At the request of GPTU a letter was written to Peter Hain re Remploy factory closures, read it and the DWP reply below.
To Peter Hain MP, Secretary of State for Work and Pensions
Dear Mr Hain
The Green Party, the Green Party Trade Union Group amongst many others have supported the campaign against closure of Remploy factories by their workers and Unions
Councillor Becka Thackeray, a speaker from GPTU and other GP members supported the Remploy demonstration at the Brixton factory earlier this year and after we heard reports from the Labour Party conference we told our London Federation of Green Parties’ AGM that we had some cautious optimism that the Brixton factory at least was saved.
We now are very saddened to learn that this is not so and that Unions have expressed concerned to ministers that no assessment has been made to whether disabled employees in 28 factories to be closed can be placed into mainstream employment contrary to assurances given at the Labour Party Conference in Bournemouth.
GPTU supports the Unions demand that the officials discuss the way the company is being managed, as the workforce have lost all confidence in the existing management. We also fully support the Remploy workers who “stand to lose not only their jobs but their dignity and future security”.
Peter Murry ( Secretary GPTU)
DWP: Department for Work and Pensions
Ministerial Correspondence Unit, Adelphi, 1-11 John Adam St, London WC2N 6HT
Mr P Murry
Secretary, Green Party Trade Union Group
18 a Oxgate Gardens,
Our reference: TO/08/00050
Date: 22 February 2008
Dear Mr Murry
Thank you for your letter of 20 December 2007 to Peter Hain concerning Remploy. As you can appreciate, the minister receives many enquiries a day and it is not possible for him to answer them all individually. I have been asked to reply and apologise for the lengthy delay that has occurred.
It may help if I first explain the background to the Secretary of State’s announcement to the House on 29 November, concerning the future of Remploy. Following the National Audit Office’s report in 2005 and the independent report by PricewaterhouseCoopers and Dr Stephen Duckworth of Disability Matters last summer, Ministers asked Remploy to develop a new five-year restructuring plan. This was to modernize the business, avoid compulsory redundancy for Remploy’s disabled workers, support substantially larger numbers of disabled people into mainstream work, and stay within a funding envelope of a £555 million taxpayer subsidy over five years, to ensure that escalating costs do not put at risk funding other Department for Work and Pensions programmes for disabled people.
Without modernisation, Remploy deficits would financially undermine our other programmes to help disabled people into mainstream work. With no change, in five years’ time Remploy. Would require £171 million a year on current trends. That would be £60 million over the £111 million funding envelope, which represents the entire annual current WORKSTEP budget. The trade unions and the company are both in agreement on the overall funding envelope £555 over five years. Remploy’s new five-year funding will begin on 1 April this year.
In his speech to the Labour Party Conference25 September, the Secretary of State highlighted the lack of progress that had been made during the consultations between Remploy and their trade unions for this reason he asked Roger Poole, a former Assistant secretary of Unison to help find a solution.
The Secretary of State also advised Conference that no factory closures would take place without the agreement of government ministers and gave a categorical assurance that there would be no compulsory redundancies for Remploy’s disabled workers and that they would retain the protection of Remploy’s terms and conditions, including, uniquely for workers facing plant closures or transfers, their salaries and pensions. All of these commitments have been met.
Substantial progress was made during the course of negotiations between Remploy and their trade unions under the chairmanship of Roger Poole. Although the negotiations concluded on 22 October with a formal failure to agree, they nonetheless represent a significant step forward since Roger was appointed in august. In particular, the talks identified common ground on the following points:
· agreement on the funding envelope £555 over five years ;
· the need for both employment services and factory provision;
· fewer factory closures;
· the importance of gaining more public sector contracts;
· the importance of local initiatives in securing the future of Remploy factories by winning more public and private contracts, led by factory managers, trade unions, constituency MPs and other local stakeholders.
· the need to reduce management and other overhead costs;
· the need to improve working practices, saving £10 million over five years;
· the need to dramatically improve industrial relations.
The Secretary of State considered both the company’s final modernisation plan and those from the trade unions. The final proposals announced represent the best package for Remploy’s disabled employees in difficult circumstances. Three will be 17 factory closures and 11 mergers with other factories, down from the 32 closures proposed in May.
The sales target for public procurement will increase to £461 million over five years, up from £298 million since the company’s proposals in May. That is a huge and challenging 130m per cent increase over the current rate of sales of £200 million. There will be a total cost saving of £59 million from around 25 per cent, fewer managers, changes in current working practices and reductions in on-wage costs.
It will be up to everyone with an interest Remploy, that is the government, national and local management, trade unions, Local MPs and other political representatives, to pull together to ensure that those factories meet their ambitious targets, otherwise they too, could be put at risk.
In his announcement, the Secretary of State made clear that there would be a top-to-bottom restructuring and re-skilling within the company. Already, they have agreed to a structure for a local public/private procurement business for most of the saved sites.
The plan announced will deliver a new beginning for Remploy requiring a radically new approach across the entire operation that must include better management and better union relations.
The Secretary of State advise the House that if management, trade unions, MPs or other local stakeholders can come up with a credible option for a trade unions take-over or transfer to a third party at an affected site, then Remploy would do their best to help facilitate this.
The Remploy Board’s plans to modernise Remploy includes 15 fewer factory closures than originally propose d by the company on 22may and that continuation of 55 Remploy factories, subject to satisfactory progress towards achieving an acceptable cost per disabled employee. The company will also quadruple the number of disabled people it supports into mainstream work through its Employment Services business. It will be placing 20,000 disabled people into work by year five of its modernisation plan.
I know people are disappointed that we are unable to keep even more factories open, but the reality is that it is simply not viable. The sooner the process of modernisation begins, the greater the opportunity to maximize the number of additional factories that can be kept open.
Mrs H Payne