Scottish Affairs Committee rejects Government plans for Remploy sell-off

26 June 2013

MPs fear process will simply descend into factory closures and asset-stripping.

In a report published on Wednesday 26 June, ahead of the expected decision by the Remploy board on bids for Marine Remploy Fife, the House of Commons Scottish Affairs Committee says that the Department for Work and Pensions, and the Remploy board, have hampered the prospects for the future of the business by their inflexible approach and lack of support.

Transitional arrangements

The Committee says that even at this late stage, the Government can and should instruct Remploy to extend the timescale for bids for the business, make more appropriate transitional arrangements available and ensure that social enterprises, mutuals and co-operatives are able to participate in the bidding process.

Following a review of disability employment support in 2011, the Government announced its intention to reduce and ultimately withdraw funding for Remploy.  36 factories were sold or closed in the first phase of this process. In December 2012, it was revealed that the remaining factories would be put up for sale and the Government invited bids. This included Remploy Marine Fife.

Sustaining the workforce

One of the central criteria by which bids for the Remploy sites will be judged is sustaining the workforce in employment. The Committee says this is vital, and that the wider social context must be included in the assessment of “the value for money” offered by the bids, but the Government has shown no sign of taking this point into account. The timescale and transitional support offered for the changes have been inadequate and inflexible.

The short timescale —January to March 2013—and Remploy insisting that bidders sign confidentiality and non-disclosure agreements before proceeding to the third stage of the process have made it extremely difficult to collaborate with social enterprises or co-operatives in order to try to keep the factories as going concerns. The Government has offered very little in the way of transitional support for the Remploy businesses as funding is withdrawn and the Committee is concerned that the process will simply descend into a series of factory closures or asset-stripping.

Member's comments

Lindsay Roy MP for Glenrothes and Central Fife said:

“Remploy was created as a means of finding employment for disabled people. While we understand the reasoning behind moving the factories away from public ownership its original mission should be preserved. The Government must focus on the social value of maintaining jobs for disabled people, and must pay more attention to the wider financial and social costs of the potential closure of such sites.

“Remploy Marine Fife is an internationally recognised business producing 30,000 lifejackets a year. It has a full order book, and some capacity to expand. Its products have an international quality Kitemark. The markup  - apparently over £100 - applied by the factories’ customer, Ocean Safety, seems exorbitant and is difficult to justify. The Government should look again at how Remploy agreed this contract on such generous terms for the client. We believe this business has considerable potential and should be supported accordingly. We must maintain this  high quality manufacturing base in Fife, otherwise it is likely that it – and the design and expertise developed here  - will be transferred overseas. A “one size fits all” approach does not take account of the unique circumstances and potential of Remploy Marine Fife.

“Bearing in mind the social value of Remploy, we reject the DWP and Remploy’s unyielding, inflexible approach and failure to offer adequate transitional support. We expect the outcome of the bidding process to be weighted towards maintaining Remploy sites as viable businesses, and especially to fulfilling the promise which we believe Remploy Marine Fife possesses.”

Further information

Image: iStockphoto 

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