Well, I wouldn't be outraged and I am sure Gilly meant that the meals would be on offer, not obligatory. If the profit motive were removed, so that the meals were made in school kitchens by staff employed by the school, the meals could be hot, nutritious and not too expensive. There would be no stigma, either.
Outsourcing of many services by schools, hospitals, prisons, etc. has allowed some firms to become incredibly rich and I don't believe that they are delivering good value or good services in many areas. Private prisons are much less successful than state-run prisons. Companies wishing to tender for these contracts don't offer lavish hospitality to ministers out of the kindness of their hearts and many ministers involved in the awarding of contracts are employed by the successful bidders after they leave office. The whole system is rotten but neither this or the last government has shown any appetite for tackling corruption - I wonder why?