A private company is to take over, renovate and run a local authority's catering service, under a ground-breaking deal signed between Lewisham Council and the specialist education caterers Chartwell's.
In the first catering contract to be awarded under the Government's Private Finance Initiative, the outer London borough will pay Chartwell's a monthly fee for 10 years to provide school meals and meals-on-wheels.
Using finance from investment bank Guiness Mahon, Chartwell's will invest pound;4.2 million in improving the council's 67 kitchens and serving areas. The changes will affect 97 primary and secondary schools, nurseries and early-years centres, seven day-care centres and staff catering outlets.
"Without this (deal) we would not have the money to make these substantial improvements to our catering service," council leader Jim Mallory said.
Lewisham's catering is currently run by the council and serves more than 3.2m meals a year to more than 20,000 pupils and old people.
A PFI scheme must involve a substantial transfer of risk from the public to the private sector. In this case, the risk is being assumed not by Chartwell's but by the investment bank Guiness Mahon.