New Year brings new challenge for Remploy – can procurement help?

Remploy* is the UK's leading provider of employment services and employment to people experiencing complex barriers to work (largely those with disabilities of various kinds).

It is an unusual beast in that it sits as an 'non-departmental body' reporting into the Department of Work and Pensions, yet acts in most ways very independently.  It has to, given that it now competes on a level playing field with other providers to win contracts from DWP and other public bodies.

There are two divisions within Remploy; one contains 50 factories producing (or packing)  everything from car components to packaging, furniture to confectionery.  The other division runs an employment services business, helping disabled and other disadvantaged groups to find work with a wide range of companies in retail, hospitality and many other industries.

That Employment Services business has been very successful for the last few years, and recently was included both in its own right and as a partner with Balfour Beatty on the DWP welfare to work framework as we reported here. The outlook is very good for Employment Services, although some (including competitors) would no doubt question why the operation needs to be attached to DWP at all.

But the latest Remploy annual report - published here just before Christmas - shows a less happy situation for the factories.  Despite a lot of work to generate more sales, particularly from other public sector bodies (and thanks are due to many procurement people who have tried to help here), each of the 3,000 or so disabled people working in a factory requires in effect a subsidy of around £23,000 a year from the taxpayer.  Arguably more shocking is this (from the Chairman's statement);

"Whilst some of our factories are busy, others are under-employed and some 50% of our factory-based staff have little or no meaningful work"

Given the great success Remploy and other organisations have had in helping disabled people into real jobs in real firms (Sainsbury, BT, Asda, Royal Mail just to name a few), and the state of the public finances, is this a situation that should continue?  Should Remploy have another drive on sales; could the procurement community help further by looking to put more business through Remploy factories ?  Or is that a vain hope - goodness knows, Remploy sales teams have worked very hard to drive this for the last 2 years or more, and the accounts show the results only too well.

The basic question is this.  From both an economic point of view, and in terms of the welfare and best interests of the factory staff, is it right that the taxpayer is contributing so much money every year to the factories (over £60 million) without even providing meaningful work for around 1,500 people (half the total number)?

Will we be able to answer that key question in 2011?  I hope so - but we'll see.

*I've been a non-executive Director at Remploy since 2008.

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Voices (2)

  1. Peter Smith:

    Good questions Christine. ‘Meaningful’ is generally something that has some commercial value, however small i.e. not just keeping an idle factory clean.
    And plan B – if indeed there were to be any change in the factory set-up – would be to use Remploy’s excellent Employment Services arm to find people jobs in mainstream organisations. It’s interesting, if you talk to big retailers for instance, they would happily recruit more people with certain disabilities because they find they are highly motivated, loyal, dependable, hard-working – a lot more so frankly than the casual ‘student’ type employees they also use a lot! That’s not to say everyone currently working in a Remploy factory would walk into a job with Sainsbury tomorrow; but a lot could. (Some I’ve met would walk straight into skilled manufacturing jobs in fact).

  2. Christine Morton:

    How is “meaningful” defined in this context, as what is meaningful to one may not be to another?

    And what is the “plan B” for all of these people if the scheme is wound up? Will that have a more costly impact on other areas of social services without a resultant increase in productivity?

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