Oral statement to Parliament

Oral statement on Remploy

Statement by the Parliamentary Under Secretary of State for Disabled People about Remploy.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The Rt Hon Esther McVey

With permission Mr Speaker, I would like to make a statement on Remploy.

Today’s announcement by Remploy means that jobs for approximately 70 per cent, 515 of the disabled employees in the remaining Remploy factories and CCTV sites, could be saved through the commercial process.

This is because these sites and businesses are subject to final negotiations with preferred bidders to take over the businesses.

I know that hon. Members will agree that our first concern must be Remploy employees, who have been informed about the latest decisions of the Remploy Board today.

234 disabled people are now at risk of redundancy and will take part in individual consultation with Remploy.

All employees affected will be supported by the £8m tailored package of support to help them move into mainstream work.

If I may remind the House, the Government announced in March 2012 that we would implement the recommendations of the Sayce Review, to withdraw funding from Remploy factories and redirect it to enable more disabled people to get jobs in the labour market.

We have always made it clear that this is about supporting the individuals in the factories, and disabled people across the country. £50 million was going into funding failing factories which meant £50 million not available to support disabled people across the country.

As announced in the Spending Review, the Government further committed to continuing to support disabled people to move into, remain in, and progress in work.

I tabled a written statement on 6th December 2012 to inform the House that the Remploy Board had commenced Stage 2 of its commercial process. The aim of this was to transfer the remaining 7 businesses, in 18 factories, and the 27 CCTV contracts across the UK, potentially affecting 1,016 employees.

The Remploy Board identified three of these businesses as potentially viable and appointed KPMG, as a professional agent, to manage the sale of the CCTV, Furniture and Automotive businesses.

Of the 27 CCTV contracts, 17 are subject to the commercial process and KPMG, appointed by Remploy, are currently working through that process which it hopes to complete shortly.

I am pleased to be able to tell you that 8 of the remaining 10 contracts have either been taken back in-house by the Local Authorities or moved to alternative service providers. This means around 50 employees will or have transferred to new employers.

It is likely that the remaining 2 contracts will be terminated.

I can also confirm, in addition to CCTV, that the furniture businesses based in Port Talbot, Sheffield and Blackburn remain in the commercial process.

Mr Speaker, I can confirm today that Remploy has received a number of good quality innovative bids for its Automotive business.

Over the next few weeks KPMG will be continuing commercial discussions with a number of bidders who have expressed an interest in acquiring the whole business and all the 217 employees including 179 disabled employees based in sites in Birmingham, Coventry and Derby. They aim to have identified a preferred bidder in a matter of weeks.

I will provide further written updates on progress when details become available.

I can confirm that offers have been received for the E-Cycle business which has factories based at Porth and Heywood. I am pleased to say that the E-Cycle business will remain in the commercial process as Remploy begin to work with the preferred bidder, with the aim of completing a sale for this business by mid-August.

Following independent and expert advice, Remploy have carefully considered ‘best and final’ offers received for the three other businesses - Frontline Textiles, Marine Textiles and Packaging.

Remploy, together with an independent panel of experts including KPMG, have assessed the viability of these ‘best and final’ offers against a series of published criteria including: the continued employment of disabled people; value for money; and the sustainability of the businesses.

Our priority throughout this process has been to safeguard jobs, which is why we offered a wage subsidy of up to £6,400 per disabled employee to encourage interested parties to come forward.

Despite having had considerable interest in the Marine and Frontline Textile businesses at Leven, Cowdenbeath, Stirling, Dundee and Clydebank, Remploy did not receive a Best and Final Offer for these businesses as part of the commercial process.

Additionally there are no viable bids for the Packaging business based at, Norwich, Portsmouth, Burnley and Sunderland.

These sites will now move to closure and all 284 employees at the Packaging, Frontline and Marine Textiles businesses, including 234 disabled employees will, in line with Remploy’s redundancy procedures, be invited to at least two individual consultation meetings over the next 30 days to discuss the options and the support that will be available to them.

Our experience with Stage 1 shows that businesses like textiles which didn’t have commercial interest and closed afterwards re-opened as social enterprises or new businesses, and in fact nine sites have been sold on that basis. This has resulted in employment opportunities for original employees.

For example, businesses have opened under new ownership in the Bolton and Wigan factory premises, who are looking to create up to 35 job opportunities for disabled people, including former Remploy employees.

In addition Remploy have confirmed already they have received an asset bid from a Social Enterprise organisation for the purchase of assets from within the Textiles business. This may have the potential to create employment opportunities for disabled people.

For all disabled ex-employees, we have put in place a People Help and Support Package to provide a comprehensive range of support for all disabled individuals made redundant as a result of Remploy factory closures.

This tailored support is available for individuals to access for up to 18 months after their factory closes and includes access to a Personal Case Worker and a personal budget, to help individuals with their future choices.

I can confirm that the Personal Case Workers have already begun engaging with employees at Stage 2 Remploy sites and this has provided an important opportunity to give individuals who are currently at risk of redundancy the information they need about their options, and the support that will be available to help them to make the transition from working at Remploy in to mainstream employment.

We will continue to do everything we can to support them in finding new jobs.

We have also built into this package a Community Support Fund to provide grants to local voluntary sector and user-led organisations to run social job club projects to support disabled Remploy employees and their families.

32 organisations have already been awarded funding supporting 748 ex-Remploy employees locally.

There has been a welcome success of this process during Stage 1, in terms of the number of disabled former Remploy staff who have found alternative employment. We have every expectation that job outcomes following engagement with the support package will achieve similar results during Stage 2.

As at 28 June 2013, 1,103 disabled former Remploy workers are choosing to work with our Personal Case Workers to find another job.

Currently 400 people are in work and a further 328 disabled former Remploy workers are on Work Choice undertaking training and other activities aimed at moving them closer to employment.

Can I close by confirming I have written to all affected MPs and Parliamentarians inviting them to a briefing session today at 4.30pm in Room S, Portcullis House.

I commend this statement to the House.

Published 4 July 2013