The direct service organisation (DSO) for Bradford's metropolitan district council has snapped up its fourth school-meals contract outside its local authority area in a move that looks likely to become more commonplace as DSOs seek out more lucrative contracts elsewhere.
Usually, DSOs operate within their own local authority area, but new legislation will allow them to become independent trading companies that could borrow investment capital from financial institutions to fund their expansion.
In April, Education Contract Services (ECS) in West Yorkshire will take over the catering at St Bernard's Catholic High School in Barrow-in-Furness, Cumbria. It follows similar school-meals and cleaning contract wins in Northumberland and other West Yorkshire districts since 2001, taken from other DSOs and private contractors such as Sodexho.
A spokesman for the Local Authority Caterers Association said the few cross-border contracts he knew of were much closer to home, for example, Suffolk DSOs catering for schools in East Anglia and Devon DSOs taking on schools in Plymouth.
ECS business development manager Roger Sheard said the DSO started chasing business outside its patch after the School Standards and Framework Act devolved school meals budgets - and thus choice of provider - from local authorities to individual schools in 2000.
This strategy, said Sheard, has generated £2m in extra annual turnover and has added 150 staff to its existing 1,700. He expects new deals in the pipeline to bump the total to £3.5m by October and £5.4m by April 2004.
On its home turf, ECS has also won back three schools from in-house caterers and Sodexho and has retained two against rival bidders.
Marketing manager Norman Green said the company could not "just strive to consolidate an ever-shrinking marketplace".
"That would be the case if we let the big boys come and pick off our schools every time contracts came up for renewal. We have to grow rather than contract."
Green said the cross-border wins had been well received by employees, who believed their terms of employment and pensions were better protected in local authority hands.
ECS cross-border wins
* St Bernard's Catholic High School, Barrow-in-Furness, Cumbria; starts April 2003; £150,000 annual turnover.
* Queen Elizabeth High School, Hexham, Northumberland; starts September 2002; £215,000 annual turnover.
* St Wilfred's Community High School, Wakefield, West Yorkshire; starts September 2002; £205,000 annual turnover.
* Outward Grange, Wakefield, West Yorkshire; starts September 2002; £300,000 annual turnover.
* School cleaning contracts across West Yorkshire with a combined annual turnover of £366,000.
Source: Caterer & Hotelkeeper magazine, 20 - 26 March 2003