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INTRODUCTION
A REPORT COMPILED BY REMPLOY DISABLED WORKERS AND THEIR REPRESENTATIVES
In late 2005 the Government’s Audit Office issued a report which called for a review of government’s finance was best used in the employment of disabled people. The Audit Report was critical of the factory structures within Remploy and stated that some of the present businesses were unsustainable.
On the 16th March 2006 the Secretary of State, John Hutton announced that a review of Remploy would be carried out independently by appointed consultants and independent disability expert, Stephen Duckworth.
By the end of March 2006 the government had appointed consultants, PricewaterhouseCoopers and a team lead by Julie Mellor
The GMB under the leadership of
The Shop Stewards first looked at the National Audit Report and from the outset it was clear that the members of the Public Accounts Committee and the National Audit Office had not been given the correct and accurate information to enable the NAO Report to conclude accurate findings.
The admission on Page 2 of the NAO Report that “assessing the value for money of provision is difficult, but the long term benefits appear to outweigh the costs of provision for many people”. Further on Pages 2 and 10 the report states “assessing the success of provision is harder because data for some programmes and schemes is either incomplete or unreliable”.
The trade unions reject the assumption that the unit cost of employing a disabled person within a factory is £18,000 per disabled person. Within this figure is the senior management costs and also some very unrealistic costs. We also disagree with the Audit Report’s calculation that Interwork only costs £3,400.
The Trade Unions dispute the National Audit Office Report’s finding that “Many Remploy businesses are not really sustainable in purely economic terms, although they offer a very supportive environment to their employees.” Our view is that the factory businesses have been loaded with corporate and other costs in order to make those businesses appear in a poor light. Similarly, Interwork financial data has been presented in such a way as to suppress the actual costs of that operation and to make it look like value for money. We have already challenged that presumption on a number of grounds.
The Trade Unions expect the Review Team to have forensically analysed the accounts to determine the actual costs of all the business streams rather than simply relying on the veracity of the information supplied by the company. Conversely, we would be more than disappointed if a forensic examination of the accounts had not been carried out.
We need a change of Board.
The Board of Directors has flip-flopped from one direction to another. Only last September an Organisational Bulletin heralded a reduction in Business Streams to four (in fact the bulletin expressly referred to five businesses, not four) rather than the then 11. However, within six months this rationalisation was reversed and the number of businesses is now back into double figures.
The Trade Unions have repeatedly warned ministers that the current Board of Directors is not committed to making the company a success. Their attentions have been, all too often, focused elsewhere. For example, the Chief Operating Officer (COO). In the last financial year (ending March 2005) the COO’s annual salary package excluding pensions was some £101,300 (up 10.7% from 2004).
In comparative terms that is not an over generous sum for some-one who, as Remploy state:
“…leads the development of the strategic direction of Remploy over the medium and long term…defines and drives the operational process, procedures and developments of the company as a whole, where it needs to apply across the various business streams...”
(Remploy Organisation Bulletin, 5 September 2005)
Ordinarily the Trade Unions have no qualms where such remuneration is made in return for 100% effort if not success. Unfortunately, in the case of Remploy we cannot point to either 100% effort or success.
Being Remploy’s COO did not prevent her from agreeing to join the Competition Commission’s Reporting Panel (for an eight year term) where she has committed herself to at least one and up to two days a week. At £300 per day that gives her additional earnings of between £15,000 and £30,000 but which will result in her working for Remploy only three, or at best four, days a week. And, being Remploy’s COO did not stop her participating on the Foster Review of the future role of further education colleges during 2005.
However, she has three other current directorships as well as being Remploy’s Chief Operating Officer. From the Trade Union perspective the directorship which causes us the most concern is her involvement in Hill Executive Action Ltd (Registration No: 04208270) a business and management consultancy.
She was appointed a director of Hill Executive Action Ltd in May 2001, i.e. some three months before joining the Remploy Board. Later, in March 2004 was appointed company secretary. On the very same date, Bob Warner, Remploy’s Chief Executive, became a director of Hill Executive Action Ltd. They are the sole directors and the Trade Unions find these developments unprecedented and earlier this year we raised these matters with the Minister responsible for Remploy.
Obvious questions arise such as how much time and effort are Remploy’s Chief Executive and Chief Operating Officer spending on their joint venture.
Too many managers and too few of them disabled
The attached independent report based on an analysis of the company’s published accounts, commissioned by the Trade Union, confirms our view that Remploy is a top heavy managed company. An additional 70 managers have been added to the payroll since August 2003. That is nearly a 19% increase in management grades yet only four are disabled (less than 6% of the new intake) and this must be viewed in the context of an overall reduction in the workforce of some 2%. Whereas in 1999-2000 disabled employments costs stood at 77% this has now fallen to 69%.
Impact of a Closure of Factories
The Review Team should be under no doubt what awaits Remploy’s disabled employees should a closure recommendation be made and implemented.
The Remploy workers and their trade unions will not stand for the closure of Remploy factory sites while the senior managers and directors stay in office and are not held responsible for their actions
According to the Disability Rights Commission’s analysis of recent Labour Force Survey data (Disability Briefing March 2006) only half of disabled people of working age are in paid employment. Since 1998, disabled people’s overall employment rate has increased steadily by 7 percentage points, from 43 per cent to 50 per cent. But inequalities in the proportions of disabled and non disabled people in work persist with only half of disabled people in work, compared with four fifths of the non disabled population. Employment rates vary greatly according to the type of impairment a person has. Disabled people with mental health problems have the lowest employment rates of all impairment categories, at only 20 per cent. Disability rates increase with age; whilst 9 per cent of adults aged 16-24 are disabled, this increased to about 44 per cent in the 50 to retirement age category.
Very many will not be able to hold a job in mainstream employment. For those fortunate to get and keep a job their pay, terms and conditions are likely to be inferior to what they currently receive. That is not an attractive option.
However, the logic of a factory closure recommendation would be to extend closure to other Supported workshops across the country including those providing manufacturing employment for blind and visually impaired workers. With three out of four visually impaired people not in paid employment and 90% of employers believing this section of the workforce are difficult to employ where are these people to go? Losing your job and independence and going onto welfare benefits is hardly anyone’s idea of disability equality.
Progressions and Interwork
The Trade Unions have been consistent. If ‘progressions’ are the benchmark by which success is measures there must be a clear understanding of what that term means. The recent Supported Employment Conference (held at Wortley Hall May 5) agreed that progression had to be codified as a standard on a national basis.
The Interwork scheme despite its faults meets a need. But is it the undoubted success that Remploy or others believe. According to the company’s own survey half of the employees on the Interwork programme are out of work after six months. This was confirmed in evidence given to the Public Accounts Committee on the 3rd May.
Over the last few years there have been several management surveys within Remploy. Surveys on diversity, surveys within Interwork (only 200 replied) and the papers contained in this report show the findings in full of a survey that was carried out by the trade unions. The trade unions are the only organisations that have consulted with the factory workforce.
We have also attached the Independent Report dated 23rd May 2006. The Public Accounts Committee called Jobcentre Plus to give evidence and the House of Commons Minutes of Evidence are very critical of the information provided by Jobcentre Plus to the NAO.
Question 75 clearly shows that the comparison of unit costs is like comparing an apple with a fillet steak.
Question 76 also confirms that disabled people outside the factory network only work for six months or less.
These minutes are important for the PricewaterhouseCoopers Review Team to consider.
The GMB Report has been compiled by disabled people who work in Remploy factories. The conclusions are very clear, Remploy needs to change. This report not only challenges the status quo but goes further and suggests a new solution. A new Remploy free to show how best practice can be used to employ disabled people. At long last a group of disabled workers have shown there is a new way forward. The work has not yet started but the foundations are firmly laid.
It gives me great pleasure to be able to commend this report for your serious consideration.
Secretary to the Remploy
Consortium of Trade Unions
In May 2006, the Public Accounts Committee held an evidence session into the National Audit Office report questioning key civil servants.
Read the transcript by clicking onto the link, below. In particular, see questions 74 - 85 and 107 - 119 which specifically mention Remploy.
Public Accounts Committee
Read the complete Alternative Plan, including charts, by clicking onto the link, below.