The Department for Education (the Department) and its contractor, Edenred UK Group Limited (Edenred), set up the national voucher scheme quickly, during March 2020, so that children eligible for free school meals could continue to receive support while schools were closed to most pupils. But there were serious problems in the early weeks of the scheme and the Department recognises that, even in the short time it had, it should have done more testing before the scheme went live. In those early weeks, Edenred’s systems failed to cope with the demand for vouchers and the volume of telephone calls and emails. Schools and parents found it difficult to access Edenred’s website and to get answers from Edenred to their queries. There were unacceptable delays in Edenred processing orders from schools and getting vouchers to families. Edenred took action to boost the capacity of its systems and we recognise that performance improved after April 2020. The Department and Edenred have now apologised to schools and families for the problems and inconvenience they encountered in the early stages of the scheme.
The Department focused on firefighting the problems with the voucher scheme and did not actively manage its contract with Edenred. The Department extended the contract twice, increasing its value fivefold, from £78 million to £425 million, but it failed to take the opportunities those extensions presented to renegotiate the terms and secure better value for money for the taxpayer. The Department did not make use of the open book arrangement in the contract until the scheme had finished, and only then established how much profit Edenred had made from the scheme. It declined to share with us details of Edenred’s profit on the grounds of commercial confidentiality.
The extensions to the contract should have enabled the Department to consider how it could maintain the scheme as a standing resource and to tender with other suppliers. After our evidence session on 17 December schools were physically closed to most children again on 5 January with 24 hours’ notice and the scheme was not activated again until later in January. We have not had the opportunity to probe why there was a delay in re-establishing the existing scheme at pace when schools and parents already being familiar with using the scheme.