The problems at Remploy
by Claudia Wood
I blogged in June 2011 regarding the eminently sensible Liz Sayce review. It was hard to disagree with her conclusions – that disabled people should have equal access to all forms of employment, and therefore funds used for subsidised or ‘sheltered’ employment (which only offer a limited range of positions to disabled people) should be diverted instead to Access to Work. Access to Work, which helps pay for workplace adaptations and equipment, has been shown to improve disabled people’s job prospects so much that every £1 spent on the scheme saves £1.48 in welfare support.
The inevitable outcome of the government accepting the recommendations of the Sayce review – that Remploy factories would be closed as the last bastion of subsidised employment – must be supported. It’s a matter of numbers. Supporting people in the Remploy factories costs £25,000 per year. The average Access to Work spending is £2,600 to enable a disabled person to get into a non-subsidised, non-segregated position. Sayce calculated that for the same price as keeping the 2,300 Remploy workers in work, the Government could support an extra 35,000 people get in to mainstream positions.
And the numbers are backed by an in principle argument – our aspiration for disabled people should not be to segregate them and place them to work in ‘sheltered’ factories, but for them to have the same opportunity to access a full range of employment like everyone else, with adaptations and equipment as required.
But in spite of all of this, I still can’t fully welcome the closure of the Remploy factories. In this economic climate, those made redundant when the factories close will find it extremely difficult to find another job. They are at the back of a very long queue of 2.67 million unemployed people. Perhaps the Government did the numbers too – a year claiming ESA amounts to £5k, which is still cheaper than the cost of supported employment for a year. But what about a lifetime of unemployment, and the costs to health services associated with the mental and physical effects of long term unemployment? We must then add the cost of decommissioning the factories, and paying redundancy pay to the employees and securing their pensions (assuming the Government will honour these standard employment rights).
It’s understandable why opponents of the closure think there may be a false economy in making 1700 people redundant when millions are being spent on welfare benefits and welfare to work support. They will need further reassurances.
For example, how, exactly will the additional £8 million provided to help the redundant Remploy workers be used to transition to mainstream employment? That only works out at about £4,700 for each of the 1700 people being made redundant – not a significant amount if you consider the costs of the Work Programme: it wouldn’t cover the fee offered under the Payment by Results scheme for ESA claimants. These people have been working, many full time, for an extended period – they should in theory be the easiest to place among their peers who may well have been unemployed for years. With this in mind, and to prove their oft-quoted statement that ‘there are plenty of jobs available’, the Government should perhaps make a guarantee that the Remploy workers will have been found another job within a year. If we were in rosier financial times, I would suggest some form of responsibility deal could be brokered with similar employers to recruit the Remploy workers who, after all, are already skilled up and ready to work.
Then the most important question – how much of the funding saved from the closure of Remploy will be invested in Access to Work? The additional £15 million announced for an expansion of Access to Work this week is clearly less than the £42.5 million or so being saved from the Remploy closure. Should more be ploughed into this scheme, or perhaps into other steps to help disabled people compete for jobs on a level playing field – such as an expansion of the Work Choice scheme, currently reserved for only those with the most complex needs but shown to be extremely successful in getting disabled people into sustainable employment?
In spite of the numbers, and in spite of the principled objections we might make against subsidised employment, the closure of the Remploy factories just seems difficult to swallow. The government will only triumph if they can prove Liz Sayce’s point – that subsidised employment is not as effective as Access to Work. And that means getting the 1700 Remploy workers into a mainstream job, with the help of Access to Work funding, asap. Leaving them to swell the ranks of ESA claimants and subject to ‘scrounger’ rhetoric just won’t wash