St John’s, an 820-pupil comprehensive in Epping, has become the first school in Essex - and one of only a handful of local authority schools in the country - to set up its own catering department.

Since taking over from the county’s own organisation, Essex Food Services, in January 1995, the catering department has earned a steady profit, a third of which goes into school funds. St John’s also has more control over prices and nutritional standards.

While the venture is not without risk, “it has turned out even better than we thought”, Ken Edwards says. He thinks other schools should consider following suit.

“We hear horrendous stories of grant-maintained schools letting out their catering to companies not used to school conditions and demanding subsidies from the budget. But GM schools have been asking us for advice.”

He adds: “A high-quality service is very important to us. Because we had an excellent team on site, we felt we were perfectly capable of managing it on our own. We can maintain reasonable quality at reasonable prices.”

In April, following the first full year of operation, the school decided to invest the catering profits in a swipe-card vending system.

According to bursar Marion Bradford, the cashless system shortens queues at mealtimes and reduces the amount of cash handled by staff. It also provides useful information about buying habits, and makes it harder for pupils to tell who is receiving free meals.

Mr Edwards identifies three ingredients for success: strong financial controls, a good catering department and a location which discourages pupils from leaving school at lunchtime. “We are in a country town and a lot of pupils are bussed in. We strongly discourage mobile food outlets.”

St John’s still uses the county purchasing and support services. The biggest difficulty it has encountered has been the complexity of the accounting system used by the LEA, but Mrs Bradford hopes to simplify arrangements.

King’s Manor comprehensive in Shoreham, West Sussex, set up its own catering service in August 1994 and has never looked back, says deputy head Brian Creese. “We were not dissatisfied with the county’s service, but we were keen to get away from some of the fast-food elements that were developing. There was a conflict with some of the messages we were giving students in social education and home economics about nutrition and health. “We also wanted to restore some feeling of civilisation to the process. It is not like the school dinners that adults remember, but a number of the staff working here are parents of our children and they have got a stake in the school.”

While the aim is to break even, the service makes a profit, he added. “We buy a lot locally now and there are plenty of suppliers willing to give you what you want.”

According to Mark Braymah, principal adviser to the Association of Direct Labour Organisations, several schools have set up “direct- service organisations” for cleaning and grounds maintenance. But for catering, which is not automatically devolved under local management, such moves are uncommon. This, however, may change: “I think it is fair to say that a lot of authorities are moving towards devolving their catering budgets.”

Under LMS, schools have the right to set up their own direct service organisations, although they may have to go through the statutory competitive tendering process. A DSO at a local authority school still has to meet statutory financial targets. Its performance will be included in the audited accounts submitted by the local authority to the Secretary of State.

“Most schools have seen there are benefits from having an authority-wide meals service in terms of purchasing and the additional costs of running your own direct-service organisation.”