Creative leadership needed for Remploy

March 8, 2012

The economic squeeze in the UK has hit Remploy, a government-backed scheme for people with disabilities, and a long-established component of the welfare system. The leadership dilemmas are clearer than satisfactory courses of action

The BBC takes up the story in March 2012

Remploy, which provides work for people with disabilities, is planning to close 36 of its 54 factories, putting more than 1,700 jobs at risk. Minister for Disabled People Maria Miller said the sites could be closed by the end of the year as they were not financially viable.

Remploy factories were established 66 years ago as part of the creation of the welfare state. Its workers are employed in enterprises that vary from furniture and packaging manufacturing to recycling electrical appliances and operating CCTV systems and control rooms. The government says “non-viable” factories should close, with the money, part of a £320m annual budget for disability employment, re-invested into other schemes to help disabled people find work.

It follows an independent review conducted by Liz Sayce, chief executive of Disability Rights UK, into the way in which the government spends its disability employment budget. Her report recommended that government funding should focus on support for individuals, rather than subsidising factory businesses. She recommended the cash should be diverted into the Access to Work fund, which provides technology and other help to firms for the disabled, whose average spend per person is £2,900.

The Department for Work and Pensions said about a fifth of that budget was currently spent on Remploy factories, but added that almost all of the factories were loss-making and last year lost £68.3m.

Remploy’s official website announced the change of policy [downloaded March 8th 2012].

The Remploy Board has proposed a series of significant changes to its operations as a result of the Government decision to reduce current funding for Remploy – this was announced to Parliament as part of a package of reforms to maximise the number of disabled people supported into work.Remploy will now consult with its trades unions and the management forums on the proposed closure in 2012 of 36 of its factories which it believes are not commercially viable, and on the potential compulsory redundancy of 1,752 employees directly or indirectly involved with these businesses.

During this consultation Remploy will consider all measures to avoid redundancies. Remploy will issue a consultation document on the proposed factory closures and will start discussions with the trades unions and the management forums to begin formal consultation on the proposals.

In the second stage, Remploy will work with the Department for Work and Pensions to explore whether the remaining factory-based businesses and CCTV contracts could exit from Government ownership and, if so, agree how this might be achieved.

Dismay and anger

Unsurprisingly, the story has been met with dismay and anger from those affected. One source with experience of the Remploy factories told Leaders we deserve “It’s a difficult one. Remploy started after the war [of 1939-1945] for disabled soldiers, but that’s changed over the years.”

Creative leadership

The debate will rage on. Many who engage in it will be close to the pain. Others will be close to deeply held beliefs about socialism, and the nature and level of state intervention. There is still space for creative leadership here.