Remploy

Gemma Doyle Excerpts

Thursday 15th December 2011 Westminster Hall

[Maria Miller]

The hon. Gentleman will know that the consultation talks about freeing Remploy from the control of Government and making sure that successful organisations can continue to thrive.

To return to the specific point that Members have addressed at great length, there are examples of local authorities and Remploy working together, but the problems in the factories will not be addressed by that alone. Article 19, to which Members have referred, is clearly a way to help public bodies use supported businesses, but it does not address the issue of value of money that procurement officers always need to consider, nor does it guarantee that Remploy will be given work in competition with other supported businesses.

The issues currently faced by Remploy factories are not new, and concern over the increasing cost, low productivity and sustainable jobs for disabled people has been an issue since the 1990s. The operating loss for the factories has increased into tens of millions of pounds, and the steps taken under the modernisation plan, which was rightly introduced by the previous Administration, including closing and merging 29 sites, has simply not addressed the fundamental weakness in the business model.

The right hon. Member for Cynon Valley mentioned my comment that I was minded to accept the consultation’s proposals. I want to make it clear that I have not yet made a final decision about the consultation, but I am persuaded that there is a need for change and that the Sayce review suggests a persuasive model for such change.

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

Is the Minister aware—I believe that she is—of the Blindcraft factory in Glasgow, which is a very successful supported employment workplace? Will she acknowledge that it is the business plan, not the business model, that is failing, as the management themselves acknowledged to her and me earlier this year?

[Maria Miller]

I thank the hon. Lady for her intervention. We have met on several occasions to discuss the issue. There are examples of areas where there can be success. Indeed, the hon. Member for Swansea West has walked the talk and made sure that the procurement issue has been uppermost in his local authority’s mind, and he has been very successful in that regard. There are opportunities for success, but the problem is that that success is not across the board.

I have already confirmed that the amount of money going into specialist disability employment is not the issue, because we have protected that pot of money. This is about ensuring that that money works hardest for disabled people. This is not about reducing funding; it is about using the money most effectively in whatever way that comes about. We have to consider those alternatives.

I have met Remploy trade union representatives on a number of occasions to discuss the matter. I have visited factories and listened to the views of employees, and I attended one of the consultation events in Reading in September. Let me restate that the Government’s commitment is to the five-year modernisation plan introduced in 2008. We are now in year four of that and those targets are not being met.

Last week, Remploy published independently audited annual reports and financial statements for 2010-11, which revealed that the Department for Work and Pensions spent £68.3 million supporting 2,200 disabled people in Remploy enterprise businesses at an annual cost of £25,000 per person. That is £5 million more than in 2009-10 and is more than 20% of the total budget available to help disabled people into work through the specialist employment budgets. We have to take a long hard look at the situation.

--- Later in debate ---

[Maria Miller]

That is extremely kind of the right hon. Lady. I have managed to race through most of the issues that I want to cover—I think that I have actually managed to cover almost everything raised by hon. Members.

[Gemma Doyle]

The Minister is drawing to a conclusion, but I do not think that she has mentioned the issue of bonuses, which we discussed earlier this year. She promised to look at the scandalous practice of management still collecting millions of pounds in bonuses. Has she decided to take action on that?

[Maria Miller]

The hon. Lady has raised the issue of bonuses before. I think I can remember either writing to her or perhaps replying in detail. It is vital that any business is run in a proper way. As an incoming Government, 18 months ago we took over a set of commitments that the previous Administration had put in place. That included many things including not only the modernisation plan, but the issue of bonuses for senior managers at Remploy. The performance incentive payments in the annual report—the statement made this year—relate back to 2009-10. The executive directors are contractually entitled to those payments, but, unfortunately, those contracts predate this Administration. The hon. Lady may know that there are legal issues that we have to be aware of. The Department has no power to limit bonuses, but from 2010-11 all Remploy’s executive team and senior managers have agreed to cap their bonuses in line with the senior civil service bonus cap. That was a particular request made by the Secretary of State, so that we can ensure that there is some—[Interruption.]