Remploy

Mi6 – in Westminster Hall at 4:00 pm on 19th July 2006.

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Photo of Linda Riordan Linda Riordan Labour, Halifax 4:00 pm, 19th July 2006

I am delighted to have secured this debate, in which I, and many of my colleagues, can put my concerns directly to the Minister. My worry is that the current review of Remploy could take the shine off many of the good things that this Labour Government have done for the disabled, including the Disability Discrimination Act 2005. I am pleased that complete shutdown has been ruled out, at least for now, but any new five-year plan for the business must have the needs of employees at its centre. Work must be done with the trade unions that are close to the organisation and that can offer help and support.

There are many misconceptions about disabled people, among them the notions that, because their bodies do not work as normal people's do, they cannot cut it in the world of work, and that their work is unimportant. I am concerned that nearly 40 disabled people employed at the Lightowler road factory in my constituency, and many other disabled Remploy employees across the country, may lose their jobs as a result of the Government review of Remploy. Many of the workers are suffering from great stress because of the uncertainty about the future of their workplace, and there has been insufficient dialogue between management, workers and the unions. Remploy's management needs to consider how best to become more efficient. I am sure that it knows that its relationship with its employees and local communities is very special.

Photo of Jim McGovern Jim McGovern Labour, Dundee West

I am sure that my hon. Friend has had a chance to read at least part of the report, "Remploy—Review of Future Business Options", which was published only a couple of hours ago, and I am sure that she will be aware that the trade unions are calling for the management structure to be reorganised; they regard it as top-heavy. Page 39 of the report says that substantial savings could be made through a restructuring of the management. Does she agree that that would be a good place to start, in re-evaluating Remploy?

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The Updated memorandum to uncorrected minutes 1089 of the Public Accounts commitee back page lists: 220 first line Managers at Remploy on average salary of £31,000 P.A, 187 Middle Managers at Remploy on average salary of £41,000 P.A & 16 Senior Managers on average salary of £63,000 P.A. The highest a Disabled Shop...

Submitted by Tony Gledhill Continue reading

Photo of Linda Riordan Linda Riordan Labour, Halifax

Yes, certainly I do. I have had meetings with the relevant trade unions this week, and I have managed to read much of the document published today.

We must do all that we can to protect and develop the relationship between Remploy and the communities. In a letter written to me in April, the chief executive of Remploy, Mr. Bob Warner, welcomed the review, because he believes that it is time for strategic change at Remploy, but many, including me, believe that major changes have been taking place. They include the introduction of the Interwork scheme.

Photo of David Taylor David Taylor Labour, North West Leicestershire

My hon. Friend mentioned that the trade unions are quoted extensively in the report. Has she had an opportunity to look in detail at Remploy's scenario 3, which is its alternative business plan? I believe that a CD has been sent to all MPs, and it makes a powerful case for an alternative way ahead for Remploy that does not involve factory closures on the scale originally envisaged. Not least, that could involve developments in the service sector similar to the arrangements used by Tesco in some of its midlands Express stores, where as many as 40 per cent. of staff are contracted through the Remploy service arm. Is not that a possibility?

Photo of Linda Riordan Linda Riordan Labour, Halifax

That is a very realistic possibility, but it is early days for those schemes, although we must keep them under consideration. However, we must retain the sheltered work schemes, too.

It is the senior management's role to review and increase productivity wherever possible, but not to the extent that it undermines the whole ethos of Remploy, a business built on a history of caring and supporting its most valuable resources—its employees.

Photo of Mike Hancock Mike Hancock Liberal Democrat, Portsmouth South

The hon. Lady will certainly have my support and that of all Remploy employees in the Portsmouth factory. The Minister has said that she would give adequate time and funding to allow the changes to be considered properly, but does the hon. Lady agree that in some instances that could be a fairly lengthy period? I hope that the hon. Lady will agree that we must avoid a concertina time frame that would destroy any real sense of consultation.

Photo of Linda Riordan Linda Riordan Labour, Halifax

I thank the hon. Gentleman, and I shall cover that point later. Any changes must be made in consultation with the employees and trade unions.

I will list the reasons that Mr. Warner gives for his welcome of the review. First, he rightly points out that Remploy has proven that Interwork, a specialist recruitment agency, can deliver jobs in ever greater numbers, and at a cost that provides excellent value for money for the taxpayer. However, money should not be the only issue. A recent survey carried out by my local paper revealed that an overwhelming majority supported retaining Remploy at the taxpayers' expense.

Photo of Katy Clark Katy Clark Labour, North Ayrshire and Arran

Does my hon. Friend agree that one reason why there is a great deal of public support for initiatives such as those introduced by Remploy is that there is recognition among ordinary people of how difficult it is for people with disabilities to gain employment in other workplaces? All of us would like a wide range of employment options to be available to people with disabilities, but unfortunately that is not the case at the moment. Does my hon. Friend agree that that is why schemes such as those run by Remploy must be supported, and must continue for as long as they are necessary?

Photo of Linda Riordan Linda Riordan Labour, Halifax

That is the ideal, and we will strive to achieve it, but it is a long-term plan, so we must retain sheltered work places.

Secondly, Mr. Warner argues that unemployed disabled people have said that they prefer to work in mainstream employment, rather than in a sheltered factory. Although that is true in many cases, and although that is an ideal that we must always strive for—the Interwork scheme is successful in that regard—it is not always possible for a disabled person to be employed in anything other than a sheltered environment, or indeed to find employers who will take them on. Not all factories and workplaces are disabled-accessible.

Mr. Warner goes on to say that many of Remploy's businesses are in declining sectors, where the loss per person is high and the work experience of the individual is unsatisfactory, either because of idle time or lack of opportunity to develop marketable skills. I understand that statement, and I understand the dilemma, but new factories and businesses can and should be started in partnership with Government at local, regional and national level. I would go as far as to say that the board of Remploy should agree on an expansion plan in areas that show development potential.

However, the management of Remploy could do even more. It is clear to many, especially those closest to the organisation, that there are management issues that need to be addressed. It would be possible to reorganise the 10 Remploy organisations into three, making them more efficient and streamlined. Further changes could be made; for example, why does Remploy sell wheelchairs to another organisation, but not sell direct? Remploy produces excellent quality products in its 83 factories, and it should do much more to promote its products, instead of aiming to change its core business. The products need to be better marketed and sold directly, if appropriate. Every effort should be made to work with the workers' trade unions and with management to develop the business, in order to avoid cuts and reductions that make the business less productive overall. Interwork has benefits, but many of its jobs are short term and in non-unionised work environments; that is not what I would expect for vulnerable staff who need as much protection as possible.

Mr. Warner argues that 80 per cent. of the grant that Remploy receives from the Government supports jobs in Remploy's own businesses, although more than 80 per cent. of the jobs that it creates are in mainstream employment, through Interwork. Some £90 million of the grant that it gets from the Department for Work and Pensions is used to support factories. That means that about one quarter of the DWP budget for the employment of disabled people is spent on just 5,000 people. That cannot be the right use of resources, Mr. Warner says.

Although that may be the case—I and others dispute the figures—the basic point is that not all employees are able to work in the mainstream, and they should not be thrown on to the scrapheap because of employment challenges. There must be a place for the sheltered environment, and taking that option away from communities throughout the country is not the way forward.

Unfortunately, all of Mr. Warner's arguments and statistics are better used as illumination rather than support. Many calculations and figures are supplied by the failing Audit Commission, and the fall within the "How long is a piece of string?" category. It is possible to alter the cost per head for Remploy from under £10,000 to more than £20,000 depending on what is included in or excluded from the per head calculation, such as sites, costs from third parties and income from other enterprises. Some people have even suggested a figure of more than £40,000. Surely, no one can take that seriously. I certainly do not. Workers should not suffer because of management's inability to run a business. The simple message that I want the debate to convey is that Remploy is a major company, producing real goods and services and providing real jobs. "Real jobs for real people", as the company likes to say.

The company was started in 1945 to provide work for war-disabled ex-servicemen and servicewomen. It is now the biggest employer of disabled people in the country, with 5,700 people in 83 factories at locations including just about every decent-sized town and city in Yorkshire. Remploy is in textiles, furniture, health care, electronics, mechanical assembly and other manufacturing sectors. It is run like any other business, on a commercial basis, competing for contracts on the open market. In Halifax, 30 people work in a purpose-built factory in Lightowler Road, where there is a long and proud tradition of bookbinding for universities, hospitals and libraries, including the British Library. Until recently, Hansard was bound in a Remploy factory. It is a tradition that I would like re-established.

Remploy in Halifax is due to celebrate 60 successful years next year. I hope that those celebrations go ahead and do not simply represent a further decline in Remploy's employment in Halifax. There is a difference between Remploy and other companies, which Remploy calls "the paradox". The firm exists to employ severely disabled people so that they can live independent, worthwhile and self-supporting lives. At the same time, Remploy has to operate efficiently and compete in the commercial world. It is a tall order.

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The Remploy Trade Unions have always argued for "choice" for Disabled people. Disabled people should be allowed to choose where to work, What is wrong with Factories which offer a supporting environment? Bob Warner's questionaire to determine unemployed disabled people's choice of where they prefer to work, was given to 200 people in job centres with loaded questions. Question 1 was: In seeking employment would you prefer to work in a workplace where sick and / or disabled people work alongside non disabled colleagues or in a workplace where most colleagues are sick and / or disabled?
Does this sound reasonably worded or is it loaded?
Tony Gledhill - GMB Remploy Consortium Staff Member.
www.gmbremploy.unionweb.co.uk

Submitted by Tony Gledhill

Photo of Jim Sheridan Jim Sheridan PPS (Team PPS), Ministry of Defence

Does my hon. Friend accept the proviso that although Remploy requires Government support, there is also a role for local companies in buying Remploy products, such as textiles? In my constituency, companies such as Rolls Royce and Glasgow airport purchase uniforms for their employees, and I should like those companies, as well as the Government, to support Remploy.

Photo of Linda Riordan Linda Riordan Labour, Halifax

I agree. The problem is marketing, and it is not done efficiently.

Many people employed in Remploy's purpose-built factories might not be able to find work anywhere else. What Remploy offers is critically important to them. It is perhaps the difference between a life of tedious struggle and a life worth living. For many working in the factories, the alternative is a life on benefits, which costs national and local taxpayers more than it does to keep them at work. I have seen no mention of that in the report published today.

Photo of Jim Devine Jim Devine Labour, Livingston

We should consider not only the financial but the emotional aspect. People have something to get up and get dressed for in the morning, they meet friends and colleagues and they establish a social network. That could also be lost.

Photo of Linda Riordan Linda Riordan Labour, Halifax

I agree. As I said, it is the difference between a life of tedious struggle and a life worth living.

In the commerce-dominated world in which we live, those merely human considerations may end up taking second place. Until then, everything humanly possible should be done to keep Remploy alive and working.

Photo of Anne McGuire Anne McGuire The Parliamentary Under-Secretary of State for Work and Pensions 4:15 pm, 19th July 2006

I am delighted to respond to the debate and to agree with the final comments of my hon. Friend Mrs. Riordan. Today's report and my statement are exactly about keeping Remploy alive and working. However, what sort of Remploy do we want to deliver for the significant funding that we put in?

I do not want to focus too much on funding, because we can get tied up with figures, but I shall return to it. We must consider serious issues of comparison. I want to draw my colleagues' attention to the comparison between Remploy's funding and the number of disabled people it supports. The issue is not about the funding that we put in. If substantial numbers of disabled people went through Remploy, I would be more than comfortable with any figures presented to me; but in reality, although tens of thousands of disabled people work throughout Britain in sheltered factories run by Remploy and local authority factory networks such as those in which my hon. Friend Mr. McGovern organised when he was a GMB officer, tens of thousands of disabled people also work in mainstream or supported employment.

One third of our total support for disabled employment programmes goes into Remploy to support 9,000 people. Colleagues should consider the report in-depth, and I am sorry to tell my hon. Friend the Member for Halifax that the figure of more than £48,000 has been authenticated: some jobs in Remploy's toiletries division are subsidised to the tune of £48,000 a year.

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In scenario 3, PWC report - Household & Toileteries is one of the 8 businesses listed to survive, yet this group cost £48,000 per person according to the report & employs 200 disabled people. How can businesses costing less, therefore be closed down in favour of maintaining this failing business? The answer: Bob Warner & the Board invested £12million of Tax Payers money 2 years ago & are covering up the fact they made a very bad investment. The Building is not owned, it is leased at a cost £500,000 per year. The Machines inside are old machines moved from the 3 old sites, even the tanks outside were re-clad to look new. Where did the £12 million go? What was the original business plan?
Tony Gledhill-GMB Remploy Staff Consortium Member

Submitted by Tony Gledhill

Photo of Anne McGuire Anne McGuire The Parliamentary Under-Secretary of State for Work and Pensions

No; I want to make progress, because we will have an opportunity outside this forum tomorrow to discuss the figures in detail. If I have the chance, I shall return to my hon. Friend.

In a wider context, the debate offers us a valuable opportunity to consider the background to the Remploy review. It is important to state early on that no decisions have been made about Remploy's development. We have a consultant's report, commissioned by the Secretary of State and me, to provide us with independent advice. It is the advice neither of management nor trade unions; it is independent advice. Of course, the authors consulted management, the Remploy board and extensively with the trade unions, because that was part of their remit.

Photo of Linda Riordan Linda Riordan Labour, Halifax

The figure £49,000 that is quoted includes a set-up cost for the business over one year.

Photo of Anne McGuire Anne McGuire The Parliamentary Under-Secretary of State for Work and Pensions

PricewaterhouseCoopers presented us with the figure of £49,000, and it extracts some central management costs. It is at the top end of a range between £7,000 and £48,000. The majority of jobs in Remploy are supported to the tune of £23,000. May I deal with the policy, however? It is important and it may address some of my hon. Friend's concerns.

Photo of Stephen Byers Stephen Byers Labour, North Tyneside

My intervention is about the policy implications of the report and today's announcement. My hon. Friend the Minister knows that about 3,000 people in the north-east of England signed a petition opposing any factory closures, so they will welcome today's announcement. Will she confirm that additional funding is being made available this year to ensure no factory closures? Will she further confirm that we have five years to discuss the modernisation process, that there will be full consultation with the trade unions, and that Members will be fully informed, and that this period of change can be used to ensure that Remploy is fit for the 21st century and is able to deliver for those who need support, ensuring that they can compete in a different world?

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According to PWC Report, Factory closures will take place at the end of 2006 start of 2007. Scenario's 1 & 4 have been ruled out by Anne Mcguire - 2 & 3 both only offer closures of intially (scenario 2)37 Factories or (scenario 3) 58 Factories, this is the "Choice" offered to Disabled Employees. Page 53 states there are "no guarantees of no further closures". There is no alternative offered to 'no closures'.
Tony Gledhill - GMB Remploy Staff Consortium Member.

Submitted by Tony Gledhill

Photo of Anne McGuire Anne McGuire The Parliamentary Under-Secretary of State for Work and Pensions

I am delighted to agree with my right hon. Friend. To highlight the consultation process, I and my colleagues at the Department for Work and Pensions, both official and political, have tried to keep Members advised of the process.

Let me be frank: it is not easy for any of us. I am delighted to confirm that we are to fund a significant deficit, over and above the current grant of £111 million, to ensure that we can go to the end of the year and allow space for the trade unions, management and the board to consider how to develop Remploy so that it can support more disabled people. I emphasise again that it is not about cutting back on Remploy's budget; it is about increasing its budget this year and unlocking a modernisation fund for the next five years. It is certainly not about undermining the aspirations and ambitions of disabled people—either those currently employed by Remploy or those that I want Remploy to help over the next 60 years.

We must consider the matter in context. I shall reflect for a couple of minutes on what has been said of people's misconceptions about disabled people. I could not agree more. People have far too many misconceptions. We often look at disabled people for what they cannot do rather than what they can do.

One of the underpinning principles of our disability discrimination legislation is that it effectively forces society to consider what disabled people can do. Employers have to make reasonable adjustments if a disabled person can do the job in a mainstream situation. That is an enormous advance over 1945, and I am sure that it is welcomed by my hon. Friend the Member for Halifax. The disabled people that I meet applaud the Government for funding the move into employment through the supported network system, and the reasonable adjustments make mainstream employment a far easier option than it was 10 or 15 years ago.

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Remploy is an employer, Remploy Interwork is a recruitment agency. Costs of employment will never be equal to just finding someone a job. Many disabled people 'placed' by Interwork end up coming back again and are double counted.
Remploy's Directors are so keen to work with the Trade Unions to find a way forward, they TERMINATED the Consortium meeting early without dealing with business in hand because the Trade Union side asked the Company to give a copy of the Management's submission to PWC - which they refused to do. They would not even disclose it under confidential wraps to the Full Time Officials of the 5 independant Trade Unions. What are they hiding? Why terminate the meeting? Tony Gledhill - GMB Consortium Member.

Submitted by Tony Gledhill

Photo of Brian Iddon Brian Iddon Labour, Bolton South East

I thank my hon. Friend for giving way. She knows that I have a special in the subject, in that one of my predecessors, George Tomlinson, launched Remploy in 1943 as a result of the Tomlinson report. Does my hon. Friend recognise disabled people's fear of unemployment, despite the fact that it is not as difficult to get jobs today as it was when 3 million people were unemployed?

Photo of Anne McGuire Anne McGuire The Parliamentary Under-Secretary of State for Work and Pensions

I thank my hon. Friend for drawing the House's attention to George Tomlinson. Indeed, he has just written an erudite essay on him. One of the founding principles of Remploy was to establish a rehabilitation vehicle—a factory system—for disabled ex-servicemen coming back from the second world war. It was intended as a short-term move for rehabilitation and it was almost entirely ex-servicemen who used it at first; it allowed them to build up the skills and capacity necessary to move back into employment. I fully appreciate what my hon. Friend says about the distress and anguish that can be caused. That is why I hope that we can have a serious consideration of the report.

The report gave a set of scenarios. At one end they were unacceptable about the sustainability of Remploy Ltd, and at the other end they were unacceptable because of the closure of factory network.

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The Trade Unions have NEVER argued for Staus quo as indicated by Scenario 1. The Remploy 3- alternative strategy developed by the Trade Unions is a well thought out plan, with specialists reports to support the strategy. The Trade Unions will never support the out & out closure of a Remploy Factory because the situation & costs that the Factory's now face have been artificially engineered by the Remploy Board. Hoards of Senior Management jobs and non value adding positions have been created to skew costs. Work has been delibreratly turned away by...

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Photo of Anne McGuire Anne McGuire The Parliamentary Under-Secretary of State for Work and Pensions

I shall give way first to my hon. Friend and then to the hon. Gentleman.

Photo of Jim McGovern Jim McGovern Labour, Dundee West

I have read the report, and it seems that scenario 4 suggests the removal of Remploy factories except for the textile side of the business. On page 59, it states that

"All business units except for Textiles are disbanded within this scenario".

At the risk of sounding parochial, would my hon. Friend agree that that must mean that the long-term future of the Dundee factory should be maintained?

Photo of Mike Hancock Mike Hancock Liberal Democrat, Portsmouth South

Does the Minister agree that it does not help to keep mentioning things such as "£48,000 for one employee" as if the mess was the responsibility of the disabled person who was working there? It was the inadequate senior management structures at Remploy that caused the problems, and we should avoid that sort of statement.

Photo of Anne McGuire Anne McGuire The Parliamentary Under-Secretary of State for Work and Pensions

I said that I did not want to focus on the figures, but I would have been abrogating my responsibility as a Minister if I had not told Members the range of subsidies for some the jobs. However, that is not the essential criterion.

I assure the House that what I have presented to the House is a five-year opportunity to modernise Remploy. I see among my hon. Friends, particular colleagues who have negotiated their way through various situations in the industrial world, in the private and the public sectors. We are giving a £500 million financial envelope, plus an additional amount to meet the shortfall on this year's grant—as we have done in previous years. There is also a modernisation fund. The trade unions, management, local communities and disabled people will be able to say what they want. Hon. Members must accept that there is a debate out there. Many disabled people want to work in the mainstream. As my hon. Friend the Member for Halifax said, and as we say in the statement, some disabled people want to work in a more supported or sheltered way.

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Today, there were many frightened Disabled people in Remploy who had been told of the prospect of losing their jobs because of the way Remploy has been mis-managed. Bob Warner (Chief Exec) has even prepared a video to tell Disabled people- don't worry you can have voluntary redundancy or Early retirment when we take away your Factory & livelyhood. The 5 year plan is to do away with Factories & expand Interwork via high street branches, which according to PWC are: "not yet tried and tested, with the first two Interwork branch pilots currently in operation and two further pilots to be opened by the end of June. Indeed, we are yet to be convinced that there...

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Photo of Linda Gilroy Linda Gilroy Labour, Plymouth, Sutton

I am the chair of the Friends of Remploy. I welcome the meeting that the Minister has called tomorrow morning, when we can explore such matters further. Could I press her about having an early meeting with the trade unions, as I know that they want to meet her?

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The people made redundant at Ammanford in Wales who Remploy stated would be found new jobs, not one single person has been found a job. This week after five years...

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Photo of Anne McGuire Anne McGuire The Parliamentary Under-Secretary of State for Work and Pensions

I have had constant discussions with trade union representatives throughout the process. As late as last night, I had further discussions with them so that they were fully aware of the sort of direction that is being taken.

A statement was made earlier today, and an extensive independent report informed that statement. We have not taken any decisions. We are offering Remploy the opportunity to get more disabled people into work, because for many it is the best way out of poverty. I want to see that third of my disabled employment budget helping more disabled people.

I hope that we can engage positively on the modernisation of Remploy. As I said to my hon. Friend the Member for Halifax, I want to ensure not only that she will be able to attend Remploy in all its manifestations—Interwork, managed services and factories—on its 60th birthday, but that her successor a few years down the line will be invited to attend its 100th birthday.

I know that it is not technically correct to do so, but I commend my statement to the House and I thank hon. Members for the opportunity to discuss the matter today. I hope that we can continue our discussion.