Under changes being proposed by the authority, extra fees are set to be imposed on the 60 schools in the county which use its in-house catering and cleaning service, Shire Services.
The proposals include increasing management fees and introducing charges for staff relief cover.
The council says the changes are necessary in order to address an annual £600,000 budget shortfall in Shire Services, but the plans have been criticised by opposition councillors who say schools are not being given enough notice.
A leaked report by Tim Smith, assistant director commercial services, says the council has previously provided a base budget to Shire Services of almost £500,000 a year, but this was removed in 2019/20.
The report says: “Rising costs, the removal of the base budget and the savings targets imposed on the service, have resulted in it no longer being financially viable for the council and its catering service to continue to subsidise Shropshire school catering services.”
The council has drafted in consultants to review its schools catering service and recommend changes, and the report says the proposals being put forward currently are intended to “minimise the financial impact on the council’s already over-stretched budget” while this work is being carried out.
The changes, which could come into effect in April next year, include increasing the annual management fee charged schools by five per cent, with a minimum of £6,950.
Two options are also being put forward to charge for staff cover – either an annual premium or by billing each school for the cover they have received.
Under the annual premium model, ‘dining centres’ – primary schools without a kitchen – which Shire Services caters for would pay £1,500 a year.
Schools with kitchens would pay varying amounts based on the number of pupils.
Those with fewer than 100 children on roll would be charged £3,500, rising to £4,000 for those with under 500 pupils and £4,500 for those with 900 or less. The largest schools would pay £5,000 a year extra.
The report says Shire Services provides catering for 12 dining centres, 38 primary schools with kitchens and 10 secondary schools.
It also has 90 school clients outside the county, which already pay higher rates. This has previously “provided a cross subsidy to Shropshire schools”.
The report concludes: “There is an urgent need to address the current financial losses incurred by the service which the council and Shropshire tax payers are meeting.
“The council and Shire Services need to increase the management fee for Shropshire school customers and apply an approach to the costs associated with catering relief staff which is consistent for all school customers in all sectors.”
Liberal Democrat councillor Roger Evans said this could result in schools having to use some of their already tight budget, or pass the cost on to parents who pay for school dinners.
The issue was raised by Liberal Democrat group leader David Vasmer at a meeting of the council’s cabinet.
He said: “No warning has been issued – schools are totally unprepared for this sudden increase in meal costs.
“Parents are similarly also unprepared for these increases.
“School budgets are tight – we are one of the lowest-funded authorities in England.
“Many schools have already considered and are in the process of agreeing their budgets for next year.
“For small schools it will mean they can spend less on children’s education.
“I believe these proposals are unnecessary and we should retain a school meals service as a sacrosanct part of the services we provide.
“Marcus Rashford has made clear – and has got a lot of support from the government and from the public – about the importance of school meals and I think that rather than increasing the charges we are making to schools we should be trying to secure proper funding.”
Councillor Vasmer asked that the changes be delayed by a year to give schools more time to prepare.
Councillor Kirstie Hurst-Knight, portfolio holder for education, said a report would be presented to cabinet next month and that no changes had been decided on yet.
She said: “Your questions relate to the timing of changes which are yet to be decided by cabinet. Your points and questions will be addressed along with feedback from schools when cabinet considers the Shire Services catering operations report at a future meeting.”
Council leader Lezley Picton added: “I don’t disagree with you. However Shire Services is currently trading at a deficit which is entirely down to the school meals service, so we have to balance one side with the other.”