Free pre-school milk scheme ruled unlawful

Part of a Scottish government scheme to provide a healthy snack and milk to pre-school children has been declared "unlawful and irrational" by a judge.

The scheme gives children who attend nursery or a childminder a third of a pint of milk and a snack such as fruit every day.

It replaced a similar UK-wide scheme in August of last year.

But there have been complaints that it has resulted in many childcare providers being left out of pocket.

The previous Nursery Milk Scheme saw the actual costs of providing the milk to children being reimbursed.

The new scheme is wider than the previous one, in that it also provides for a non-dairy alternative to milk to be provided if necessary for health, ethical or religious reasons, and for the provision of a healthy snack - neither of which was previously provided.

But funding is now provided by periodical payments made in advance to councils based upon a weighted average, known as a local serving rate (LSR), which is set by the Scottish government for each local authority.

The School and Nursery Alliance - which represents dairy, health and education providers who are involved in the scheme - has now brought a successful judicial review against it.

It was concerned that the LSRs were set at too low a level, and that the new initiative had unintentionally left many nurseries and childminders out of pocket.

It said this was potentially causing children to miss out on their free milk entitlement - the exact opposite of its intentions - particularly in relatively small, rural childcare settings which tended to face higher costs for delivered milk.

The alliance also argued that there were failures in the consultation exercise undertaken by the Scottish government and irrationality in calculating the LSRs.

Some childcare providers said they could no longer afford to buy from local milk suppliers and had to use supermarkets instead

It said it was not told of the proposal to base payments on LSRs or its rates until it was too late for it to make meaningful representations during the consultation process.

The Scottish government insisted that there was a full consultation exercise on the principles of the scheme, including being taken over by local authorities.

In his written judgement, Lord Braid said: "A number of settings have complained to the petitioner that the cost of acquiring milk from agents is no longer covered, and that they are faced with a choice between covering the shortfall themselves, or purchasing from other suppliers such as supermarkets, diverting staff resources to carrying out that task.

"The petitioner asserts that the scheme has had the opposite effect from that intended, in that it reduces the incentive to buy from local suppliers."

Lord Braid said he had decided that the consultation process, at least over the way the LSRs developed, was unfair and that the legal challenge to the regulations and guidance over a lack of proper consultation must succeed.

He concluded: "I have decided that the new scheme is unlawful in that the respondent did not undertake a proper consultation on a key aspect of it, the LSRs, and the fixing of the LSRs was irrational".

A further hearing has been fixed for the court to decide what orders to make in light of the decision.

'Significant loss of business'

Responding to the ruling, School and Nursery Milk Alliance chairman John Thomes said he hoped it would lead to as many children as possible enjoying their free milk and snack in the future.

He added: "The scheme's intentions were excellent, and it can still be a great success, but we know that many settings including smaller, rural and/or privately-owned settings are currently unable to obtain their milk in a way that suits their needs, and many are also faced with additional cost and administrative burdens.

"We also know that the new scheme has resulted in significant loss of business for small local suppliers of Scottish milk, as many settings have been obliged to use supermarket chains or large LA-contracted suppliers.

"We trust that the court's ruling will now result in an improved scheme for all settings."

The Scottish government - which is committed to providing free morning milk to all primary school children from August of next year - said it was "reflecting on the court's judgment".

A spokesman added: "We remain committed to ensuring eligible pre-school children receive a free portion of milk and healthy snack to embed healthy eating habits from an early age."