Expanding free school meals: a cost benefit analysis

Foreword

Every child should have the opportunity to be healthy, no matter where they live. This includes access to a nutritious diet, but families living in poorer areas are more likely to be flooded with unhealthy food options, and experience worse physical and mental health as a result. For many children and young people, free school meals are their main source of hot, nutritious food.

Healthy, free meals at school help enable all children to have the same opportunities to learn and thrive, no matter where they grow up. The impact has been shown to last well into adulthood, with evidence linking free school meals to improved educational attainment and a host of social, financial and health benefits.

At a time when households are facing unprecedented financial pressures, the Government has the opportunity to unlock the huge potential of school food to better support families.

We and our partners are clear that provision of free school meals is falling far short of what’s needed. Current eligibility criteria means that around a third of children living in poverty in the UK do not qualify for free school meals. As a result, too many children are going without the nutritious food they need to thrive.

That’s why we commissioned PwC to undertake the most ambitious analysis to date into the societal and economic benefits of increasing free school meal provision in England. Together with our partners, we believe that this ground-breaking analysis more than provides the evidence required for a transformational policy shift in school food.

Amidst serious cost of living pressures that are impacting the nation’s health and wellbeing, the case for the Government to invest in our children’s present and future health has never been stronger.

We’re proud to work with our partners, including the School Food Review coalition, to make that case and work towards a better, more equitable school food system.

– Rebecca Sunter
Programme Director, Impact on Urban Health

Why expand free school meals?

All children deserve the chance to grow up healthy, no matter where they live. Yet rising poverty rates mean that more families are finding it difficult to afford healthy food. In 2020/21, 2.5 million people in the United Kingdom accessed food banks, up by almost 600,000 people from the previous year.

In England alone over 1.74 million children were eligible for free school meals in 2020/21, 300,000 more than in the previous academic year. Record inflation and increasing energy prices are to push more households into poverty. Therefore, it is more important than ever that proactive steps are taken to protect children’s health and wellbeing. Expanding free school meals is a powerful way to achieve this.

The COVID-19 pandemic shone a spotlight on the importance of free school meals for families who rely on school food for regular access to nutritious food. Existing evidence (UK and international) on the benefits of free school meal provision indicates that free school meals have long been contributing significant and lasting benefits to individuals and society. The research shows a positive impact on educational attainment, mental and physical health and productivity improvements over the short, medium and long-term.

However, this evidence base contains significant gaps, particularly at the UK level where research has often focused on disparate benefits from free school meals. For example, studies have focused on obesity and child nutrition or educational performance, rather than a comprehensive consideration of the costs and benefits of increasing such provision over time.

In light of this context and the constraints of the current evidence base, we commissioned PwC to undertake an assessment of the costs and benefits of expanding free school meal provision in England.

The costs/benefits analysis (CBA) found that both expansion scenarios presented a positive return on investment (ROI).

For each scenario the total discounted core benefit has been estimated, as follows:

• Expansion scenario 1 (Universal Credit)
  • £8.9bn = Total discounted core benefit for all pupils receiving Universal Credit from 2025-2045
  • Every £1 invested is estimated to generate £1.38 in the core benefits.
•  Expansion scenario 2 (Universal Free School Meals)
  • £41.3bn = Total discounted core benefit for all pupils in state-funded schools from 2025-2045
  • Every £1 invested is estimated to generate £1.71 in the core
    benefits.

Developing the Cost Benefit Analysis

The CBA was developed through the creation of a framework to assess value for money under each of the two expansion scenarios: Free school meal provision for all state school pupils receiving Universal Credit; and Free school meal provision for all children across all state funded education settings i.e. Universal Free School Meals.

The evidence suggested that expanding Free School Meals results in:

1. Education & Employment pathway (core benefit)
   • Increased cost savings to schools
   • Increased lifetime earnings and contributions
2. Health & Nutrition pathway (core benefit)
   • Increased savings on food costs for families
   • Increased NHS savings (obesity)
3. School Food Economy pathway (wider benefit)
   • Increased GVA in the wider economy

Expansion scenario 1: Universal Credit

Every £1 invested in this scenario is estimated to generate £1.38 in the core benefits.
The breakdown of the total discounted core benefit for the Universal Credit scenario between 2025-2045 is estimated to be:

• Increased cost savings to schools: £81m (0.92%)
• Increased lifetime earnings and contributions: £2.9bn (32.55%)
• Increased NHS savings (childhood obesity): £3m (0.03%)
• Increased savings on food costs for families: £5.9bn (66.50%)

Wider benefit: The estimated total discounted benefit of increasing Gross Value Added in the wider economy for free school meal expansion between 2025 and 2045 in England is an additional £16.2bn on top of core benefits.

Expansion scenario 2: Universal free school meals

Every £1 invested in this scenario is estimated to generate £1.71 in the core benefits.
The breakdown of total discounted benefit for the Universal Free School Meals scenario between 2025-2045 is estimated to be:

• Increased cost savings to schools: £0.3bn (0.70%)
• Increased lifetime earnings and contributions: £18.5bn (44.76%)
• Increased NHS savings (childhood obesity): £12m (0.03%)
• Increased savings on food costs for families: £22.5bn (54.51%)

Wider benefit: The estimated total discounted benefit of increasing Gross Value Added in the wider economy for the FSM expansion between 2025 and 2045 in England is an additional £58.2bn on top of core benefits.

These findings, explored in depth in the main report, paint a clear picture. The data and supporting evidence indicate that expansion of free school meals in England would not only multiply the existing benefits to individuals and society but could prove to be a prudent and timely investment in children’s health, education and future working life opportunities now and for the future.

At a time when families are increasingly struggling to access and afford healthy food, the provision of free, nutritious meals in schools is a powerful tool in the Government’s armoury to provide targeted support and accrue long term social and economic benefits.