by the cabinet on Monday, at 2pm.

HCL serves meals in 333 Hertfordshire primary and 34 secondary schools – as well as a further 90 primary schools out of county.