Remploy factories to close – could more public procurement save them?

The announcements recently about Remploy (the UK government owned organisation that supports employment for disabled people) closing factories got considerable press and some extremely one-sided reporting. The procurement angle was also poorly explained or covered in the national press reports, so with some hesitation I thought I’d jump into the debate.

I was a non-executive director of Remploy from 2007-2011. Obviously, the full dramatic story of that time will have to wait for my autobiography, scheduled to hit the best seller lists around Christmas 2018, but there are some important points I can make hopefully without giving away any privileged or confidential information. Much of this – and a lot more – is in the Sayce report on disability employment support,  which was published last year – the author, Liz Sayce is a prominent campaigner on disability issues.

1.            While the closure of factories is very sad for the staff involved, the business continues to haemorrhage cash which could be used much more constructively to help disabled people. The loss last year was equivalent to some £25,000 per disabled person employed.

2.            Half the people in the factories have nothing to do. Literally. It’s not evenly spread, so actually some staff are pretty busy most of the time, while others spend the vast majority of their time drinking  coffee, playing cards,  basically doing nothing... That’s not good for anyone.

3.            There is a lot of evidence now that placing and supporting disabled people in organisations alongside all sorts of other people is better for their health, welfare, careers...  the factories, being brutal, can become ghettoes for disabled people. The Sayce report said: ‘In relation to Remploy factories there was a total consensus among disabled people’s organisations and charities that the factories were not the model for the 21st Century, and that Government funding should be invested in effective support for individuals, rather than subsidising factory businesses’.

4.            The “employment agency” division of Remploy has had huge success in getting thousands of people jobs in all sorts of organisations – the public sector, Sainsbury’s, BT... And that includes people with all sorts of disabilities. As far as I can see, there is a strong commitment to putting significant money into finding real jobs for the Remploy factory staff involved. And while people will say “there are no jobs”, the evidence is that Remploy, with the support of the organisations who already work with them, can and will get a very high proportion of the factory staff into jobs. There was a great quote from Sayce here – “I do not understand why we say disabled people can only work in businesses that are so loss-making. Why can’t they be part of successful businesses?”

5.            Please don’t say “we can get public sector procurement to buy more Remploy products to save the factories”. That has been tried for years and is one of the main reasons I was appointed as a non-exec – to help with that approach. Frankly, we failed. The growth needed just isn’t feasible given the product range produced, not helped by the financial situation in the public sector.

6.            Many people worked very hard on generating more sales – not least the DWP commercial team – who did a great job pushing colleagues in other public bodies and suppliers to DWP to do what they could to help. Some public bodies were highly supportive; others less so. Thanks to those who did help – you know who you are. But I can only say that in my experience, everyone did everything possible to try and get more business for the factories – it’s not for lack of effort that they’re under-utilised. And frankly, if the Unions don’t believe that, and blame all this on incompetent Remploy senior management and Board, then let the unions take over the factories. Seriously.  That is an option – the door is open I believe for interested parties to make offers to take over the businesses.  But at the end of the day, you can’t force a school to buy Remploy furniture if they don’t need / want it.

So, all in all, this is a very complex and emotive issue, with strong arguments on both sides. I didn’t ever meet Maria Miller, the Minster now involved, so I can’t comment on her personally, but I do know that the Board and senior managers in Remploy will have looked at all the options very thoroughly, and while this will be awful news for some staff, I believe it is the right decision.

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Voices (3)

  1. Paul:

    The DWP Commercial Team did a great job in generating more public body spending? Not in my experience when I worked for Remploy.
    When an MP was asked for help in generating more inter-departmental business within the Government spend Remploy was told this could be facilitated. Starting with a champagne reception at the House of Commons, cost circa £20,000 to the taxpayer– of which the company was assured that Vince Cable (Mr Austere, and as it turns out, a big fan of champagne) and Danny Alexander would be delighted to attend.
    The annual exhibition was a massive cost and a waste of money. It did tell other Remploy employees about it’s good work and success stories, but did not invite a single customer or prospective customer to promote itself– talk about an opportunity missed.
    Remploy has been a badly run organisation, with senior management running scared of the Unions. Example: – offering a £25K out of court settlement to a Union rep,….. (comment edited – sorry, don’t want to get sued!) Both management and the Unions should hang their heads in shame at how they have let down the genuine people there who will now lose their jobs and wasted taxpayers money.
    The salaries and bonuses of the senior Directors are obscene and numerous failing managers are on significant salaries of £70K pa
    My heart goes out to the decent folk who did their best and added value where they could. For all the wasters the company employs – and there are a lot of those – they deserve all they get.

  2. Sam Unkim:

    250,101 Items in the NHS Supply-Chain catalogue.

    0 from Remploy Healthcate Ltd Items

    Nuff said ..
    and before any pedants jump in, yes I know there is a “framework” for 633 Orthotic Lines.

  3. Dan:

    Interesting read; its good to hear a different viewpoint on this.

    Our management team are very keen on employing supported workshops, even if in only a small capacity. While commendable, its certainly a headache from a procurement point of view.

    We’ve also brought a sheltered workshop in-house, with a view to cutting its deficit. If you have any opinions on how we can create a responsive, customer-focussed supply chain that can compete with the best of the private sector, all the while complying with OJEU rules regarding frameworks and contracts, I’d be glad to hear them….

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