Future options of the school milk subsidy scheme: summary impact assessment

The School Milk Subsidy Scheme (SMSS) has been in operation since 1977. The £3 million demand-led SMSS has historically been administered by the Rural Payments Agency (RPA) on behalf of the Welsh Ministers. The current SMSS provides free milk to learners in Reception to Year 2 and subsidised milk to learners in year 3 to 6.

While learner uptake data is not routinely collected through the RPA claims process, trends can be inferred from claim volumes. Additional uptake data is available through the Pupil Level Annual School Census (PLASC). It is possible, therefore, to estimate the number of milk servings provided per year. PLASC data shows that 81,374 pupils were receiving milk on census day in 2024 to 2025. This figure represents approximately 30.44% of the 267,346 pupils eligible for the SMSS in Wales.

Due to the delivery arrangements from the current scheme coming to an end, alongside the established provision of Universal Primary Free School Meals (UPFSM), means tested Free School Meals (eFSM), Primary Breakfast provision, and the introduction of the Healthy Eating in Schools (Nutritional Standards and Requirements) (Maintained Primary Schools) (Wales) Regulations 2025, it is appropriate to review the future policy approach to milk provision in schools.

The Welsh Government is considering either:

• (Option 1): replacing the current assimilated law SMSS implemented through a joint Wales, England and Northern Ireland strategy and administered by the RPA, with a grant-funded model delivered through the Local Authority Education Grant (LAEG) from April 2027, or
• (Option 2): Discontinuing the dedicated milk scheme, while recognising that milk would remain available through school breakfast and lunch provision for participating learners.

Milk provision should be considered within the wider school food policy landscape. Together, UPFSM, eFSM school breakfast provision and the Healthy Eating Regulations provide a comprehensive framework to support access to nutritious foods and drink during the school day. Schools play an important role in promoting healthy eating behaviours and encouraging the consumption of nutritious food and drinks, including milk and dairy products, through a whole-school approach to food. School food provision contributes to learner health and wellbeing, supports the development of healthy dietary habits, and helps maximise participation in nutritious food programmes.

The review provides an opportunity to consider the role of milk provision alongside wider school food policy objectives, including improving children's diets, supporting health and wellbeing, promoting healthy eating behaviours and ensuring a coherent approach to food provision in maintained schools.

Long-term

The school food landscape in Wales has changed significantly since the SMSS was introduced in 1977. Learners now benefit from a broader package of school food support, including UPFSM, eFSM, Free Primary Breakfast provision, and the introduction of the Healthy Eating in Schools (Nutritional Standards and Requirements) (Maintained Primary Schools) (Wales) Regulations 2025.

Together, these measures support access to nutritious food and drink during the school day and contribute to wider objectives relating to health, wellbeing, educational attainment and reducing inequalities.

As part of this wider school food offer, milk remains available through breakfast and lunch provision, delivered in accordance with school food standards. Consequently, access to free milk is no longer solely dependent on a dedicated school milk scheme.

The key distinction between the two options is therefore not whether milk remains available in schools, but whether a dedicated mechanism is required to support and promote its consumption in the longer term. Option 1 provides a dedicated and consistent route to milk provision alongside existing school food programmes. Option 2 relies on access through the wider school food offer. While milk would continue to be available under Option 2, the impacts are subject to the evidence limitations set out in the Key Evidence Gaps section.

Prevention

Schools provide a relatively protected food environment and offer an important setting for promoting healthy eating behaviours and reducing food and nutrition-related inequalities through equitable access to healthier food and drink options.

The SMSS aims to play a preventative role in addressing some health and social challenges and shifts focus on early intervention and reducing future demand on public services:

• By supporting healthy diets early in life, it contributes to preventing long-term health inequalities and associated costs. 
• Wider benefits (improved behaviour, attainment, and wellbeing) help prevent educational disengagement and poorer life outcomes.
• Stakeholders indicated that administrative complexity acts as a barrier to participation. Simplification may therefore support increased participation, although the extent of any increase is uncertain.

As described in the long-term section, Milk may remain available through breakfast and lunch provision, but access and uptake would depend on learners participating in those services. 

UPFSM, breakfast and eFSM provision support child health by ensuring all primary-aged children have access to a nutritious school meal and drinks that meet the Regulations, helping to promote healthy eating habits and activities and supporting wellbeing, behaviour and readiness to learn. As a universal entitlement, UPFSM also helps reduce inequalities by removing financial barriers to accessing a healthy meal, reducing stigma associated with means-tested provision, and easing cost-of-living pressures on families.

Integration

Option 1 demonstrates strong integration across policy objectives:

• It aligns with the Well-being of Future Generations (Wales) Act goals, particularly a healthier, more equal Wales. 
• Integration with UPFSM and school breakfast provision creates a more coherent and consistent school food offer. 
• It contributes to multiple objectives simultaneously, including: 
  • health and nutrition
  • educational attainment
  • reducing socio-economic inequalities
  • supporting the Welsh dairy sector

The proposal also supports cross-government priorities which ensures the policy does not operate in isolation but contributes to joined-up delivery across education, health, agriculture and social policy.

Option 2, the discontinuation of the scheme could affect several wider Welsh Government objectives, including:

• Reducing child poverty and food insecurity.
• Supporting healthier eating behaviours among children.
• Improving educational attainment and learner wellbeing.
• Tackling health inequalities through preventative interventions.
• Supporting Welsh agriculture, food production and rural communities.
• Delivering an integrated package of school food support through schools.

While discontinuing the SMSS would not remove access to milk entirely, as Milk may remain available through breakfast and lunch provision, access and uptake would depend on learners participating in those services as outlined in the evidence gaps section.

This could have consequential impacts across a range of well-being goals, Welsh Government objectives and the objectives of partner public bodies, particularly in relation to health, equality, child poverty and support for rural economies.

Collaboration

Collaboration has been integral to the development of both options. The current scheme relies on a range of delivery partners, including schools, local authorities, suppliers and the RPA.

To inform Option 1, Welsh Government officials worked closely with the RPA, local authorities and suppliers to understand existing delivery arrangements, identify barriers to participation and develop a sustainable replacement model.

Transitioning delivery through the LAEG would further strengthen collaboration by aligning the scheme with existing local authority school food arrangements. Ongoing engagement, monitoring and review would support continuous improvement and shared responsibility for delivery across Wales.

If Option 2 were pursued, continued collaboration would be required to understand and manage potential impacts. This would include working with:

• Local authorities and school catering services to understand implications for school food provision and opportunities to promote milk through existing programmes.
• Schools and governing bodies to assess potential impacts on learner access and uptake.
• Dairy suppliers and representative organisations to understand implications for the dairy supply chain and rural economies.
• Public Health Wales and health professionals to consider impacts on nutrition, health inequalities and healthy eating objectives.
• Children and young people, where appropriate, to understand learner experiences and views on accessing milk through alternative school food provision.

Involvement

Stakeholder involvement has played an important role in shaping the proposal. Engagement with the majority of local authorities informed consideration of future delivery arrangements and highlighted the administrative challenges associated with the current scheme. Their feedback directly influenced the development of Option 1 and the decision to adopt a demand-led grant model through the LAEG.

Stakeholder involvement will continue throughout implementation of Option 1 to monitor participation, identify barriers and support continuous improvement.

Should Option 2 be considered further, additional stakeholder engagement via a planned consultation will be required before any final decision is taken. This would include:

• Engagement with all local authorities to understand local delivery implications.
• Consultation with schools, suppliers and representative bodies on operational, financial and educational impacts.
• Consideration of the views of learners and parents, particularly those who may rely more heavily on school-based food provision.
• Engagement with rural and agricultural stakeholders to understand potential impacts on Welsh dairy businesses and local supply chains.
• Ongoing involvement of Public Health Wales and equality stakeholders to assess potential effects on disadvantaged learners and health inequalities.

Option 1 supports sustainable development by maintaining existing access to free and subsidised milk for eligible learners through a new delivery model. Milk can contribute to children's nutrition and wider health outcomes as part of a balanced diet. By maintaining a dedicated route to provision, the option is likely to contribute positively to the well-being goals of a Healthier Wales and a More Equal Wales, particularly for learners who may benefit from consistent access to school-based food provision.

The option also supports a Prosperous Wales by maintaining demand within the Welsh dairy supply chain, including rural producers, processors and suppliers. Delivering the scheme through the LAEG aligns it more closely with wider school food programmes, supporting a more integrated and sustainable approach to delivery.

As part of the development of the new Welsh scheme, Welsh Government is also considering whether eligibility should be restricted to maintained schools and special schools, aligning with wider Welsh Government school food policies. Independent schools are eligible under the current SMSS and consultation responses will inform any final decision on future eligibility. Only one independent school is currently known to claim under the scheme.

Option 2 could support sustainable development through administrative simplification and reduced delivery costs. Learners would continue to have opportunities to access milk through the wider school food offer, including school breakfasts and lunches provided in line with the Healthy Eating Regulations.

The assessment is subject to the evidence limitations described in the Key Evidence Gaps section. As a result, Option 2 may make a weaker contribution to the well-being goals of a Healthier Wales and a More Equal Wales than Option 1. It may also result in reduced demand for milk supplied to schools, with potential adverse effects on parts of the Welsh dairy sector and rural economies, resulting in a weaker contribution to a Prosperous Wales.

Well-being goal: A Prosperous Wales

Option 1: new school milk scheme via LAEG

Maintains demand for Welsh dairy products and supports dairy producers, processors and suppliers, including rural businesses.

Option 2: discontinue SMSS

Potential reduction in school milk demand could negatively affect some suppliers and rural economies.

Option 2 also allows Welsh Government to redirect approximately £3m annually to alternative educational, health or anti-poverty priorities. The relative benefits of any such reallocation would depend on future Ministerial decisions and are therefore not assessed in this IIA.

Potential for more efficient use of public resources.

Opportunities

Option 1 provides opportunities for local authorities to align procurement with wider school food purchasing and support local supply chains.

Well-being goal: A Resilient Wales

Option 1: new school milk scheme via LAEG

Largely neutral impact, although continued support for Welsh food production contributes indirectly to resilient local supply chains.

Option 2: discontinue SMSS

Potential reduction in demand for Welsh dairy products may have a small adverse impact on supply chain resilience.

Opportunities

Opportunities to encourage sustainable and local procurement through existing school food arrangements.

Well-being goal: A Healthier Wales

Option 1: new school milk scheme via LAEG

Positive impact through continued access to milk, supporting nutrition, healthy growth, wellbeing, concentration and readiness to learn. The scheme may also contribute to wider wellbeing and educational objectives by supporting access to nutritious food and drink within the school environment.

Option 2: discontinue SMSS

Risk of reduced milk consumption among some learners, particularly those not accessing breakfast clubs or school meals.

Continued access through UPFSM and breakfast provision.

Opportunities

Greater integration with UPFSM and breakfast provision could strengthen the overall school food offer and healthy eating messages.

Well-being goal: A More Equal Wales

Option 1: new school milk scheme via LAEG

Positive impact by maintaining access to free and subsidised milk and supporting disadvantaged learners.

Option 2: discontinue SMSS

Risk of increased variation in access and uptake between schools and learner groups, particularly affecting lower-income households.

Opportunities

Further targeting of support through wider school food programmes could help reduce inequalities.

Well-being goal: A Wales of Cohesive Communities

Option 1: new school milk scheme via LAEG

Supports consistent access to school food provision and shared experiences across Wales.

Option 2: discontinue SMSS

Potential variation in local provision could lead to different learner experiences between communities. 

Simplified and integrated school food offer.

Opportunities

Collaboration with schools and local authorities could help maintain consistency and community engagement.

Well-being goal: A Wales of Vibrant Culture and Thriving Welsh Language

Option 1: new school milk scheme via LAEG

Neutral to minor positive impact through continued shared school experiences and participation in Welsh-medium settings.

Option 2: discontinue SMSS

Largely neutral impact as access to milk does not directly affect Welsh language use.

Opportunities

Existing school food programmes can continue to support Welsh-language environments and local food culture.

Well-being goal: A Globally Responsible Wales

Option 1: new school milk scheme via LAEG

Supports sustainable public food provision and continued use of established food supply chains.

Option 2: discontinue SMSS

Neutral overall, although reduced demand for dairy products may have indirect implications for local food production and procurement. 

Reduced administrative processes and duplication.

Opportunities

Opportunity to strengthen local and sustainable procurement approaches through school food contracts and wider food policy objectives.

A range of evidence has informed consideration of both options, including:

• Stakeholder engagement with local authorities, schools, suppliers and the Rural Payments Agency (RPA), which identified administrative and delivery challenges associated with the current claims-based model.
• Nutritional and health evidence summarised in the Health Impact Assessment.
• Existing school food policy and legislative frameworks, including UPFSM, school breakfast provision and the Healthy Eating Regulations.
• The EqIA, CRIA, HIA, Rural Proofing Assessment undertaken as part of this IIA.
• Consideration of the Well-being of Future Generations (Wales) Act 2015, particularly the goals of a Healthier Wales, a More Equal Wales and a Prosperous Wales.

The evidence base will continue to inform implementation and future decision-making through ongoing stakeholder engagement, monitoring of participation and delivery, and evaluation of impacts on learners, equality groups and rural communities.

Risks, assumptions and uncertainties

Option 1: new SMSS via LAEG

• Assumes local authorities will participate in and deliver the scheme effectively.
• Assumes alignment with existing LAEG processes will reduce administrative burden.
• There is uncertainty regarding future uptake and consistency of delivery across Wales.
• Limited data is available to assess impacts on specific protected groups.
• Under this option, eligibility for the scheme would no longer extend to independent schools.

Option 2: discontinue SMSS

• Assumes learners will continue to have the opportunity to access milk through wider school food provision.
• Assumes schools will continue to promote and provide access to milk through existing school food provision, including and suitable dairy alternatives as required.
• There is uncertainty regarding future milk consumption if the dedicated scheme ceases.
• Evidence on the impact of reduced visibility and availability of milk on learner behaviour and outcomes is limited.

Key evidence gaps

Welsh Government does not currently hold evidence that would allow it to determine whether learners who access milk through the SMSS would consume equivalent quantities through alternative school food provision should the SMSS cease. Consequently, the likely effect of Option 2 on milk consumption, nutritional intake and associated outcomes cannot currently be quantified with certainty.

Several other evidence gaps limit the certainty of the assessment:

• No direct learner engagement has been undertaken on Option 1, as it relates primarily to a change in delivery mechanism rather than entitlement.
• Welsh Government does not hold detailed uptake data by protected characteristic.
• Limited evidence is available on the specific impacts of either option on learners with ALN.
• The potential impact on the Welsh dairy sector has not been quantified. The School Milk Scheme represents a specific market for milk supplied to participating schools, however, available published data do not enable the volume supplied through the scheme in Wales to be expressed reliably as a proportion of the wider Welsh dairy market. The overall sector-level impact is therefore uncertain. There may nevertheless be more concentrated impacts for individual Welsh suppliers or producers where they currently supply milk through the scheme. The consultation will provide an opportunity for the dairy sector and suppliers to provide evidence on the potential scale and distribution of these impacts.

These gaps will be addressed, where possible, through ongoing stakeholder engagement, monitoring and future evaluation.

Option 1 would maintain existing milk entitlements through a new LAEG-funded delivery model. Its effects are expected to be broadly neutral, with potential benefits from simpler administration and closer integration with wider school food provision. Option 2 would remove the dedicated scheme. Although milk may remain available through breakfast and lunch provision, as outlined in the Key Evidence Gaps section. 

Option 2 therefore carries greater, though presently unquantified, risks for disadvantaged learners and parts of the Welsh dairy supply chain.