Disability Employment

Thursday 6th December 2012 Written Statements

[The Parliamentary Under-Secretary of State for Work and Pensions (Esther McVey)]

I would like to make a statement on Remploy to update the House on the next steps in the reforms that my predecessor as Minister for Disabled People, my right hon. Friend the Member for Basingstoke (Maria Miller), set out in this House on 10 July 2012, Official Report, column 167.

The Remploy board is today making make an announcement, and is quite rightly informing all those employees whom it affects.

The Remploy board has now concluded its assessment of the stage 2 businesses. It has been working closely with the Department for Work and Pensions and independent business analysts to explore in detail whether the remaining factory based businesses (automotive, automotive textiles, e-cycle, frontline, furniture, marine and packaging), CCTV contracts and employment services could viably exit Government ownership and if so, how this could be best achieved.

Further work is being undertaken on employment services and a separate announcement will follow when a decision has been made.

The Government have decided to confirm the exit of stage 2 factories and businesses, and the Remploy board has today announced the results of its analysis and its proposals for a commercial process for stage 2 factory businesses and the CCTV business.

The automotive business operating from factories in Coventry, Birmingham and Derby is considered by Remploy to be a viable business. It has the potential to successfully move out of Government-funded support as a going concern. Remploy will now move to market this business, there is no proposal to close this business and staff at these sites are not formally at risk of redundancy.

The automotive textiles operation at Huddersfield is not commercially viable and the factory there is proposed for closure. All staff in this business are now at risk of redundancy.

The furniture business based in Neath (Port Talbot), Sheffield and Blackburn has the potential to be commercially viable but would require significant restructuring consideration and downsizing of its operations. Remploy will market this business as a prospective going concern, while recognising that the current trading position of the business may ultimately result in no viable bids being received and that there may therefore be consequential redundancies and factory closures. All staff in this business are now at risk of redundancy.

The marine textiles business (based at Leven and Cowdenbeath) has an established market position and might attract commercial interest. Remploy management will discuss any potential opportunities for a commercial exit with its current distributor and any other parties who express an interest. However the business currently makes significant losses and is not saleable currently as a going concern. The employees of the marine textiles business are therefore at risk of redundancy.

The CCTV business has the potential to become a viable business or series of businesses and successfully move out of Government control. Remploy will now discuss with the 27 organisations who have let contracts to Remploy their intentions and the opportunity to market this business and its 27 contracts as a going concern. If the business can be sold it may result in potential TUPE transfers. In the event that it cannot be sold compulsory redundancies will be made and all employees in the CCTV business are therefore at risk of redundancy.

In addition to automotive textiles, three other Remploy businesses are not commercially viable or have little realistic prospect of being sold as going concerns. These are e-cycle (based at Forth and Heywood), frontline textiles (based at Dundee, Stirling and Clydebank) and packaging (based at Norwich, Portsmouth, Burnley and Sunderland). These factories are now proposed for closure with all the staff working there and at the associated business offices at risk of redundancy

As a means of reducing the number of potential job losses Remploy will, from today commence a commercial process and invite expressions of interest from any individuals or organisations who would like to buy all or parts of these businesses or sites proposed for closure. They will also be inviting expressions of interest for the assets associated with these sites, although “going concern” business sales will take precedent over asset sales.

As a result of these proposals a total of 875 employees including 682 disabled employees in the automotive textiles, e-cycle, frontline textiles, furniture, marine textiles, packaging and CCTV businesses are being placed at risk of compulsory redundancy.

If a successful sale or transfer of ownership is possible and such sale or transfer falls within the provisions of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), employees employed in or assigned to the relevant businesses will transfer to the new owner under TUPE. However, if TUPE does not apply, the number of employees who may transfer to the new business cannot be guaranteed as this will be a matter of negotiation between the bidder and Remploy.

It is important to note that no final decisions have been made about the factory closures or about redundancies in stage 2 factories or businesses at this time.

I expect the process for exits or closures to have been completed by October 2013.

To encourage bids that maximise the continued employment of disabled people, the Department for Work and Pensions will offer a three-year tapering wage subsidy totalling £6,400 for each eligible disabled member of staff. In addition Remploy will also fund professional advice and support worth up to £10,000 for employee-led bids. This is in line with the offer of support in stage 1.

Remploy’s automotive business will continue to operate business as usual. There is no proposal to close this business at this stage.

Remploy employment services business will also continue to operate business as usual.

The Government have made £8 million available for 18 months to fund the delivery of a people help and support package across the UK for any disabled individuals who are made redundant. This tailored support from the people help and support package includes access to a personal case worker to help individuals with their future choices and a personal budget for additional support.

We will use the expertise of Remploy’s employment services which, despite difficult economic times over the last two years, has found jobs for around 50,000 disabled and disadvantaged people.

We are working with Remploy employment services, local and national employers, and the Business Disability Forum (BDF) to offer targeted work opportunities for disabled people. This could include guaranteed interviews, work trials, industry sector specific training, pre-application training (including mock interviews), on the job training and employer training in how to make adjustments for particular impairments.

We have also set up a community support fund to provide grants to local voluntary sector and user-led organisations to run a variety of projects to support disabled Remploy employees and their families.

Of the 1,349 disabled people affected by the factory closures, 875 have expressed an interest in returning to work and are actively using the support package, so the latest results mean that just under 15% of those are now in work. It is one of our top priorities to maximise employment opportunities for the Remploy factory leavers.

This is an ongoing process, and as it develops, I commit to keeping this House updated on the status of the business plans going through to the next stage. I will provide a further update on progress in the new year.