Key Takeaways
- The Auditor‑General found the coalition’s school‑lunch programme saves money compared with Labour’s approach, but its performance is not being properly monitored or tracked.
- Procurement and planning were marred by inconsistent messaging, last‑minute scope changes, and inadequate contingency planning, creating fairness concerns for suppliers.
- The $3‑per‑meal price tag was set without market testing and later expanded to cover all costs, despite warnings it might not meet nutritional needs.
- Food‑safety complaints spiked early in the programme, with 51 incidents logged in February alone, and resolution times varied from one day to over eight months.
- Surplus (unopened, uneaten meals) remains a problem, averaging 10.4 % in 2025 and rising to 17 % by 2026, exceeding contracted limits.
- Nutrition compliance was low, with only about 50 % of meals meeting standards in 2025, improving later in the year; discrepancies arose from different measurement methods.
- The Ministry has responded by adjusting meal orders to attendance, improving menu variety, and developing surplus‑action plans, but gaps in independent verification and waste‑management targets persist.
Auditor‑General Raises Alarm Over School‑Lunch Programme
The Auditor‑General’s final report, tabled in Parliament on Tuesday, warns that the coalition’s school‑lunch scheme cannot clearly demonstrate it is delivering its intended aims. While the programme is shown to be saving money relative to the previous Labour‑led model, the Auditor‑General stresses that performance monitoring and tracking are insufficient. The investigation, launched last year after media and public concerns about food quality, timeliness, appropriateness, cost‑setting, and provider selection, concludes that the government has not put in place robust mechanisms to measure, manage, and monitor key aspects of the service.
Procurement and Planning Shortcomings
The report identifies multiple flaws in how the programme was procured and planned. About 125 existing suppliers had their contracts not renewed at short notice, even though some had been led to expect continuation, cutting their average revenue by roughly 48 %. The Auditor‑General criticises the Ministry’s inconsistent messaging and abrupt notice as poor supplier‑management practice. Moreover, the $3‑per‑meal price tag was adopted despite official warnings that it might not satisfy nutritional requirements and could add operational complexity for schools serving multiple age groups. Officials had not tested the $3 figure with the market or performed a thorough cost analysis; the initial “high‑level estimate” covering only food was later expanded to become a policy benchmark covering all costs.
Contractual Changes and the School Lunch Collective
After issuing a tender, the Ministry altered the scope to require hot lunches while keeping the price at $3 per meal, despite suppliers and schools signalling that this may be unattainable. Preliminary discussions were not held with all 20 shortlisted suppliers, and the scope was widened to include area, composite, and full primary schools—categories that had previously been excluded. A two‑year contract worth $85 million per year was signed in October 2024 with the School Lunch Collective, which comprises Compass and Libelle. Shortly after signing, the collective received an additional $18 million to meet nutrition standards for Year 9 students and above, just over $1 million for food‑waste and rubbish collection, and schools were given a further $3 million to offset internal distribution costs. The changes to scope and cost occurred repeatedly—during market engagement, contract negotiations, and after the contract was signed—raising fairness concerns for suppliers who withdrew because they could not meet the evolving requirements at the signalled price.
Libelle’s Liquidation and Financial Risk Exposure
Libelle entered liquidation in March, owing more than $14 million to hundreds of creditors. Although the Ministry was aware of Libelle’s past performance issues and had concerns about its financial stability under the previous model, it relied on Compass’s assurance of Libelle’s production capacity and contracted with Compass as the lead contractor to mitigate risk. The Auditor‑General notes that contingency planning was inadequate for a programme of this size and scale, particularly given the previous performance of key suppliers, and that the model was implemented before officials had finalised contingency plans.
Cost Savings Claimed by the Minister
Associate Education Minister David Seymour defended the programme, asserting that by making it more efficient he has saved taxpayers $360 million and counting. He criticised the Auditor‑General’s report as favouring “process over outcomes” and claimed it was driven by former suppliers and disgruntled Ministry employees. Seymour argued that the Auditor‑General would be satisfied only if the government spent another $360 million to achieve the same outcome, provided it followed his preferred process. He acknowledged teething issues at the programme’s start but said they have been addressed and that constant management is inherent in any contract delivering a quarter of a million meals to a thousand schools.
Monitoring Gaps and Unmet Targets
Despite Seymour’s stated intention to improve data on waste and surplus, the Auditor‑General found that the programme lacks sufficiently robust mechanisms to measure, manage, and monitor important performance aspects. The 2025 costs were about $130 million lower than under the previous model, yet the report shows that key goals are not being met. The number of unopened, uneaten meals—or surplus—exceeded the maximum contracted for, with surplus rates rising. For the 2025 school year the average surplus was 10.39 %, similar to the prior model, but by 2026 it had increased to 17 %. Thirty‑six schools consistently recorded surplus rates above 20 % until August 2025, prompting the School Lunch Collective to develop surplus‑action plans for 160 schools. These plans involve adjusting meal numbers based on attendance, sharing information with schools, and altering lunch service times and tuck‑shop hours. Crucially, information on lunches delivered in full and on time was not independently or formally verified; while a weekly average target of 97 % was met from term 2, meal production often fell below 50 % of the required numbers in term 1.
Food‑Safety Incidents and Complaint Resolution
Early in the revamped programme, multiple food‑safety concerns emerged, including mislabelled dietary meals, melted plastic, broken seals, bits of glass, and overheated meals that burnt students. In February alone, 51 complaints were logged. Some issues were resolved within a day, while one case took 260 days to close. The Ministry attributed the surge in incidents to “significant structural and staffing changes” within the School Lunch Collective and the impact of school holidays on resolution timelines. The Auditor‑General noted that these figures represent an unprecedented increase in incidents, underscoring weaknesses in the programme’s safety oversight.
Surplus, Waste Management, and Environmental Concerns
Although the collective was required to have a waste‑management plan, the report found no contractual target for waste reduction. The existing plan sends all packaging to landfill, except in Auckland, Waikato, and the Bay of Plenty, where only trays are recycled. No systematic measure of food waste was in place in early 2025; waste was only measured once, over a 10‑day period in term 3 of 2025. The lack of ongoing waste tracking limits the ability to assess environmental impact and to identify opportunities for improvement.
Nutrition Standards Compliance
Nutrition compliance proved to be a significant shortfall. Across 2025, only 50.5 % of meals met the required nutrition standards, although performance improved in terms 3 and 4 (69 % and 75 % respectively). The Ministry and the School Lunch Collective used different methods to assess compliance: the collective’s assessments were based on the ingredients list for meals, while the Ministry’s measurements considered factors such as whether meals were assessed on delivery day and the availability of Ministry staff. This discrepancy contributed to the reported gap between the two sets of findings.
Ministry Responses and Ongoing Adjustments
In reaction to the draft report, the Ministry has implemented several changes. It is working with schools to align meal orders more closely with actual attendance, which has helped reduce surplus slowly over the past few weeks. Further adjustments are underway to improve menu variety, quality, and responsiveness to school feedback. The Ministry also plans to develop more robust data‑collection systems for waste and surplus, aiming to meet Seymour’s earlier pledge that ineffective measurement of these factors is unacceptable when funds could be redirected elsewhere. Despite these steps, the Auditor‑General’s final report concludes that substantial gaps remain in monitoring, accountability, and the ability to demonstrate that the programme is achieving its nutritional, financial, and operational objectives.