Find out how to apply for approval under the scheme, how to claim for the subsidy, how much you can claim and what records you need to keep.
Applies to England, Scotland and Wales
This guidance is for milk consumed from 1 January 2021. The guidance for milk consumed before 1 January 2021 has been archived.
The school milk subsidy scheme subsidises the cost of milk, certain milk products and yoghurts for schoolchildren in England, Scotland and Wales. This means schools can sell the products to children at a lower price. Schools must offer drinking milk before they can supply other eligible milk products or yoghurts.
The Rural Payments Agency (RPA) runs the scheme in England, Scotland and Wales.
School Milk Subsidy Team
Rural Payments Agency
Newcastle Business Park
Newcastle upon Tyne
Telephone: 03300 416 500
Find about call charges
Who can apply for the school milk subsidy
You can apply for school milk subsidies if you are a:
- local authority
- organisation set up for this purpose
To claim for the subsidy you must meet the rules, in particular the maximum selling price rules.
What products can be subsidised
The following products from cows, goats and sheep are eligible for the subsidy:
- whole or semi-skimmed heat-treated milk
- whole or semi-skimmed heat-treated flavoured milk, containing at least 90% by weight of milk and a maximum of 7% added sugar or honey (only the milk element is eligible for the subsidy)
- whole or semi-skimmed plain yoghurt
- lactose free or lactose reduced milk
- UHT milk
Products must also be of EU origin and comply with Regulation EUR 2004/852 and Regulation EUR 2004/853. These include the rules on preparing the products in an approved establishment and the identification markings the products must have.
Subsidised products must be distributed to pupils as a:
- mid-morning or afternoon drink
- a drink with a meal
- a separately identifiable part of a meal (so the milk must retain its identity and not be altered or incorporated as an ingredient)
What products are not eligible
You cannot apply for a subsidy for:
- products used as ingredients in the preparation of meals
- milk other than from cows, goats or sheep (for example, soya or rice milk)
- powdered or reconstituted milk
- products used as ingredients in the preparation of meals where milk has lost its identity (for example, custard, mashed potato or rice pudding)
- products that have been consumed by staff or visitors
- products that have been delivered but disposed of (rather than consumed by eligible pupils)
- products that have been consumed on non-educational days (for example, Sundays for boarding school pupils)
- products containing more than of 5mg of added fluorine per kg (if added as sodium fluoride this equates to 11mg of sodium fluoride per kg)
Who is eligible for the subsidised products
In England, Scotland and Wales, pupils are eligible if they regularly attend an Ofsted-registered:
- primary school
- secondary school
All pre-school children who are under 5 years old and in day care are eligible for free milk under the Nursery Milk Scheme.
Pupils under 5 years old (‘rising fives’) in primary education reception classes are eligible under either the School Milk Subsidy Scheme or the Nursery Milk Scheme but not both.
In Wales, pupils in Key Stage 1 are also eligible for free milk funded by the Welsh Government.
Who is not eligible
The school milk subsidy scheme does not cover:
- children in pre-schools where the milk has been fully reimbursed under the Nursery Milk Scheme
- pupils in further education colleges
- pupils in higher education colleges or universities
- pupils in holiday camps
- boarding pupils on days when they’re not receiving formal education
Advertise subsidised milk in schools
Schools distributing products subsidised under the school milk subsidy scheme must display a poster advertising that they’re participating in the scheme.
The poster must be clearly visible and readable and permanently situated at the main entrance of the school.
You can design your own poster, but it must comply with the requirements in Article 12 of Regulation EUR 40/2017 .
Or, you can download and use one of the following posters which must be A3 or bigger and the lettering at least 1cm high.
Apply for approval to claim for the school milk subsidy
Before you can claim for the subsidy, you’ll need to register as a ‘trader’ with RPA and get a trader number, if you have not got one already. Call RPA on 03000 200 301 to do this.
You can apply to RPA for approval to claim the school milk subsidy by completing and returning the application for approval to claim school milk subsidy (SCM/1) form.
You can apply for approval before you get your trader number from RPA. But RPA cannot approve your application until you give your trader number to the school milk subsidy team.
The application for approval must be signed by a senior manager. This senior manager will be responsible for the claims, along with the people authorised to sign the claims.
Information you must supply as part of your application for approval
You should send the following details to RPA on the claim dates and authorised signatories for 2023 to 2024 form – and include it with your application for approval to claim the subsidy:
- details of your claim periods (see ‘When to claim for the school milk subsidy’ section)
- sample signatures of the members of your organisation who are authorised to make claims
- your pricing calculation to show you are passing on the subsidy (as explained on the form)
- confirmation that you understand if any of your contracts are for €750,000 or above, your procurement procedure must meet the requirements of Article 6 of Regulation 2017/40 and the current directive
Also send a full list of the names and addresses of all the schools and the number of pupils you’re claiming subsidy for on the school milk template which you can request by contacting firstname.lastname@example.org.
RPA cannot give you approval to claim until you give them all the information above. They’ll write to you if any of the information is missing.
It is your responsibility when claiming for the subsidy to make sure that you and the schools you’re claiming subsidy for understand the scheme and what they have to do to meet the rules.
RPA may suspend or withdraw your approval to claim for the school milk subsidy if the scheme rules are broken.
Calculate your school milk subsidy
Eligible pupils may receive up to 250ml of subsidised milk products each school day. Therefore, the maximum volume of milk you can claim is 250ml per pupil per day. Claims must be based on the actual milk you distribute.
To work out your maximum entitlement, you should follow these steps.
1. Take the number of school days when curricular education takes place. 2. Multiply this by the number of pupils on the school roll. 3. Multiply again by 0.00025 (this is the maximum daily allowance of 250ml in kilolitres). 4. Round to 3 decimal places.
For example, 29 school days × 763 pupils × 0.00025 = 5.532 kilolitres.
You can simplify the number of pupils on the school roll by using the number of pupils in the most recent ‘school census’. You can only use the census details for claim periods that fall within the same school year as the census was taken. Do not include pupils under 5 years old who are being claimed for under the Nursery Milk Scheme.
- only claim for quantities that were actually distributed to eligible pupils during the claim period
- not claim for more than the maximum entitlement for that claim period
If you’re claiming for more than one school, you must make sure that you do not claim for more than the maximum entitlement for any school, even if your total claim is not more than the overall maximum entitlement.
RPA uses the percentage of added sugar you declare on your claim to calculate the volume of milk eligible for subsidy. This will reduce your payment for flavoured milk.
RPA publishes the Milk (Whole/Semi) Subsidy Rates before the beginning of the school year. You can use them to calculate the amount of subsidy you could receive.
Subsidy rates for August 2023 to July 2024
The table below shows the 2023 to 2024 subsidy rates for whole and semi-skimmed milk for primary and secondary education.
|Subsidy per litre (pence)||22.6800||18.6945|
|Subsidy per pint (pence)||12.8882||10.6234|
|Subsidy per 250ml (pence)||5.6700||4.6736|
|Subsidy per 200ml (pence)||4.5360||3.7389|
|Subsidy per 1/3 pint (pence)||4.2961||3.5411|
|Subsidy per 189ml (pence)||4.2865||3.5333|
The basic rate for subsidy in England, Scotland and Wales is £186.945 per kilolitre for milk and yoghurt.
The basic rate for subsidy is topped up to £226.800 for pupils receiving primary education.
How to use the school milk subsidy
If a school provides pupils with free milk products, the subsidy is considered to have been passed on to the pupils.
If a school charges pupils for milk products, the subsidy must be used to reduce:
- the cost of the products
- any fees which include the cost of the products
- the cost of any set price meal that includes the cost of the products
Any price reductions made to pupils because of the subsidy should be clearly shown on school fee bills or receipts or mentioned in school literature.
In all these cases, you must have evidence that demonstrates how selling prices are worked out.
All the prices charged must also meet with the maximum selling price rules.
Maximum selling price rules
You must make sure that no more than 8 pence per portion (including administrative costs) is charged above the cost of the milk product, after the price has been reduced by the amount of subsidy received.
Calculate the maximum selling price by following these steps.
1. Take the purchase price paid to the supplier, including any discounts but excluding any delivery charges. 2. Minus the subsidy. 3. Plus no more than 8 pence per portion administration and distribution charge to cover the costs of operating the scheme. 4. Equals price charged to pupil.
The purchase price you use to calculate your selling price must not include any administrative costs, delivery charges or other incidentals.
If you buy supplies at different prices over the period you’re claiming for, you can use an average price in your calculation. Just divide the total cost of the supply by the total volume.
When you’ve calculated your selling price you can use it for a term or for a whole school year.
If you’ve used your selling price calculation for the whole school year, you may later find it needs to be updated because, for example, there was a change to the purchase price of the milk. The following term, you can change to calculating the selling price each term and adjust it to rectify any loss or profit you’ve made previously.
Products will not be eligible for the subsidy if the price is more than the maximum selling price or if the administrative and distribution charges cannot be justified.
What costs you can claim for
England, Scotland and Wales
- provide proof of any administrative costs and distribution charges made to the pupil (proof of administrative costs more than 3 pence but not more than 8 pence per portion must be provided at the beginning of the school year)
- show that these costs are not more than the markup on similar products, for example on a glass of fruit juice, squash, or carbonated (fizzy) drink if you sell any
Some costs may be paid centrally by the school or local authority claiming. Others may be paid from a maintained school’s delegated budget. In these cases, you’ll need to agree locally how the costs will be shared and be able to show this in your records.
You can claim for time spent by school and local authority staff to:
- distribute milk
- deal with suppliers
- compile claims
- pay supplier invoices
- maintain records to support claims
- check claims
- supervise pupils while they consume milk
- stock milk
- remove refuse
- clean refrigerators
Other examples of administrative and distribution costs you can claim for include:
- refrigeration costs, such as purchase, leasing, maintenance and running costs (including electricity)
- administrative costs to promote the scheme, including paper, envelopes, postage, telephone costs and printing
- cleaning materials, like washing up liquid
- beakers, cups and straws
- refuse disposal costs, including extra waste containers and waste collection
- storage of invoices and other records for the required 3-year minimum, or transfer of records to microfiche or electronic formats
In Wales, for pupils in Key Stage 1 you can claim for the full cost of milk, plus a contribution to administrative costs. To claim these costs, you need to send proof to RPA at the start of each school year that the costs are at least 3 pence per portion. If you claim for these costs you’ll be paid at a rate of £158.378 per kilolitre for Key Stage 1 milk.
You do not have to claim for administrative costs, but if you choose to claim for them you can only include them in the claim they relate to.
Templates to help you work out your administrative costs are available by calling RPA on 0330 041 6500.
To claim for the full cost of an expensive item (for example, a refrigerator), you should spread the cost over several claims. There is no limit to the number of claims you can spread the cost over throughout a year, but you must be able to show that the cost is equivalent to more than 3 pence per portion.
If you are claiming for pupils in Wales in Key Stage 1 as well as pupils not in Key Stage 1 you’ll need to submit 2 separate claims for each claim period to cover:
- pupils eligible for free school milk (Key Stage 1)
- other pupils eligible for the subsidy
For pupils in Wales, RPA will pay the subsidy and:
- up to the full cost of the milk and milk products (as well as any eligible administrative costs you claim) for pupils in Key Stage 1
- the national top up payment for pupils in Key Stage 2
How to claim the school milk subsidy
You can claim the school milk subsidy after you’ve been approved by RPA and you’ve supplied the information needed.
Claim the subsidy using the school milk subsidy claim form (SCM/5). You’ll need to use kilolitres when filling in your claim.
You must make sure your claim is accurate.
To complete the form open it in a PDF reader, such as Acrobat Reader, then download and save the form to your computer.
How to claim for more than one school
If you’re claiming the subsidy for more than one school, you’ll need to attach an annex to the claim giving information about all the schools in that claim.
You can use the RPA school milk claims spreadsheet as the annex. If you use your own spreadsheet it must be in the same format and include the same information as the RPA school milk claims spreadsheet. You can request a copy by contacting email@example.com.
If you’re claiming for both primary and secondary schools, you’ll need to submit 2 separate annexes:
- one for pupils receiving primary education
- one for pupils receiving secondary education
Where a school has both primary and secondary pupils, you must only include the information for each in the relevant annex.
Pupils receiving primary education in both special or secondary schools can be included in your annex for primary schools so they can benefit from national top up funding.
When to claim for the school milk subsidy
Claims must be made after you’ve been approved by RPA and after each of your claim periods. Claim periods can be:
- school terms
- school terms rounded to whole months
- the same periods as claims for milk under the nursery milk scheme
- calendar months
RPA will contact you at the beginning of each school year for details about your claim periods. You must provide this information by 31 October that year and before you claim.
RPA must receive your claim by the end of the third month after the end of the claim period.
For example, if the claim period ends in March the deadline for the RPA to receive your claim is 30 June.
If the deadline falls on a public holiday or weekend, it’s extended to the next working day.
If RPA receives your claim after the deadline (known as a late claim), it will be reduced (known as a financial reduction), as detailed in Regulation EUR 39/2017, Article 4.
When to expect payment
If this is your first claim, RPA may need to carry out an inspection to check your records before they can pay you. Pre-payment inspections may also be needed on later claims if errors are found.
RPA aims to pay all other claims as quickly as possible, paying at least 98% within 28 days and 100% within 90 days from receiving them. If your claim is incomplete or RPA has to query any of the information in it, this period starts from the date on which the query is resolved. If you fail to provide any additional information within these deadlines, your claim may be rejected.
Records you must keep if you claim for the school milk subsidy
If you claim for the subsidy you must keep certain records to prove that you’re meeting the scheme rules. These records must prove that:
- you’re eligible for all the subsidy you’ve claimed
- the quantities you claimed are correct
- you kept within your maximum selling prices
- the quantities were served only to eligible pupils
- the milk products were not used as ingredients in the preparation of a meal
- the percentage of added sugar you’ve declared is correct for any flavoured milk you’ve claimed
Records should include:
- invoices that show the products supplied and the price of each product
- receipts or proof of payment
- credit notes (which must be deducted from the correct invoice or subsidy claim)
- delivery notes, where available
- evidence of the actual quantities delivered to each school and distributed to eligible pupils as drinking milk or yoghurt (for example delivery notes or returns from schools)
- evidence of prices charged for each product, their calculation and any justification for those prices
- copies of your claim forms and any amendments to them
- details of each school claimed for including full name, address and OFSTED or SEED number
- evidence of eligible pupil numbers, term dates and numbers of school days at each school you claim for
All records must be easy to check and you must have proof that the amounts claimed for are correct.
You can keep records:
- in digital format (for example, on computer)
- on microfilm
- on microfiche
If you keep records that are not on paper, you must make sure that they are as thorough as any records based on traditional bookkeeping and that they can be easily checked.
How long to keep the records
You must keep your school milk subsidy records for at least 3 complete years after the end of the calendar year the claims relate to. The records must be available if RPA asks to inspect them.
Failure to meet the scheme rules
If you do not meet the scheme rules:
- RPA may recover the subsidy
- you may need to pay an administrative penalty which is equal to the difference between the amount you claimed and the amount you’re entitled to (this will not apply if the mistake is classed as an ‘obvious error’ or you are not at fault)