Remploy urged to cut costs by slashing management

Remploy, which provides jobs for disabled people, should solve its cash crisis by cutting management costs rather than shutting factories, trade union leaders say.

The GMB has presented the company’s board with a plan to make Remploy financially sustainable. The provider’s 83 factories would be kept open and its employment support business, Remploy Interwork, expanded.

After public subsidy, the provider lost £19.5m in 2004-5 and £16.9m in 2005-6. Its finances were criticised in reports from the National Audit Office and consultancy PricewaterhouseCoopers.

Disability minister Anne McGuire last year ordered Remploy to produce a modernisation plan, which would keep it within a five-year public funding limit of £555m, significantly increase employment and a avoid a ban on compulsory redundancies for disabled people.

Remploy has a target to find mainstream jobs for 20,000 people by 2011-12, more than four times the 2005-6 figure.

The PWC report showed the average subsidy for staff directly employed in Remploy factories was £18,000 a year, while ­placements through Interwork cost £3,300 a person each year. The Department for Works and Pensions rejected closing all 83 factories and retaining the status quo, but made clear its support for a switch from direct employment to employment support.

However, GMB convenor for Remploy Les Woodward said a report it had commissioned by financial firm Grant Thornton had shown “savings can be made from all areas, not least the massive management structure”, without closing factories.

A spokesperson for Remploy said it would present a draft plan soon, which would then be consulted on.

Provider guides clients into mainstream work
Remploy was founded in 1945 to provide work for disabled people, which it did initially through a network of factories and service businesses, and, from 1988, through supporting them into mainstream employment. It employs 5,000 people in factories and found jobs for 4,300 disabled people in 2005-6, up from just over 500 in 2000.

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Mithran Samuel