Remploy, provider of work for disabled people: special report

Remploy, the government-funded company providing employment for disabled people, must modernise and restructure, minister for disabled people Anne McGuire announced last week.

The company needs to support “significantly more” disabled people within its existing £111 million annual budget, says the government.

The  minister’s remarks followed the publication of a report into Remploy’s future by PricewaterhouseCoopers and Disability Matters chief executive Stephen Duckworth.

Remploy provides work for 9,000 disabled people. Over 90 per cent of its staff are disabled. It was founded in 1945 to provide sheltered employment for disabled people, including many ex-servicemen.

About 5,000 disabled people work in 83 Remploy factories  (goods manufactured include textiles, electronics, packaging and furniture).

Around 4,000 disabled people are supported via Remploy’s Interwork job placement scheme (employers include Asda, Boots, the civil service, Iceland, and Tesco).

The picture of Remploy’s finances painted by the PricewaterhouseCoopers review and a 2005 National Audit Office report

The average annual subsidy for each Remploy factory worker is £18,000. The highest subsidies are over £48,000 per person per year. 

However funding places on Remploy’s work placement programme cost a more reasonable £3,400 annually per person.

Other supported employment schemes cost £5,000 annually per person.

Before government grant income is taken into account, Remploy lost  £129 million during the last financial year. The figure is up from a £103 million loss in 2000. Factories accounted for the vast majority of losses.

Remploy is currently unable to operate within its existing budget. Grants paid to the organisation over the last two financial years were more than agreed funds.

Future scenarios outlined in the new report range from taking no action to closing down all factories.

The government has ruled out both these options.

The report argues that a greater emphasis on job placements  – and less on subsidising factories – would provider better value for money and be more in line with government policy on integrating disabled people into their communities.

Launching the Remploy review in March, McGuire said disabled people should be given the “chance to be integrated into mainstream workplaces wherever possible”.

The minister has asked Remploy’s board to “bring forward a five year restructuring plan”. Staff and unions will be consulted.

Unions including the Transport and General Workers Unions have reacted angrily to the prospect of factories closing. But are jobs that segregate disabled people to work in factories worth fighting for?

Remploy factories are not preparing disabled people to enter the open job market.

In 2004/5 only 10 disabled people moved on from Remploy factories into unsupported unemployment. During this period 1,673 people progressed from Remploy job placements into unsupported work.

There are disincentives for factories to help the most able staff prepare to leave for jobs outside because this would entail an exodus of the best workers, the PriceWaterhouseCoopers report finds.

It paints a portrait of old-fashioned factories that would have closed long ago without government subsidies. When facing hard times, the factories cannot reduce the size of their labour force – because they exist to provide work for disabled people.

 But the factories are not just behind the times commercially

The report notes a decline in council and charity-run sheltered factories, leaving Remploy as the main provider. As government policy focuses on employing disabled people in mainstream workplaces and UK manufacturing declines, Remploy has not faced the same political pressures as the public and voluntary sectors, the report concludes.

Funded by government aid, Remploy does not have to compete for contracts, as other providers of support to disabled people do, says the report.

Disability charities – who are not keen on segregated workplaces for disabled workers – praised the idea of expanding supported job placements in the community.

Carol Herrity, campaigns manager at Mencap said: “We strongly favour supported employment in real, paid jobs in a mainstream, non-segregated environment where people are part of their community.”

Mencap says 90% of people with learning difficulties of working age are unemployed although research  shows that at least 65% want to work, and make keen, reliable, effective employees when they get the chance to prove themselves.

Catherine A’Bear, director of corporate affairs at the Shaw Trust, provider of work and training for disabled people, said: “We believe that, wherever possible, disabled people should be able to be part of the mainstream of society, and that means working in the same workplaces as non-disabled people. Factories are not the only way for people with severe disabilities to be employed.”

The Shaw Trust is one of the larger providers of Workstep, a government scheme offering tailored support to disabled people in workplaces in the community, and would like to see it expanded.

“Employment services for disabled people do not receive sufficient investment.  Workstep currently supports only 27,000 people per year – yet at least another 180,000 in the UK could benefit from it, says Catherine A’Bear.