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The local authority runs a company called Leicestershire Traded Services (LTS), which provides catering to over 100 schools. The council has said they will help schools to find alternative catering options for the 2026/27 academic year.

Leicester County Council said it made a loss of over £300,000 during the 2024-25 academic year. The service however was on course to make £41,000 this financial year, having acquired nine new school catering contracts.

Richard Hunt, head of catering, hospitality and country parks at Leicester County Council, told BBC News: "Despite our improved financial position, the world of school food is changing rapidly with retendering of services by academy trusts and the desire by schools for an overall cheaper service which LTS cannot provide."

The council said Government funding to pay for Universal Free School Meals had not kept pace with inflation. It was recently increased to £2.61 per meal in England, which is still lower than in London (£3), Wales (£3.20) and Scotland (£3.30).

According to LACA research, Only two in ten school caterers (19%) reported that they are currently able to provide a school foods compliant meal within the existing £2.61 funding rate. 

Among the 81% of school caterers who said they could not meet the standards at current rates, the average funding level required to do so was estimated at £3.25 per meal.

LACA, the school food people, are calling for increased school meals funding to a minimum of £3.45 per meal and for it to be ring-fenced to ensure all of the money goes towards the caterers.