‘Millions skimmed off’ in nursery milk scam

Internal Department of Health audits revealed middlemen are charging around double the retail cost under a “scam” that is costing taxpayers an extra £10m a year.

A loophole in the system means the Government is obliged to pick up the bill, regardless of cost, submitted by firms acting as schools’ go-between with suppliers.

Government sources insisted every eligible child will continue to receive their free milk despite the planned shake-up next year, with one option being a system of national suppliers to cut out the middlemen.

“Every child will continue to receive their free milk,” a Government source said last night. “That entitlement will not change, but the system has to.”

Plans to alter provision have proved politically explosive for the Conservatives in the past. Last year Prime Minister David Cameron slapped down suggestions by Minister Anne Milton that the supply would be scrapped.

In 1971 Margaret Thatcher earned the nickname “milk snatcher” for ending free school milk for the over-sevens while Education Secretary.