Remploy Factories

Esther McVey Excerpts

Tuesday 4th December 2012 Westminster Hall

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

It is a pleasure to serve under your chairmanship today, Mr Streeter. I thank the hon. Member for Glasgow North East (Mr Bain) for expressing his concerns passionately today. I hope that we have a constructive dialogue. I will bring him up to speed on everything that has been happening and that we have been doing on a daily basis. He and I have met and have spoken on many occasions, and I know how strongly he feels about the issue. I hope that he will give me credit for feeling as passionately and strongly as he does on the issue, and for working on it with my colleagues every day.

I shall start at the beginning—as they say, that is a good place to start—so that I can explain how and why the changes have come about. Obviously, amnesia has occurred among the Opposition about the closures, and the uncertain future, which have been going on for many years. In 2008, 29 factories were closed. A modernisation plan was put in place but failed, having set overly ambitious targets that were never achieved. As such, the factories became increasingly loss-making and their future became more precarious, which left all staff in a vulnerable position. The future must be about finding jobs for the employees and supporting them into mainstream employment. The issue is about sustainable jobs and a future with a job. That is precisely what we are trying to achieve.

The Government have committed themselves to protecting the budget of £320 million for specialist disability employment support. Governments of both parties have looked at the money going into Remploy factories and their future capability. One sixth of the entire budget has been going to Remploy factories, to 2,200 disabled people. Actually, there are 6.9 million people with disabilities of working age. We must look at what is best for all those people.

The hon. Gentleman gave incredibly negative figures, which I did not quite recognise. Remploy employment services, a different part of the organisation, has managed to find 50,000 jobs since 2010 for people with disabilities. In his constituency, 263 jobs were found in the past year. There are 44 disabled people in the Springburn factory, but we have to look at who we can help—and how best we can help them— among the 12,700 people with disabilities.

Without a shadow of a doubt, I understand how unsettling it must be for the people at Springburn, and that is why we have put in place a special £8 million package for personal help and support. It is the first time that has been done. No one tracked the staff in 2008, and no one put in a special package for them. There was no inadvertency when I mentioned the number of people from Remploy who had jobs. I answered accurately: the number was 35 people when we last met. I have been working on the matter daily, and I hope that the hon. Gentleman will be pleased to know that in the past few weeks, by changing on a daily basis, by looking at what has worked and by following best practice, we have quadrupled that to 129 people in employment. I am not saying that that is the best we can do, but by learning every day, we have considerably improved the number. Trust me—I will be following it up, and the number will get better.

[Mr Bain]

I do not doubt the Minister’s sincerity, but clearly, she must acknowledge that her plan is not working. The number of disabled people who are out of work is 63,000 higher now than it was a year ago. I welcome the fact that 11% of dismissed Remploy workers have now found some work, but what she has just announced does not scratch the surface of the jobs disasters for the disabled that she is presiding over. She must accept that.

[Esther McVey]

I do not accept that. I have explained clearly how many people we have found jobs for in the hon. Gentleman’s constituency in the past year and what we have done since then. Since the general election, 1 million new jobs have been created by the private sector. As I have said, the issue is about sustainable, long-term work.

I will give examples of what some Remploy staff have been doing. The numbers might be small, but they show that things are developing. Four former Remploy employees have set up their own co-operative business to undertake sewing machine working. They are now registered as a company and have been given advice and specialist training. They are opening their factory in Aberdeen. In Wigan, Red Rock Data Processing Services has started. It was set up by ex-Remploy managers, who have so far recruited two ex-staff in management positions. By Christmas, 16 people will be employed. In Oldham, four ex-employees have found work with Dekko Window Systems. People have also found work at Cornwall college in Camborne near Penzance, at Hayman Construction in Plymouth, and at Asda.

What we are seeing is what disability experts had envisaged: the issue is about mainstream work and having people work and fulfil their potential in every way. Where Remploy factories can remain viable, they will do. Where they can be bought out as co-operatives, they will be. Where we can have people working in mainstream work, we will support them as best we can.

[Jim McGovern]

The Minister has not yet covered procurement, but she has mentioned sewing machines. The Remploy factory in Dundee is based on textiles and fabrics and on manufacturing uniforms—

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[Jim McGovern]

I ask the Minister to make representations about uniforms to the Minister with responsibility for procurement, the hon. Member for Mid Worcestershire (Peter Luff), so that they can be produced in Dundee.

[Esther McVey]

I will indeed visit as many factories as I possibly can. I have been to several, and I have been up to Scotland recently—up in Edinburgh—so if I can and time permits, I will visit. Regarding procurement, I believe that a different Member now has that responsibility, but I will have a word with the relevant Minister.

Some right hon. and hon. Members have expressed concerns about the commercial process, but I am now satisfied that the Remploy commercial process has been open and transparent. It was published on 20 March on the Remploy website, which has communicated the outcome of the process at all stages and continues to do so. In the light of the assertions made by MPs, MSPs and the trade unions, I sought absolute assurances from the Remploy board that the commercial process for stage 1 was operated as published and that it allowed an equal opportunity for interested parties to submit a proposal for consideration. It is important to note that any assertions made—from all those who have made certain allegations—included no evidence of malpractice or wrongdoing as part of the commercial process.

The assurances provided by the Remploy board confirmed that: the commercial process was consistently delivered with equal opportunity for all interested parties, including in excess of five months for bids to be developed and submitted; the current preferred bid for Remploy Healthcare, excluding Springburn, remains the best value bid as a result of the commercial process; and the preferred bid will preserve the ongoing employment of 30 employees. The process was developed using expert advice on its design and structure, taking into account the need to ensure that employees and employee-led groups had an opportunity to take part actively and to develop robust bids. An independent panel was set up to provide independent assurance to the assessment process, because we recognised the need to ensure that proposals were robustly assessed. The panel played an active part in the assessment of bids at all stages of the commercial process.

To encourage employees and employee-led groups to take advantage of the opportunity, the Government made funding available, up to a maximum of £10,000, to be used for expert advice and support in developing proposals. The Government offered a time-limited, tapered wage subsidy, totalling £6,400, to successful bids for each eligible disabled member of staff as part of Remploy’s commercial process, again seeking to support the ongoing employment of as many Remploy disabled employees as possible. The offer of the wage incentive was a direct result of Remploy’s and the Department’s response to a number of proposals and of issues that were raised by bidders during the commercial process. To reflect such additional support, we extended the deadline for the submission of business plans, adding an extra three weeks to the time line.

Remploy’s preferred bidder for its Springburn factory put in bids for Springburn and for another of Remploy’s sites at Chesterfield. Unfortunately, Remploy has been advised by the preferred bidder that it no longer wishes to proceed with an offer for the Springburn site. There were no other viable bids for the factory, so it will now close. Remploy’s preferred bidder is, however, saving jobs at Chesterfield. The jobs saved might not be as many as people hoped for but, nevertheless, they are saving jobs. Without that bid, we are uncertain if there would have been a viable bid for Chesterfield. The design of Remploy’s commercial process has maximised the potential of the bids and proposals for the factories concerned but, clearly, that is not the end of the process. As with the factory in Wigan, where a new company has emerged, and in Aberdeen where a social enterprise has started, we are asking people to come forward with other bids and offers on how they would like to see the future of their Remploy factories, including Springburn.

I am grateful to hon. Members for raising the issues and for giving me the opportunity to set out what we are doing, how we are doing it and how best it can be done. I will continue to keep the House up to date with further developments for Springburn and other factories.

[Mr Bain]

For the record, can the Minister confirm whether she is happy to reopen the tendering process for the Springburn factory to allow other potential bidders to come forward? Given that, can she guarantee that no notices will be issued to workers before Christmas?

[Esther McVey]

The commercial process, which was robust and has been carried through, will not be reopened. As I explained, however, there is an opportunity now for people to come forward with their best and final offers, as with Aberdeen and Wigan. Equally, should Greentyre—as mentioned by the hon. Gentleman—wish to come forward, it may bid for the factory. That is what we are looking for and what we are doing with other factories.

The hon. Gentleman also mentioned article 19. Previous modernisation plans assumed a 130% increase in the Government procurement rules under article 19 but, in reality, that did not happen. Article 19 allows the use of sheltered employment to deliver services, but it has to be done in the context of value for money. If use of article 19 does not deliver value for money, it is not valid.

I hope that I have answered all the hon. Gentleman’s questions.

[Mr Jim Cunningham]

Will the Minister give way?

[Esther McVey]

We have a couple of minutes left, so I will take the intervention.

[Mr Cunningham]

Can the Minister publish the figures on people who have been made redundant from Remploy and found employment?

[Esther McVey]

I believe those figures are in the public domain. If they are not or if the hon. Gentleman needs clarity about them, I can provide them or break them down by factory.

If there are no more interventions or requests, I will come to a close. I know that the process will be long and that we are all passionate about the issue because we all want to see the best solution and conclusion possible but, as I have said in the past, all channels of communication are open. Not only do I meet with MPs, trade unions and MSPs, but I also work with ex-employees of Remploy.