Remploy

– in Westminster Hall at 4:42 pm on 19th November 2008.

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Photo of Annette Brooke Annette Brooke Shadow Spokesperson (Children, Schools and Families), Shadow Minister (Education) 4:42 pm, 19th November 2008

For the sake of the Minister, whom I welcome to his new role, I should like to state my position. I support the overall movement towards finding suitable employment for disabled people in an inclusive manner and a mainstream setting. However, we are where we are with the historic Remploy set-up. Many workers have been in a protected environment for so long that it is not realistic to expect them all to transfer to new work settings. One of the Remploy workers at Poole had been there for more than 40 years, and a further 10 had been there for between 20 and 35 years. There will always be scope for transitional arrangements and specialised training for both employers and employees.

I have been involved in discussions on the Poole Remploy factory since 2006. In May 2007, it was announced that the factory would be closed and the manufacturing of marine products, including lifejackets, transferred entirely to the Leven factory in Scotland. That was an unfortunate decision, because location-wise, Poole ticks all the boxes. It is close to existing markets, and with the Royal National Lifeboat Institution headquarters in Poole, there was an opportunity to generate many more orders through strong management and leadership. That could also have led to more efficiency in production and better profit margins.

The closure of the Poole factory was at least deferred when in November, the then Secretary of State, Mr. Hain, announced that there would be 15 fewer factory closures, and that the Poole factory would not be closed. For Poole, the challenge was great. New products had to be found and the subsidy per worker reduced to £9,000 by the end of this financial year. It was anticipated that there would be more scope for public procurement to generate additional work for Remploy factories. The Poole site was retained specifically to develop a plan for potential increases in business arising from the new regulations on public procurement. The stated aim was to supply local authorities in the south-west region.

The National Audit Office wrote to me and confirmed that the new public procurement regulations should allow local authorities greater opportunities to contract work to Remploy. I believe that 12 factories in total have the challenge of securing orders from public procurement, and I appreciate that that is at central Government as well as local government level. Indeed, there is already such public procurement by Departments. However, will the explain Minister whether any of those 12 factories has succeeded in getting public procurement from local authorities?

Throughout my tale of woe, I wish to place on record my thanks and admiration for the work of Gerry Starkey and Iain Anderson, Remploy employees who have worked very hard to secure the future of the Poole factory, and Lorraine Sheen, the trade union co-ordinator who returned to the factory to try to keep the show on the road. I also thank the Minister's immediate predecessor, Mrs. McGuire, who attended to my many questions with courtesy and was supportive throughout the past two and a half years.

Following the then Secretary of State's statement in November 2007, I eventually received a letter from Remploy dated 25 January 2008, basically asking me to participate in a local champions group. I was more than willing to do so, as it was really just an extension of the support that I had already given the factory. The inaugural meeting was supposed to be in February, but despite my best efforts, it did not take place until 14 April. Before the first champions meeting had even taken place, as I said in a Westminster Hall debate in March, machinery was being removed from the Poole factory and the existing orders were coming to an end. Employees were offered increased redundancy pay.

There was uncertainty and bewilderment among the employees, because they did not even know what the new product was and because the factory was being run down. Many accepted a redundancy offer, even though it might not have been in their long-term best interests, as many of them had been at the factory a very long time and were unlikely to be able to adapt to mainstream work. I worry greatly that some of them are now isolated and just sitting at home. At the start of the process, the Poole factory had 43 supported workers. Now it has 19, with varying levels of disability. It used to buzz with activity and happiness, but in recent times it has been depressing to visit, with the remaining workers sitting around with little or nothing to do.

As a local champion, I made contact with an enormous range of organisations in Dorset: the primary care trusts, the police, the fire service, the health service, all the local councils at different levels, the local universities and colleges and the private sector—everybody I could think of. The initial response was really positive, showing a genuine desire to support the factory. The exception was Poole borough council, which did not send a representative to the inaugural champions group meeting. Early on, its chief executive expressed to me the view that it was cruel to the remaining workers to keep the factory open with no work, and that Remploy clearly had an agenda to close it as soon as possible. Some of the other councils have at least referred other business to Gerry Starkey, but no public procurement has been achieved.

Was the new beginning, with public procurement, just a myth? Is the Poole factory being deliberately closed by slow poison? If Poole borough council had given more support, would orders from other local authorities have followed? A reply that I received from the leader of Poole council stated:

"Both the Council and myself, along with many others, have supported the retention of the Remploy factory and the employment opportunities it provides within the Borough."

Fine words, and indeed councillors from the ruling group joined the march in the town. However, it continued:

"As I know you are aware, the placing of Contracts by the Borough is strictly governed by law and our own Standing Orders."

How do we interpret that? Maybe the standing orders could have been changed.

I insisted that a meeting take place between Poole borough council and Remploy in August, but as far as I know, there were no productive outcomes. Indeed, the previous Minister reported to me that Remploy had said that it had

"exhausted all local public sector prospects in Poole and Bournemouth as Remploy's strenuous effort has resulted in no opportunity being offered for them to quote for any of their Local Public Sales services, other than the suggestion that Remploy could respond to tender invitations just like everyone else."

A further question to the Minister is why the Poole factory was given the task of supplying local authorities in the south-west if it was not possible to have a route into public procurement which did not require entering a full tendering process. Obviously, the work had to be suitable for the work force, which placed a further limitation on seeking orders. I honestly do not know whether the failure to achieve orders from local authorities was because of Poole borough council's lack of co-operation and support, because false hopes were raised by the so-called relaxation of the regulations for public procurement or because other bodies do not want to engage with Remploy because they have a low opinion of the national company. I hope that the Minister can throw some light on that.

In recent times, Gerry and Iain have been able to secure small orders from the private sector, and I was pleased to hear yesterday that the factory is at work doing electrical mechanical assembly. The employees have had some training in that, and there is enough work until Christmas. However, I received a letter from Alan Hill, Remploy's director of enterprise businesses, dated 8 October. He writes that

"continued employment at Poole depends on winning new business and real evidence in the current financial year on reducing the loss per disabled employee to £10,400"— a slight discrepancy, but not to worry. He continues:

"The site was retained in November 2007 in anticipation of increased business arising from new procurement regulations surrounding reserving contracts for supported factories."

Photo of John Barrett John Barrett Shadow Minister, Work & Pensions

I agree with everything that my hon. Friend has said. Does she agree that local councils must be made aware of their obligations to tender for the high-quality products that are available at Remploy factories? Through the new public procurement procedures, they could themselves be saviours of those factories.

Photo of Annette Brooke Annette Brooke Shadow Spokesperson (Children, Schools and Families), Shadow Minister (Education)

I thank my hon. Friend for his intervention. There must be scope for working with councils to understand why Remploy has not secured any orders whatsoever.

Mr. Hill goes on to state:

"The site has had little or no work for 6 months. The current loss per supported person at Poole is just over £24,500 per annum and the factory has lost £232,000 in the first 6 months of the year. Despite efforts by the local management and sales team we have not been able to secure large quantities of public sector procurement and we have therefore widened the search for opportunities to include the private sector also. Time is short and we are not receiving support from the stakeholders locally to help guarantee the future of the factory. I trust we can rely on you to use your best endeavours."

He can rely on me, but I was so angry when I received that letter that I was determined to secure an Adjournment debate and make the matter public.

Is it surprising that the cost per employee is so high, given that work was taken away from the factory before there was any opportunity to get new work in its place. At least three months were wasted pursuing public procurement. That seems to have been a wild goose chase not of the local factory's making but perhaps caused by central Government and Remploy nationally or by the Poole Conservative-controlled council's failure to give the factory genuine support.

What other business would be operated in such a way? Who would take away the machinery and the product while they think what they might do in the future, employ sales managers to pursue something that seems impossible and then say that losses have risen? Private work is now being secured, and I have other leads which may prove productive; for example, a further meeting is planned with Bournemouth university shortly. However, we have to take on board the fact that we are now in a recession, which may or may not help to secure the type of work for which the factory is looking. There is definitely greater clarity about what can be achieved at a reasonable price and what is unrealistic for our factory.

I say "our factory" because I am passionate about its survival. It has been given an impossible task in the time allowed, given all the delays and lack of forward planning as to how it could get from the starting point to a new and sustainable future. Hard work has almost saved the day, but I suspect that more time is needed. I ask the Minister to consider the vulnerable work force, and how they have been treated over this period. They are not mere loss-makers on a balance sheet but real people who deserve better from the Government and Remploy.

I understand that the Minister cannot give a commitment today about extending the time period, but I would like him to keep in touch with Remploy and ensure that contact is maintained before any decision is made in March. That would be a first step. Clear monitoring and taking on board what a terrible time the workers in Poole have had are necessary. I was sent the report, "Remploy Review: Building on Success in 2008", and I was heartened to read its positive case studies of individuals and Remploy factories, but it is interesting to note the references to public procurement. Bob Warner, the then chief executive, wrote:

"To make our own businesses successful we must secure more sales to the public sector. We have worked closely with the trade unions to expand sales, but we need continuing support from across the public sector if we are to achieve sustainability for the factory network."

Those are fine words, but meanwhile Poole and the workers are suffering.

Alan Hill wrote:

"Selling more to the public sector is critical to Remploy's five-year plan particularly as the final modernisation plan included a significantly higher sales target from the public sector to fund the retention of fifteen sites which were identified for closure in the original plan."

Public procurement is vital for several Remploy factories. I myself have written to Government Departments, and if that helps other factories, I am delighted. There is a bit of a problem, as local authorities in my area could not quite grasp the idea that, if they placed an order, the work might not necessarily be completed in Poole. They did not seem to understand that Remploy is a family of factories that specialise in particular lines. Perhaps much more communication is needed.

I believe that there is a future for Remploy in Poole. The factory will be smaller and will probably move to a smaller site. At present, its site is very large. In normal times, it would yield a big return to Remploy. We must take on board the fact that, overall, 40 per cent. of the Remploy work force have mental health and learning difficulties. We have to look after them. I had a vision that we would have a training centre on the site, but I do not think that Remploy was ever very keen on that. There have been talks with existing suppliers of training opportunities but the conclusion is that nothing more is needed. I am not convinced.

There is a second battle after we have secured the future of the factory. I have in my constituency casework on at least three adults with autism or Asperger's. I would like to tell the Minister a little about Sam, who is 23. He has never had a job. He is fed up with being sent off to voluntary placements. Sometimes he cannot access them easily because he does not drive. He wants a real job, and he wants to earn money. He has a girlfriend now. He told me that the adviser at Jobcentre Plus said, "Oh, we can't place people with Asperger's." I know that there is a gap out there. That will be my next mission, once the future of the factory is secured, but, first and foremost, I want to ensure that disabled people in Dorset can really look forward to their future.

T

The closure programme of Remploy was a disgrace and Factories should not have closed, York Factory being the prime example. I have seen the letters sent by Alan Hill( EB director) and am pleased that this has resparked the discussions, It is a plea to MPs to continue the fight. Remploy needs the public procurement work, the work is there and used to be done by Remploy to a very high standard until Portillo changed the priority suppliers scheme. Article 19 regulation7 allows contracts to be set aside for 'sheltered employment'. I am pleased that Alan Hill and his team are working hard with the Trade Unions to get Factories sustainable and even in the difficult economic climate we face now we are still winning orders. We need more to be done to secure the Procurement Contracts.
Tony Gledhill GMB National senior Shop Steward.

Submitted by Tony Gledhill

Photo of Jonathan R Shaw Jonathan R Shaw Parliamentary Under-Secretary (Disabled People; Minister for the South East), Department for Work and Pensions 4:58 pm, 19th November 2008

I congratulate Annette Brooke on securing this debate on Remploy and on matters that are important to her constituents. One can have no doubt about her passion and commitment for the people who work at the Remploy factory in Poole in her constituency. I pay tribute to her efforts to secure more work for the site. She referred to what she has been doing with Bournemouth university to help secure more orders for the factory.

Before I address the issue of Remploy and public procurement, it is important to put the debate in context. Many in the House will know that Remploy was established after the second world war to provide work for injured servicemen and women. The aim was to provide development and training through work to enable disabled workers to return to the mainstream employment market.

The combination of new technology and the most far-reaching programme of disability rights legislation in Europe means that we are better able to support disabled people in a mainstream environment and offer them a greater range of employment opportunities. However, I take the hon. Lady's point about her constituent with Asperger's and the advice from Jobcentre Plus. We need to grasp more readily the situation with regard to the benefits and the high level of skills that people on the autistic spectrum have.

I was talking today to officials who had been to America and seen people with Asperger's operating in banks, doing data input work to a level of accuracy that few people could achieve. Those officials saw the benefits of employing such people, as initiated through a state scheme. The employer told our officials that, even if the state withdrew its scheme, which it has no plans to do, it would keep those employees because they are excellent. For example, they had no time off work and the employer saw the level of attendance at work rise throughout the department. Not only are those people excellent workers, but they are an excellent example. I am sorry to digress, but the hon. Lady makes an important point with some passion. I share her determination to see improvement in the situation, because it is relevant to this debate.

Some years ago, the Prime Minister's strategy unit report, "Improving the Life Chances of Disabled People" gave a clear steer away from segregation of disabled people in sheltered factories through its recommendation that the Department

"should, from 2006 onwards, increase the flexibility of budgets within its current supported employment programmes away from programmes which fail to integrate disabled people in mainstream employment and into programmes which...assist disabled people to progress towards open employment; provide value for money; and fulfil the wider objective of social inclusion", which the hon. Lady supports, as she mentioned in her opening remarks. That view is shared not just by the hon. Lady, but by the vast majority of disabled people and their organisations.

If no action had been taken, the cost of Remploy's factory provision would have continued to rise to £25,000 per person per year by 2013-14, forcing the Department's annual contribution up to £165 million, some £55 million above the £111 million baseline. The hon. Lady mentioned the desire to reduce the costs to £9,000, which was contained in the original agreement that my right hon. Friend Mr. Hain instituted. That is not to happen by March 2009. I do not know whether the hon. Lady knows that; perhaps she can indicate. The agreement always assumes a five-year programme to get to that level. Clearly, to go from £24,000 or £25,000 down to £9,000 within that time frame would not be achievable.

We have been drawing on and developing experience and the knowledge built up in the factory network. Remploy's employment services are now able to support disabled people into sustainable jobs at a one-off cost of just over £3,500 and that accounts for three quarters of all progressions to unsupported open employment. So it can do it.

The Remploy board was asked to develop a five-year restructuring plan to modernise its business, avoid compulsory redundancies for Remploy's disabled workers, support substantially larger numbers of disabled people into mainstream work and stay within a funding envelope of £555 million over the five years, to ensure that escalating costs do not put at risk funding for other Department for Work and Pensions programmes for disabled people, such as Access to Work and Pathways to Work. I am sure that both the hon. Lady and John Barrett support those programmes. Any proposals by the board had to fully protect Remploy's disabled employees from compulsory redundancy. In developing its plan, the Remploy board engaged with a wide range of stakeholders including trade unions, Members of Parliament, the devolved Administrations, disability charities and employer representatives.

Up until the modernisation of the company, Remploy employed about 5,000 disabled people at 83 factory sites. The hon. Lady has mentioned that. That number is down now to 54. The hon. Lady mentioned the review on that number and the 2,900 people.

I shall now discuss the public procurement debate. In his letter, my right hon. Friend the Member for Neath said to the general secretary of GMB, Paul Kenny, in 2007:

"Remploy's modernisation proposals were dependent on extremely ambitious sales targets, including 130 per cent. increase in public procurement. To meet those targets will require a concerted effort on all sides—Government, management, trade unions, local MPs and other political representatives."

That means all of us: all the above, basically. The UK pressed hard to secure a provision in the new European Union procurement directive, implemented from January 2006, to cover procurements from supported factories and businesses.

Photo of Jonathan R Shaw Jonathan R Shaw Parliamentary Under-Secretary (Disabled People; Minister for the South East), Department for Work and Pensions

No, because I need to answer the points raised by the hon. Lady.

My right hon. Friend the Member for Neath wrote to Cabinet colleagues. The Prime Minister has urged all Ministers to do what they can in respect of their Departments exploring procurement. Hon. Members are all aware that most sites rely on local sales. But no factory makes an operating profit and all factories need more business. Some sites rely heavily on local procurement and are struggling to bring the work in. Remploy is now operating its manufacturing business against the backdrop of a difficult economic climate, as the hon. Lady said. Each Member of Parliament with a Remploy factory in their constituency faces a similar, difficult task in securing work for their factory.

The hon. Lady will be aware that we are organising a reception at which we will discuss the procurement programme and look at ways in which we can better secure procurement in a more co-ordinated way. My right hon. Friend Mr. McCartney will be presenting some proposals. He has been in discussions with his regional development agency to see how we can join together all the regional development agencies to have a more co-ordinated approach to securing more public procurement. It seems to me, as the Minister coming in and looking afresh at this matter, that there has not been the necessary co-ordination. I have met the trade unions and management at the monitoring and implementation committee, which I chair, and that is the picture that has emerged for me. I have discussed the matter with my right hon. Friend and I hope that his proposals will provide a blueprint and further impetus for us to be able to better secure the work.

The hon. Lady mentioned that some local authorities are worthy and others are less so. She has some strong, harsh words for her borough council, and I am sure that it will have heard what she has said about its willingness to engage, as will the Remploy employees. It is a tall order, and I do not underestimate for a moment the task of bringing in 130 per cent., but it is certainly do-able. How many local authorities know that they do not have to tender for contracts that are under £70,000?

Photo of Annette Brooke Annette Brooke Shadow Spokesperson (Children, Schools and Families), Shadow Minister (Education)

In my list of champions and at our meetings, I included representatives of the Government office for the south-west and the South West of England Regional Development Agency, but they sat back as though it were someone else's job. How will the Minister make sure that local authorities are aware of their responsibilities, and that they can help?

Photo of Jonathan R Shaw Jonathan R Shaw Parliamentary Under-Secretary (Disabled People; Minister for the South East), Department for Work and Pensions

The hon. Lady knows that I do not have a lever next to my desk in my ivory Whitehall tower, but between us we can do a better job. That needs better co-ordination of the effort to evangelise and persuade local authorities. She referred to examples of what she has been able to achieve, and she will be an expert in generating her own publicity in her community. If Bournemouth university is going to engage Remploy, hats off to it. I am sure that she will sing its praises from the rooftops of every tall building in Poole.

The approach should be on a number of fronts, and that is the wider public approach, but it needs to be more co-ordinated within the institutions and structures with which the Government have a relationship. I certainly commit myself to doing everything that I can to deliver on that task. It is a tough one, but everyone knew that when they signed up to it, because of the wider policy ambition of using our resources and getting people into mainstream employment.

I must conclude my comments because I am aware of the time, but I thank the hon. Lady for bringing to my attention the concerns of her constituents in the Remploy factory in Poole in the south-west, and I look forward to working with her and other factories to ensure that we secure more by way of public procurement. That is all we want to do. The target is ambitious, but we can go about it in a better way to obtain the work that is so desperately needed for those factories.

Question put and agreed to.

Adjourned accordingly at eleven minutes past Five o'clock.

A

Isn't it about time you delivered on your pledge of "getting people into mainstream employment". Where is this mainstreeam employment? Hasn't it been just over six months, since over 200 disabled workers was thrown out of our Remploy factory in St Helens.
You promised that you had 160 "new" jobs per week in St Helens for us! Where are they and if so why are most of the ex-Remploy employees still, waiting to gain "meaningful" employment.
It is a sad, sad, fact that some of the most vulnerable workers are faced with a "forced" lifetime on benefit's. You know, that benefit system that you are changing to force disabled workers into jobs! What jobs? or is this going to be another broken pledge! Wake up, you can't have it both ways!

Submitted by Alec Mills