This is going back over a decade (youngest DC is 23 now!), but at our primary school breakfast club, where DH and I were part-time helpers, the sugar, if a child requested it, was added by an adult - only ever a 'magic sprinkle' (practically none) if I was doing it. Definitely no free access and the only sugar bowl was on the counter where we served the food.
Then we had the parent who swept in one morning claiming that her little Petunia - a Reception pupil - had told her that she was 'allowed to have as much sugar as she liked' on her cereal. This is disgraceful. It has to stop.
And it did. No adding sugar at all, for any child, on any cereal.
I actually felt rather sorry for them, even if our own DC never had sugar on anything, at school or at home. It does seem slightly odd to me, though, that in this day and age, so to speak, children should be allowed such free reign when it comes to adding sugar to their food.
A piece of cake as a snack at after school club, I couldn't get too worried about. Unless, of course, the club is being 'sold' on the basis of a meal being provided.