Remploy is to consult with unions over the proposed closure of 36 of its 54 factories due to government funding cuts, which could lead to compulsory redundancies among more than 1,500 disabled workers.
Remploy factories were established 66 years ago as part of the creation of the welfare state in order to employ disabled workers in making everything from furniture to packaging. Today, the employment service’s facilities also undertake activities such as recycling electrical appliances and operating CCTV control rooms.
But Minister for disabled people, Maria Miller, said in a written statement to the Commons, that the sites could be closed by the end of the year because they were unlikely to be independently financially viable.
“The government will reduce its current subsidy to Remploy from the beginning of the new financial year so that we cease funding factories which make significant losses year-after-year and restrict funding to those factories which might have a prospect of a viable future without government subsidy,” she said.
Savings from the policy changed would also go on “proven employment programmes” to benefit “many more” disabled people, Miller added.
As a result of the move, Remploy now intends to consult with unions and management forums about the closures. Although the company said that it would “consider all measures to avoid redundancies”, it acknowledged that the situation could lead to the compulsory redundancy of 1,752 staff that it employs either directly or indirectly, some 1,518 of whom are disabled.
Changing market
The figure includes 208 employees who remained on Remploy terms and conditions of service after the factories that they worked in were closed in 2008.
Remploy will also work with the Department for Work and Pensions to find possible ways to exit the remaining factory-based businesses and CCTV contracts from government ownership with minimum disruption.
Liam Byrne, Labour’s shadow work and pensions secretary, told the BBC: “Quite simply this is the wrong plan at the wrong time. Unemployment is going through the roof. Back-to-work schemes are sinking under the weight of spiralling unemployment.”
In 2007, current employment minister Chris Grayling had told Parliament that Remploy and its workers would be safe, he added. “But now we know the truth. People with disabilities will never trust a word they say again,” Byrne said.
But Susan Scott-Parker, chief executive of the Employers’ Forum on Disability, was more upbeat. “The changes in Remploy’s focus and funding announced today reflect the needs of our labour market and the preferences of disabled people generally who have made it clear over the years that they wish to work in the mainstream of our society," she said.
Remploy was changing because the economy had changed and government policy "now more closely reflects the need to invest in human potential and not make assumptions on the basis of a label", Scott-Parker added.
"It is always unsettling when any organisation has to restructure, but having worked closely with Remploy for many years we are confident that those individuals affected by the changes will be effectively supported," she said.
