Disability Employment Support

Wednesday 7th March 2012 Written Statements

[The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)]

Today I am publishing a command paper, “Disability Employment Support: Fulfilling Potential”, which sets out the Government’s strategy for specialist disability employment programmes and includes a summary of the responses to the public consultation on the Sayce review.

Our strategy reaffirms the Government’s commitment to enable disabled people to achieve their full potential and support independent living, something at the heart of UN convention commitments. As a result of its importance and despite severe financial constraints, I have continued to protect spending on specialist disability employment programmes over this spending review, and I am determined to help more disabled people enter and remain in work. Crucially, savings from the policy changes I am announcing today will be used for more effective and proven employment programmes such as Access to Work to benefit many more disabled people. Liz Sayce made a number of recommendations to improve and expand Access to Work. We accept all of Liz Sayce’s recommendations on Access to Work, subject to further co-production with disabled people and employers to ensure that we get these right. I can confirm today that we have already implemented a number of these recommendations, including targeted marketing to small employers and under-represented groups. I can also announce today that we will make an extra £15 million available for Access to Work in this spending review period.

In addition, we will be conducting a further period of co-production with disabled people to identify how best we can support independent living through achieving the full potential of disabled people in the labour market. This will build upon the co-productive approach to developing the disability strategy.

I have agreed that the funding for residential training colleges should be extended until the end of the academic year 2012/13, to allow time to determine and implement future changes. They provide support into employment that is clearly valued, although costly, and we need to take further time to consider options for the future.

I have assessed very carefully the needs of the Remploy workers, as well as the needs of the 6.9 million disabled people of working age in Great Britain—who are, of course, the vast majority—who could benefit from greater specialist employment support to find and retain work.

The responses to the consultation on the Sayce review strongly endorsed the idea that money to support disabled people into employment should follow individuals not institutions and that Remploy factories should be set free from Government control.

They also supported the view the Government-funded segregated employment is not consistent with an objective of disability equality.

This is about equality and fairness for disabled people. Roughly 2,200 disabled people are supported by Remploy’s enterprise businesses, at a cost each year of around a fifth of the total budget for specialist disability employment programmes. Despite significant investment in Remploy enterprise businesses the cost of each employment place remains at £25,000 per year, compared with an average Access to Work award of £2,900. The Sayce review did acknowledge the valuable work undertaken by Remploy’s employment services in supporting tens of thousands of disabled people into work. Given the significant additional number of unemployed disabled people who could be supported to access the mainstream labour market, up to 8,000 people in this spending review, I have decided that it is important to accept and implement the Sayce review recommendations on Remploy. This will be done in two stages.

In stage 1, the Government will reduce its current subsidy to Remploy from the beginning of the new financial year so that we cease funding factories which make significant losses year after year and restrict funding to those factories which might have a prospect of a viable future without Government subsidy. Remploy’s board was asked to consider the impact of this decision before it was made.

As a result of the decision to reduce current funding the Remploy board is proposing to close (subject to consultation with their unions) by the end of this year the 36 factory sites (of 54) which it considers are unlikely to be able to achieve independent financial viability. Remploy will shortly begin collective consultation with its trade unions and the management forums on the proposed closure of these factories and on the potential compulsory redundancy of all the 1,752 people, including 1,518 disabled people, at these sites and associated with them.

Some factory sites, the CCTV business and Remploy employment services appear to be more likely to be able to continue to operate free from government subsidy as advocated by Sayce. In stage 2, the Department for Work and Pensions will work with the Remploy board to identify whether these potentially viable Remploy businesses can be freed from Government control, including by way of employee-led commercial exit and/or open market sales, and how this might be achieved.

I recognise that this announcement will be difficult news for the staff in Remploy factories and understand that they have will have concerns about the future. As part of collective consultation, the Remploy board will consider all proposals to avoid compulsory redundancy.

We are absolutely committed to supporting Remploy employees with an £8 million comprehensive personalised package of support for all those who are affected by these proposals. Any disabled member of staff who is made redundant will receive an offer of individualised support for up to 18 months to help with the transition from Government-funded sheltered employment to mainstream employment. This support will also include access to a personal budget to aid that transition. We will also be working with employers and the Employers Forum on Disability to look to offer targeted work opportunities for displaced staff. We will also establish a community support fund to provide grants to local disability organisations to support Remploy employees to make the transition from sheltered to mainstream employment.

If, after reform of Remploy is complete, it leaves Government, I anticipate that the Remploy pension scheme will run on as a closed scheme. The accrued benefits of members will be fully protected.

The Government’s commitment is to support many more disabled people into work, in line with their aspirations, at a time of severe financial restraint. The changes I am announcing today will enable us to support thousands more disabled people into work, including through significant improvements to the successful Access to Work programme. I believe that this strategy better fits the needs and aspirations of the 21st century—and a world where disabled people participate fully in the mainstream not in Government-funded segregated jobs.

I will place a list of the factories that will be the subject of consultation in the Library of the House.