Support the Remploy workers

Support the Remploy Workers

Peter Purton, Equality & Employment Rights

Briefing for unions

The trade unions representing disabled workers employed in Remploy factories are campaigning to save 36 factories from closure, leading to 1,700 redundancies, following the announcement by the Government on 7 March 2012 that it accepted the recommendations of the Sayce review. This briefing presents the key arguments to back up this campaign and urges all trade unionists to show their support for their disabled sisters and brothers whose jobs are under immediate threat.

Contents:

The Sayce review and the Government announcement

Key facts about Remploy factories

A trade union alternative

Key arguments and the trade union answer

What you can do

Appendix: list of threatened Remploy factories

The Sayce review, and the Government announcement

The coalition Government elected in 2010 inherited a budget spent on a variety of programmes set up to encourage and support employment for disabled people. The main areas of expenditure were the budgets for Access to Work (a fund that contributes to the cost of adjustments for employers to enable disabled people to secure or retain work), and the annual subsidy for the supported employment offered by Remploy, the organisation set up in 1946 to provide work for disabled war veterans. Remploy also provides training programmes for disabled people.

Liz Sayce, then chief executive of the disability charity RADAR, was invited to review the whole package of specialist disability employment programmes. Her report was published in October 2011 and its key recommendation was the termination of funding for Remploy factories with the resources thereby freed up diverted to increase the budget for Access to Work. The TUC had contributed to Sayce's consultation process but its views were ignored.

On 7 March 2012, Maria Miller MP, minister for disabled people, made a parliamentary statement announcing publication of a paper entitled Disability Employment Support: Fulfilling Potential. She stated that the government had decided to accept the recommendations of the Sayce review, and that 36 of the 54 Remploy factories would be closed immediately, with the remainder given a year to become economically viable. 1,752 workers will be made redundant, of whom 1,518 are disabled, by August 2012.

The redundancy consultation process is now underway.

Key facts about Remploy factories

The Remploy unions (GMB, Unite and Community) do not dispute that many Remploy factories have become unproductive in the sense of having to be heavily subsidised - but immediate closure is the wrong solution.

Many of the facts used by the Government to support its case are out of date.

There was a significant increase in sales from the factories between 2010/11 and 2011/12, from £104m to £116m - a rise of 16.5% in one year. As a result, the cost of the Remploy factory sites fell (from £68m to £50m). Even further reductions in the subsidy required were expected in the current year. This was ignored in the government's announcement.

The increase in sales took place even though the Department for Work and Pensions stopped all marketing of Remploy.

At the same time, bonuses of £1.8m were paid to Remploy senior managers (November 2011). This was at a time when shop-floor workers were on pay restraint.

Over the last year, more than 2000 trainees on the Government 'Work Choices' programme were placed in Remploy factories and have progressed satisfactorily. However, the money raised from this programme has not been counted in the factories' accounts, making the figures look worse than they really are.

The closure announcement makes no allowance for the cost of shutting down the factories and making redundant all the workers. These costs include early release from the site leases, direct redundancy payments, and the significant cost of closing the pension scheme. The unions estimate this as £760m, and in addition the cost of paying benefit to the former employees, combined with the loss of tax revenue to the treasury, also has to be taken into account, and may amount to another £40m every year.

A Trade Union alternative

The factories provide decent well-paid employment, self-respect and independence for several thousand severely disabled people who would never have secured work outside Remploy, and who will certainly not be offered employment in the present situation of mass unemployment across the country. The cost of closing the factories could instead sustain them for many years to come, especially if they are modernised and reformed.

The Remploy trade union consortium has long campaigned for reform of Remploy. In 2008, when the previous government undertook a review of Remploy, the consortium produced a strong, costed, alternative business plan to transform the sector. This plan was ignored by the then government and has not even been considered by the present government.

The trade union plan was based on a vision in which supported employment factories would become efficient manufacturing sites, working with local communities, and with an enhanced role in providing training through modern apprenticeships.

One focus has been its inefficient and over-staffed management, exclusively provided by non-disabled people, and the proportion of senior managers has increased. Large sums of money have been thrown away on consultants, but rather than modernise the operation, the effect has been that profitability has declined dramatically.

Central to the trade union plan was the proposition that the key to maintaining the profitability of the factories was to use to use the Government's billions of pounds of procurement budgets to place work with Remploy factories. This is something they are permitted to do by European procurement legislation. However, only a mere £2.5m of direct public procurement was placed by Government in the last year. It is the failure of government to use a small part of its enormous spending power to provide work for the factories that has created the vicious circle that makes them unprofitable, when in fact there is no question that the skilled and well-trained workforce has always produced high quality products.

Key arguments and the trade union answer

• The government says: by diverting money from subsidising Remploy workers, they will provide more funds to Access to Work. The average cost of AtW is £2,900 per person assisted, so this will lead to more disabled people in work than will lose their jobs at Remploy.

The TUC response

This is a thoroughly fallacious and dishonest argument and it largely misses the point.

The TUC has long campaigned for a very significant increase in the AtW budget, which assisted around 32,000 people stay in work last year. The budget is a tiny proportion of the DWP's spending, and to assert that only by making 1,700 people unemployed can money be added to it is grotesque.

Only a tiny proportion of the money 'saved' from Remploy is being added to the budget for Access to Work according to the government announcement (£5m a year for three years).

The existing AtW budget is actually underspent, as a result of the government itself restricting what it will now pay for. A dramatic reform and extension of AtW is required - but not as a trade-off against real jobs currently held by disabled people.

AtW does not, itself, create a single job - it offers financial support to employers to enable disabled people to get into, or retain, work. There have to be jobs there in the first place. After the last round of redundancies in Remploy four years ago, 80% of the former workers are still living on benefits: and that was before the impact of the recession on the jobs market.

But the most important argument is that the main reason for the continued reality that 50% of disabled people of working age are not in work is ignorance and prejudice from employers, and if the Government were to back the TUC's call for them to lead a campaign to challenge employers, the unions would gladly offer to help them in achieving this objective.

• The government says that disabled people support their plans and that Remploy factories are 'Victorian' relics of a time when disabled people were segregated.

The TUC response

This is the traditional 'divide and rule' approach, and what's more, it isn't true.

Some disabled people's organisations do support the Sayce review and want to do away with supported employment. But this argument suggests that disabled trade union members don't deserve recognition. Because the TUC Disabled Workers' Committee agreed a response to the consultations that rejected the Sayce arguments and so did individual unions. Our voice was not listened to: but our disabled members' views are as valid as anyone's in the charity sector.

For these disability charities, supported employment represents a survival from the age when disabled people were excluded and segregated - the goal has to be inclusion and participation. In fact, trade unions agree with the second argument. Trade unions too continue to fight for the ending of the discrimination and the removal of the barriers that mean that 50% of disabled people cannot find work in any sector. But fighting for inclusion in mainstream employment does not have to mean making disabled people who have jobs in supported employment redundant.

There are also disabled people's organisations that oppose the Sayce review and Government recommendations. For example, Disabled People against the Cuts (DPAC) and Inclusion London have come out in support of the struggle of the Remploy workers to keep the factories open.

One of the most sickening aspects of the Government's argument is their claim that they now support the 'Social Model' of disability. This is clearly intended as cover for their plans, since apart from the Remploy closure, their policies on benefit reform are driving hundreds of thousands of disabled people deeper into poverty.

What you can do

Trade unionists should rally urgently to the support of Remploy workers.

• Where there are local factories at risk of closure (see the Appendix), contact the local GMB, Unite or Community offices to find out about planned local campaigning activities.
• Support the petition against the closures that can be found on the GMB website at www.gmb.org.uk, and encourage your members to sign this as well, or the petition at the website of Unite, at www.unitetheunion.org.

Appendix

Remploy factories threatened with closure:

Aberdare, Aberdeen, Abertillery, Acton (London), Ashington, Barking (London), Barrow, Birkenhead, Bolton, Bridgend, Bristol, Chesterfield, Cleator Manor, Croespenmaen, Edinburgh, Gateshead, Leeds, Leicester, Manchester, Merthyr Tydfil, Motherwell, Newcastle, North London, North Staffs, Oldham, Penzance, Pontefract, Poole, Preston, Southampton, Spennymoor, Springburn, Swansea, Wigan, Worksop, Wrexham.