This is the report of an independent committee, chaired by Lady Margaret McCarthy, which undertook the review at the invitation of the Hospital Caterers' Association and with the support of a grant from the King's Fund. The committee was asked to investigate and report on the perceived needs of patients and staff in hospitals with special reference to nutrition and dietary education; elimination of unnecessary waste; varied and attractive menus; and a pleasing and healthy environment - all within the framework of an economic and cost-effective catering service. The two sections of the report deal with catering services provided for patients and staff, and with the finance and management systems required to support these services, and makes recommendations for both.