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Remploy Marine Fife House of Commons Scottish Affairs Committee Remploy Marine Fife First Report of Session 2013–14 Volume I: Report, together with formal minutes, oral and written evidence Ordered by the House of Commons to be printed 24 June 2013 HC 454 Incorporating HC 1051-i & -ii, Session 2012-13 Published on 26 June 2013 by authority of the House of Commons London: The Stationery Office Limited £0.00 The Scottish Affairs Committee The Scottish Affairs Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of the Scotland Office (including (i) relations with the Scottish Parliament and (ii) administration and expenditure of the offices of the Advocate General for Scotland (but excluding individual cases and advice given within government by the Advocate General)). Current membership Mr Ian Davidson MP (Labour/Co-op, Glasgow South West) (Chair) Mike Crockart MP (Liberal Democrat, Edinburgh West) Mrs Eleanor Laing MP (Conservative, Epping Forest) Jim McGovern MP (Labour, Dundee West) Graeme Morrice MP (Labour, Livingston) Pamela Nash MP (Labour, Airdrie and Shotts) Sir Jim Paice MP (Conservative, South East Cambridgeshire) Simon Reevell MP (Conservative, Dewsbury) Mr Alan Reid MP (Liberal Democrat, Argyll and Bute) Lindsay Roy MP (Labour, Glenrothes) Dr Eilidh Whiteford MP (Scottish National Party, Banff and Buchan) The following members were also members of the committee during the Parliament: Fiona Bruce MP (Conservative, Congleton) Mike Freer MP (Conservative, Finchley and Golders Green) Cathy Jamieson MP (Labour/Co-op, Kilmarnock and Loudoun) Mark Menzies MP (Conservative, Fylde) Iain McKenzie MP (Labour, Inverclyde) David Mowat MP (Conservative, Warrington South) Fiona O’Donnell MP (Labour, East Lothian) Julian Smith MP (Conservative, Skipton and Ripon) Powers The committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the internet via www.parliament.uk. Publication The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the internet at www.parliament.uk/scotaffcom. A list of Reports of the Committee in the present parliament is at the back of this volume. The Reports of the Committee, the formal minutes relating to that report, oral evidence taken and some or all written evidence are available in a printed volume. Additional written evidence may be published on the internet only. Committee staff The current staff of the Committee are Eliot Wilson (Clerk), Duma Langton (Inquiry Manager), Gabrielle Hill (Senior Committee Assistant) and Ravi Abhayaratne (Committee Support Assistant). Contacts All correspondence should be addressed to the Clerk of the Scottish Affairs Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 6123; the Committee’s email address is [email protected] Remploy Marine Fife 1 Contents Report Page Summary 3 1 Introduction 4 Remploy 4 The Sayce Review and changes to Remploy 5 2 Remploy Marine Fife 7 The nature of the business 7 A going concern? 8 Transitional support 9 3 Flaws in the bidding process? 11 The bidding process 11 Difficulties and confusion 11 4 Conclusion 14 Conclusions and recommendations 15 Formal Minutes 17 Witnesses 18 List of printed written evidence 18 List of Reports from the Committee during the current Parliament 19 Remploy Marine Fife 3 Summary Following a review of disability employment support in 2011, the Government announced its intention to reduce and ultimately withdraw funding for Remploy, the company established in 1945 to provide employment opportunities for those with disabilities. The intention was to move away from very targeted support for a small number of workers in Remploy establishments to more broadly-based employment support for those with disabilities. 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 tranche included Remploy Marine Fife, which has factories in Leven and Cowdenbeath. Remploy Marine Fife manufactures lifejackets at its two factories. It is an internationally recognised business with a quality Kitemark, and currently produces 30,000 lifejackets a year. Its order books are full. However, it is currently making a loss, although the size of this loss has declined significantly over the past three years. The lifejackets are sold by the customer, Ocean Safety, at a mark-up of over £100 compared to the cost of production, and this gap seems extraordinarily large. The Government must look again at how Remploy agreed this contract on such generous terms to the customer. One of the central criteria by which bids for the Remploy sites will be judged is sustaining the workforce in employment. We believe this is vital, but also that the wider social context must be taken into consideration when assessing the bids in terms of value for money. Regrettably, the Government has shown no evidence of having taken these factors into account. We fear that the changes to Remploy will descend into simply a series of factory closures or asset-stripping. Fife Council highlighted a number of problems they and a number of other interested parties had encountered in the bidding process. The timescale was short—January to March 2013—and Remploy insisted that bidders sign confidentiality and non-disclosure agreements before proceeding to the third stage of the process. Fife Council felt this made it impossible to collaborate with social enterprises or co-operatives in order to try to keep the factories as going concerns. In addition, the Government has indicated that there will be very little in the way of transitional support for the Remploy businesses as funding is withdrawn. This lack of flexibility, a “one size fits all” approach, has been a considerable inhibitor. We reject the unyielding approach of the DWP and Remploy in terms of timescale and transitional arrangements in the light of the evidence we heard. Even at this late stage, we believe the Government can and should instruct Remploy to extend the timescale, make more appropriate transitional arrangements available and ensure that social enterprises, mutuals and co-operatives are able to participate in the bidding process. After we took evidence, there were renewed talks between Fife Council and Remploy. Given the expressions of interest in Remploy Marine Fife, we hope that there will be successful bids for both factories to maintain their workforces in employment, manufacturing a high-quality product to an international market. It is vital that the high quality manufacturing base in Fife is maintained, otherwise it is likely that it will be transferred overseas. 4 Remploy Marine Fife 1 Introduction 1. Remploy Marine Fife’s two factories at Leven and Cowdenbeath were earmarked for sale by the Government as part of its wider winding-down of Remploy by withdrawing financial support. There were concerns raised about the process by which this was going to happen, so we decided to undertake a short, focused inquiry into the future of Remploy Marine Fife. We held two oral evidence sessions, with representatives of Fife Council and Friends of Remploy, and with the Department for Work and Pensions and Remploy itself. In our Report, we highlight some of the difficulties bidders have faced in the proposed sale of Remploy Marine Fife and the measures which have been taken to try to resolve these. We are grateful to all of those who gave evidence to the inquiry. Remploy 2. Remploy, a non-departmental public body owned by the Department for Work and Pensions (DWP) and organised as a company limited by guarantee, exists to provide sustainable employment opportunities for those with disabilities and those who have “complex barriers to work”.1 It was established in 1945 under the terms of the Disabled Persons (Employment) Act 1944, and opened its first factory in Bridgend, in 1946. Over the following decades it, at its peak, established a network of 83 factories across the UK making a wide variety of products, and in the late 20th century it moved into service businesses. 29 of these factories were closed by the previous Government. Remploy promotes work as a key element of an independent and fulfilling life, and its Employment Service operates through a network of 64 town and city centre branches and offices and a comprehensive range of tailored support services provided through them. 3. Remploy’s purpose is defined as follows: We recognise the fundamental role that leading employers play in delivering sustainable employment. We also recognise that employing disabled people delivers real social and economic value for business. So, by helping employers to better understand and act upon the benefits of employing disabled people, in effect transforming business, we can help to transform the lives of individuals.2 In 2010/11, Remploy found 20,000 jobs for those with disabilities and complex barriers to work. 4. Remploy provides various products and services through ‘Enterprise Businesses’. If a United Kingdom public body procures these products or services from a Remploy business, it is permitted to take advantage of the 2006 Public Contracts Regulations (Regulation 7). These regulations restrict the tendering process for goods or services to supported businesses, which are defined as those where over 50% of employees are disabled. UK Government guidance is that every public body should reserve at least one contract for supported businesses. In this way, public bodies can fulfil their corporate social 1 www.remploy.co.uk 2 ibid. Remploy Marine Fife 5 responsibility objectives by helping more disabled people into work. There is also a European directive, Article 19, which allows public bodies to reserve some contracts for businesses in which over 50% of the workforce is disabled.3 However, we regret that the take-up of these opportunities has been very low.
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