Don't Kill off Remploy, Enable It to Make the Most of a Big Market; the Government Is Due to Announce Its Response to a Report That Recommends Withdrawing Funding for an Organisation That Has Employed Disabled People across the Country for over 60 Years. Here Swansea West MP Geraint Davies Argues Why This Would Be a Backward Step
REMPLOY was set up under the 1944 Disabled Persons Employment Act by Ernest Bevin. Its first factory was set up here in Wales in 1946. This factory, in Bridgend, made violins and furniture and many of the workers were disabled miners.
The name Remploy, which was used from 1946, was derived from "re-employ". This organisation prospered with dozens of factories set up across the UK operating a diverse variety of businesses including the manufacture of motor components and making protection suits for police and military. It also expanded its services over the years to helping people find work and provide advice and training.
Its future has been under threat for a number of years. Earlier this year Liz Sayce, head of the disability organisation Radar, published a report that recommended that the subsidy for Remploy should be withdrawn and used for the Government's Access-to-Work fund.
Funding currently comes from the Department of Work and Pensions, which gives pounds 63m in support that works out at around pounds 23,000 a year for every employee.
The consultation period has now finished and the Government is due to make an announcement shortly.
I believe very strongly that there should continue to be a subsidy for Remploy factories.
This position is informed by my experience with Swansea Remploy Factory.
They do a great job here making good quality furniture and helping its staff with training and educational opportunities. The set-up fosters self-esteem and confidence.
The Swansea factory, like others across the country is making a loss. Obviously its very nature means that profits are going to be limited but there is an awful lot that can be done to increase turnover and make these businesses more robust.
When I visited the Swansea Remploy Factory in the spring the factory turnover was pounds 25,000 per month and following my intervention this has risen to pounds 100,000 with the factory operating at full capacity.
Along with other local MPs, I asked the vice chancellor of Swansea University, the chair of the health authority and the chief executive of the DVLA to put their respective procurement managers in contact with Swansea Remploy to see if Remploy could supply furniture in the required specification and time frame at a competitive price.
Consequently, the factory has secured orders with NHS procurement services in South Wales and potential orders with Swansea University to supply furniture to the University's new halls of residence. The turnover per month has quadrupled and the factory is now making gross margins of pounds 50,000 per month compared with pounds 5,000 per month earlier in the year.
This experience suggests that more effective sales and marketing across Remploy could increase turnover and margins leading to reduced subsidy. However, I understand that about 15 of the 60 sales positions have been left vacant and locally large prospective clients - like the DVLA, university and health authority in Swansea's case - have been ignored.
In addition, marketing spend is less than 1% of turnover which is very low in my experience in both multi-national and small business. Moreover, I understand that new marketing literature has to be approved by civil servants and are not used in the volumes needed to fill order books. For example I am told by GMB general secretary Mark Kenny that when the union asked for hundreds of brochures to help generate orders for desks from schools through their contacts with schools, as a union they were only allowed a handful of brochures. …