'You pay the price for the price you pay' - original school lunch contractor

An organisation that lost school lunch contracts through the government's shake up says the auditor-general's scathing review confirms long-standing warnings about the coalition's revamped programme, while accusing officials of running a flawed procurement process and prioritising cost over quality.

An investigation by the auditor-general found the Ministry of Education achieved significant cost savings after redesigning the programme around a $3-per-meal model. However, it also raised serious concerns about the programme, including that it was unfairly procured, ignored risks with suppliers and had not been properly measured, monitored and managed.

Wairarapa organisation Trust House previously produced around 3700 lunches a day for 21 schools across Wairarapa, Hawke's Bay and Tararua under the previous model. Today, it supplies just 15 lunches a day to a single school.

Its chief executive John Prendergast said Tuesday's report validated warnings original suppliers raised nearly two years ago, but were ignored at the time.

He questioned why concerns were not identified earlier, saying auditors had observed the ministry's procurement process in real time.

"I don't understand how Audit New Zealand could sit through the procurement process and not raise any of these issues at the time, yet now the auditor-general has found all sorts of problems," he said.

Prendergast slammed the procurement process as "appalling" and "badly deficient", and said that some suppliers were told contracts for Years 1 to 6 lunches would continue and therefore did not tender for them.

"They then found out, through the media, that those contracts had been given to someone else without any opportunity to bid," he said.

He also criticised the Ministry of Education's decision to extend the existing supplier contracts for another year without reopening the process to competition.

The auditor-general similarly found reliance on a single supplier created risks that were not adequately managed.

Prendergast was now calling for the entire programme to be reassessed and reopened through a transparent procurement process.

"So, that good quality suppliers have the opportunity in a fair and transparent process to put proposals in."

'You pay the price for the price you pay'

While the report did acknowledge that the revamped programme did reduce costs, Prendergast said those savings came at a significant cost to quality.

"The ministry went to market and said, 'We want to buy a lunch for $3 per child. Can you do it?' Most suppliers said no because it simply wasn't possible," he said.

"Sometimes you pay the price for the price you pay."

The report found that half of the lunches served as part of the programme last year didn't meet nutritional standards, while also raising concerns about significant food waste and student attendance.

New Zealand Principals' Federation president Jason Miles questioned whether politicians could live on a $3 lunch budget.

"I would ask if they would agree they could have a $3 nutritional meal for themselves. Our children deserve better," he said.

He said that with one in seven children living in poverty, the school lunch programme remained critical to ensuring students were ready to learn and said the government needed to prioritise improving meal quality rather than focusing solely on reducing costs.

Health Coalition Aotearoa said that despite changes to the programme being justified as ways to reduce surplus and waste, neither of these had been managed effectively. It said the report showed that surplus increased to 17 percent in 2026, despite a contractual limit of 10 percent, and waste, measured in Term 3, 2025, was higher for the new delivery model, rather than internal and iwi models.

The Coalition's chair, Professor Boyd Swinburn, said that the Associate Education Minister David Seymour talked about cost savings, but not cost-effectiveness.

"Seymour did not talk about the 'effectiveness' side of the equation - effectiveness for reducing food insecurity, improving learning and quality of life," he said.

"The current programme has provided only 13 to 17 percent of child's energy needs for the day and that should be about 25 percent. The previous version provided 20 to 25 percent of a child's energy needs, so was much closer and had good nutritional qualities."

"We have got to go for version three. We've had version one - it was generously funded and had good outcomes. We have a low-cost version now. It has saved money but has problems that have been highlighted by the auditor-general. Let's get a version three that works for taxpayers, kids and meets nutritional standards."