Remploy
We will now have a ministerial statement by Fergus Ewing on Remploy. The minister will take questions at the end of his statement, so there should be no interventions or interruptions.
14:21
On 29 November, I advised Parliament that I would come back before the Christmas recess to provide details of the support that I intended to put in place to complement the existing package of support for redundant Remploy workers who seek to move into new jobs. I am pleased to be able to set out the proposed scheme and to answer members’ questions.
As members are aware, the United Kingdom Government is to remove all direct funding from Remploy by March 2014. In response to that, and with the agreement of the UK Government, Remploy has put all factory sites up for sale or closure in two stages. Stage 1 has seen three sites in Scotland—those at Netherton, Edinburgh and Aberdeen—close in recent months, with the Springburn site in Glasgow due to close in January next year.
Members across the chamber share my view that the stage 1 process was poorly handled from the outset—both the commercial exercise and implementation of the support package for the people who faced redundancy. The Scottish Government made strenuous efforts to persuade Remploy and the Department for Work and Pensions to share information on the commercial process to enable us to work with bidders, but that was refused.
Stakeholders and members of this Parliament have contacted the Scottish and UK Governments about the problems that have arisen throughout stage 1. The apparent lack of preparation for the process resulted in poor communications with staff and potential bidders, and missed opportunities in the commercial process. The end result, which will see all four sites closing, is nothing short of a travesty for the workers concerned.
Problems occurred at all the sites, but the commercial process at the Springburn site has been the subject of strong allegations of mishandling. It is likely that we will never get to the bottom of what happened there. Now, despite our efforts to secure a delay of any further action until a full, independent review of stage 1 has taken place, stage 2 has been announced and the futures of all the people who work in what is left of Remploy are under threat.
As I noted in last month’s debate on Remploy, we have taken action and we will continue to do so. Through Scottish Enterprise and Just Enterprise, we have offered business support to potential bidders. Through the partnership action for continuing employment team, we have delivered support for redundant Remploy staff. Thirdly, we have sought to build public and private markets for the remaining Remploy sites and other supported businesses in Scotland.
I turn to the next steps. Stage 1 showed us that we have to do more—we have to be proactive, and we will be. In the coming months, Scottish Enterprise will provide a dedicated resource to work with the DWP and Remploy on supporting potential bids. I am pleased to report that, in a meeting yesterday, Remploy and the DWP agreed in principle to a greater level of joint working to support potential bidders for the businesses. Scottish Government officials, with their UK counterparts, will now work quickly to develop the terms of such an approach.
We continue to push for agreement for PACE support for those who are under threat to be made available much earlier than was the case in stage 1, in which, in some instances, factories closed before Remploy transitional support staff had completed even the initial skills assessments. For those who are already redundant, and any others who lose their jobs in this next stage, it is clear that we need to do more.
To date, 10 redundant workers in Scotland have found new jobs. Esther McVey hopes that all redundant Remploy workers will get jobs. So do we, but the latest figures make it evident that more support is necessary. That is why I have decided to offer a recruitment incentive of up to a total of £5,000 to employers who recruit disabled ex-Remploy workers in Scotland into permanent jobs. The funding will be offered to employers to help to meet any additional costs of recruiting and training Remploy workers. It must not duplicate any of the existing support packages that are in place from DWP.
The employer recruitment initiative will be available to employers in the private, public and third sectors; it will also be available to any Remploy workers setting up their own social enterprise or co-operative, or who enter self-employment. It will be paid in stages over 18 months to ensure employer commitment and to enable the employee time to settle into their new role. It will be available to all disabled redundant Remploy workers for as long as they are receiving PACE support. Employers who have already recruited Remploy workers when the scheme becomes operative will be able to claim the payment retrospectively.
The programme will be managed by Skills Development Scotland, who will procure the delivery from a third-sector body with a proven track record of supporting disabled people. When appointed, the delivery body will work closely with the DWP personal case workers and the other organisations that are supporting Remploy workers following their redundancy, including the Shaw Trust and Remploy employment services. The programme is not about offering paid work experience or temporary jobs with no secure future. Employer commitment to the individuals will be crucial. Posts offered under the scheme must either be new jobs or real vacancies; they cannot displace existing staff members.
By offering this additional incentive today, I hope that we will encourage more employers to recruit Remploy workers. I know from personal experience of visiting many Remploy sites that the employees are committed, hard-working individuals who find themselves unemployed through no fault of their own. We have a responsibility to do what we can to support them. I will be happy to report to Parliament in the coming months on the progress of the initiative.
I am grateful to the minister for early sight of his statement. There is much in it with which we on the Labour benches can certainly agree. I also pay tribute to the workers and their trade unions for the vigorous campaign mounted in defence of Remploy.
I will not rehearse the flaws in the UK coalition Government’s approach to the closure of Remploy factories across Scotland; suffice it to say that we supported the Government’s call to delay phase 2 until we could evaluate and learn lessons from the closure or takeover of factories at phase 1. I share the minister’s disappointment that the UK coalition pressed on regardless and announced the closure of another four factories, in Dundee, Cowdenbeath, Leven and, of course, Clydebank—an area that neighbours my constituency—over and above the earlier announcements about Springburn, Edinburgh, Aberdeen and Netherton.
It is helpful that the minister has accepted Labour’s proposal for an employer support grant. Although I acknowledge warmly his announcement of £5,000 to employers for each employee as a recruitment incentive, I am sure that he would agree that it falls well short of the position adopted by my Labour colleagues in the Welsh Assembly. They provide an employer support grant over four years—not 18 months—with grants of up to 100 per cent for jobs in the public sector and up to 75 per cent for jobs in the private sector, with a total budget of £2.4 million a year. What is the total budget for the employer recruitment incentive in Scotland for each year of operation?
I am equally grateful that the minister has accepted Labour’s proposal for a permanent supported workplaces task force. Who will be invited to join the task force? Will it involve representation from the First Minister’s Council of Economic Advisers? When will the task force meet?
I appreciate working with all members and broadly welcome the support that we have had from the Labour Party, in particular. We have worked co-operatively and I hope and expect that that will continue.
On the task force, we have had stakeholder meetings from the very beginning, as Jackie Baillie knows—I think that we have had five or six meetings, all of which I have chaired. Stakeholder meetings will continue. I have indicated informally to Patricia Ferguson an offer of a meeting with all Labour members, because many Labour members have an interest in the matter—as do many members of the Scottish National Party and all parties. Indeed, there are too many interested members for them all to be on a task force—it would be the most populous task force in the history of task forces. We do not want committee meetings and commitments to attend and so on to get in the way of progress. However, we will continue to work closely with people and especially with the trade unions.
Like Jackie Baillie, I support the sterling work of trade union representatives, who passionately believe in what they are doing. That is manifest to everyone who knows Lyn Turner and Phil Brannan, in particular, who have taken a principled lead on the matter.
Jackie Baillie’s main question was about the Welsh example. What we are offering is a fallback position. Our job is difficult because, against Jackie Baillie’s wishes and my wishes, the UK Government has determined to forge ahead with the tendering process instead of pausing for thought, reflection and assessment and seeking voluntary proposals. However, our primary objective is to ensure that Remploy workers continue to do the work that they do and are not made redundant but transferred to new employers under the Transfer of Undertakings (Protection of Employment) Regulations.
That must be objective 1, and I am grateful to Jackie Baillie for giving me the opportunity to set that out. Of course, if the objective cannot be achieved in every case, we strongly believe that the incentive that I announced today of up to £5,000 per person offers sufficient encouragement to employers, whether they are in the private sector, the third sector or the supported employment sector, to recruit redundant disabled Remploy workers.
The incentive is not on the financial scale of the support that is offered in Wales. However, such schemes need to strike a balance between providing a real incentive and providing sustainable support. It is not right in principle that a new employer should be totally relieved of his financial responsibilities for employees for an indefinite period or even for several years. Employers must financially recognise the value that they get from the effort and work of their employees. Having visited five of the Remploy sites, I know that employers get excellent value, excellent work and total commitment from their employees.
I am confident that the measures that I announced are proportionate and significant. If they are needed—and I hope that they will not be—I hope that they will also be effective.
We welcome the statement and further measures of support from Scottish Enterprise and the PACE team. We also welcome the minister’s approach to seeking employer commitment, which is critical.
We regret that little has been done since 2007 to support Remploy, although Peter Hain, the former Labour minister, had warned that factories would close unless further action was taken.
What progress has been made on the business opportunities for Remploy workwear contracts? What progress has been made on the use of reserved contracts for supported factories and businesses? Will a financial package that is similar to the one that the minister announced be offered in relation to staff in the many social enterprises and supported businesses throughout Scotland that employ disabled people and face an uncertain future?
I assure Mary Scanlon that every possible effort is being made to ensure that there are business opportunities in relation to the continued procurement of all the goods that are produced in the phase 2 Remploy factories, and that attention has been given to other units, such as closed-circuit television units, in which members have taken an interest.
I have visited the factories that produce workwear and seen the quality of what they produce, which is top class. The factories make excellent products. We are, of course, mobilising the procurement power of the public sector to ensure that there can be a sustainable future for the businesses that provide workwear. However, our difficulty in that regard is that with the future of all the Remploy sites now in question because of the tender processes firing ahead, how can any public sector body give a contract beyond March or a few months afterwards? They do not know whether anybody will be in place—whether there will be a business, a body, a supported body or a third-sector body—to fulfil the contracts.
We have a catch-22 situation. We can and we will use—and I am using—the public sector purchasing power and our influence in the private sector to do everything that we can to secure the sustainable future of the phase 2 factories. However, because of the uncertainty surrounding the continuance of those factories, how can we reasonably expect any unconditional offers to purchase to be procured?
Secondly, Mary Scanlon asked about contracts in the reserved area. I personally intervened in relation to the Stirling factory at the behest of Mr Crawford because the factory produces, among other things, suits that are designed to enable members of the armed forces to withstand chemical, biological and nuclear exposure. Again, that factory makes high-quality products. I intervened specifically to ask the UK minister to extend a Ministry of Defence contract. As of today, I have received no answer from the minister to that request.
There are 14 members who wish to ask the minister a question. I will do my very best to call everybody who wishes to ask a question, but I urge short questions and short answers.
I wish to make the minister aware that in addition to activity undertaken by the Government, I have written to both Stirling Council and Scottish Enterprise asking them to help to identify potential new operators of the Stirling site.
How can the Government best ensure that co-ordinating activity between the local councils that are involved and Scottish Enterprise happens? What assistance can be provided to produce a positive prospectus that describes, for instance, the capability and capacity of each site, the specialist skills that are in place and the high-quality products that are available? I know that the workers at the Stirling site will be pleased by the minister’s announcement about his recruitment initiative, which shows his commitment to Remploy workers.
Co-ordination will be important. That is why I hope and expect to bring together all relevant local authorities to discuss how we can work together, in concert and collaboration, to ensure that all opportunities are pursued. I am also meeting Tim Matthews of Remploy next month and the stakeholders group is meeting next month.
In addition, a dedicated resource from Scottish Enterprise will be available throughout the country in the places where it is required in order to ensure that potential bidders are identified. A lot of work will be involved. It would be simpler if we did not have the gun of the tendering procedure at our heads because that work must be done in accordance with the newly announced procedure, where best and final offers are to be expected shortly after March, so we have very little time indeed. A lot of work needs to be done and I welcome the support of all members across the chamber in carrying out that work in all parts of Scotland.
I welcome the minister’s comment that the ideal solution would be to have Remploy workers remain in their positions. Has the minister had the opportunity to discuss with his health colleagues the possibility of the Springburn Remploy factory continuing to make wheelchairs for the national health service so that workers there can remain in employment after the end of January 2013?
I confirm that I have discussed that with my colleague Alex Neil. He has made it clear that he is 100 per cent behind my efforts to bring together the health procurement officials in order to see what we can do. I can also confirm that my officials have been in contact with Greater Glasgow and Clyde NHS Board on the matter and that useful discussions have been had. I very much hope that progress can be made.
As Patricia Ferguson will be aware, procurement by public sector authorities is independent of the Scottish Government. It is not for us to tell them that they must do things. However, in this circumstance, especially now that the supported employment procurement framework that has been in place since 12 September is being acted on by various public sector bodies, there is good will around this issue. Working with Patricia Ferguson and others, I am determined that every opportunity to provide continued work—in this case, through the procurement of wheelchairs—will be taken, and I am happy to work with Patricia Ferguson thereanent.
I echo Patricia Ferguson’s concerns and sentiments. I am particularly concerned about who now holds the NHS wheelchair contract for Scotland. Does the minister believe that there might be a need to reprocure that contract?
More generally, does the minister agree that, when public bodies procure, they should make sure that clear information is given to potential bidders to assist and encourage them to use the £5,000 recruitment incentive that he has announced and to ensure that they can access other incentives, such as modern apprenticeships?
I am aware of the work that Bob Doris has done in relation to the events in Springburn, which are some of the saddest events that we have seen in Scotland recently. The story of those events has been told by many, not least by the Daily Record, which has truly put a human face to the issue and whose campaigning support on it we very much appreciate.
We will do everything that we possibly can to ensure that employees in Springburn who are being made redundant receive every possible support. I can confirm that, on 10 December, the DWP and PACE made a substantial effort to help those workers to receive support. It is extremely disappointing that they were led up the garden path. They were led to expect that there might be the possibility of future employment, but their hopes were cruelly dashed, in short order, after the phase 1 process was concluded.
I, too, welcome the news from the minister today. I am particularly pleased about the expansion of the task force’s membership. I accept the minister’s point about the need to ensure that its size is manageable.
Is the minister aware that, in Wales, in addition to the Welsh Assembly money of £2.4 million over four years, there is a programme that is backed by £12.8 million from the convergence European social fund and that work is also being supported by the NHS? What European funding is being used by the Scottish Government? What discussions has the minister had with Co-operative Development Scotland, which is headed by Sarah Deas?
First, I should say that the maximum cost of the ERI proposal that we have announced is set at £1.638 million. I apologise for not giving that figure to Jackie Baillie earlier.
We are happy to explore any opportunity to access finance in other ways. I will write to Helen Eadie about the specifics of the matter that she has raised. We do not want to duplicate things that the DWP is doing; that would simply be foolish.
I know that Helen Eadie has, rightly, taken a close interest in this matter in relation to Cowdenbeath and Leven. The main objective, which we all share, is to ensure that the excellent work that Remploy employees do, and have been doing for decades—one gentleman to whom I spoke said that he had been in his post for 38 years—can go on for another set of decades, and that people do not have to face the possibility of redundancy. That is the objective that we have set and it is the job that our stakeholder group and others are devoted to.
The information that was received by the constituency MSP in a letter a few days ago from the DWP was that the Remploy factory in Leven has been added to stage 2 of the process and is under threat of closure, with its employees facing redundancy unless expressions of interest are received from individuals or organisations that are willing to continue the business as a viable commercial enterprise. Will the minister join me and Tricia Marwick in writing to the DWP to oppose the latest threat and to ask for more time to be allowed for Scottish Enterprise to find a suitable buyer?
We have already argued—unsuccessfully, I am afraid—with Esther McVey and her predecessor at the DWP, Maria Miller, that the bid process should be halted. We argued that not for political reasons but for practical reasons—so that the work that I have described can be conducted in an orderly and concerted fashion, and not rushed, with an arbitrary deadline. However, we will of course continue to work closely with the DWP. That is why, just yesterday, my officials met DWP officials and Tim Matthews, the head of Remploy.
We understand that Remploy has acknowledged that the process that it instituted and conducted in relation to phase 1 was less than perfect, shall we say, and that progress is required. Concessions were given yesterday that it will do better in phase 2. We want to see proof that phase 2 will be different from phase 1. All members want that. They and, in particular, the trade unions are rightly sceptical about this, but on the face of it, we received at yesterday’s meeting assurances that progress will be made.
I will meet Tim Matthews towards the end of next month, by which time I hope that we will have made progress, especially on enabling Scottish Enterprise and the social enterprise body Just Enterprise to obtain details of potential bidders and to help them to do the necessary work to see what help we are able to provide, as a country, to enable as many of the Remploy factories as possible to have a secure future.
I do not think that the minister got round to answering the third question from my colleague Mary Scanlon, so perhaps I could give him another opportunity to address the point. Will a similar package to that which is being offered today to Remploy employees be offered to disabled staff from many other social enterprises or supported businesses, who also face an uncertain future?
The package that we have announced has been brought forward because of the scale and the impact of the redundancies that Remploy workers face. To put that in perspective, there are more than 300 of them in Scotland. The measure has been brought forward to reflect that.
These are difficult times for the supported employment sector. Following the interchange that my officials had just this morning with a leading social enterprise, I am told that times are even more difficult than they were a year ago. I make it absolutely clear that, if redundancies are faced in other social enterprises between now and the end of the session, I would hope, and would do my damnedest, to respond in the same way for them as I have done for Remploy.
Our efforts are really designed to avoid such situations arising, difficult though I admit and accept that they are. However, if circumstances affect other supported employers and disabled workers face redundancy in the future, such situations will be considered on a case-by-case basis. The principle that we have adopted today is a sound one and it should be followed.
The recruitment incentive is welcome. It is a practical and helpful intervention for which I thank the minister. However, I agree that the main focus of effort should be on retaining the workplaces. Previously, the minister spoke about the work that he is doing to build links between the Remploy workforce and growth industries, such as the marine sector and the offshore energy sector. What further progress has been made on that?
Since we debated the subject on 29 November, I have had various discussions with the Offshore Contractors Association, various oil and gas companies and the offshore wind industry group, which I co-chair. In each of those discussions, my purpose has been to suggest to a number of the most successful companies in the country that, if they have cause to require, for example, the marine safety jackets that are produced by two of the Remploy factories, those could be the subject of procurement.
I must say that I have received a marvellous response and an immediate one. As there was in the case of Glencraft with the philanthropy of the Wood Group and the personal commitment of two of its leading executives, there is a clear will among the leading industrialists in Scotland to do what they can. Our difficulty is that they do not know whether there will be businesses around to fulfil orders, so any orders that are placed will have to be, by definition, conditional. Businesses do not really like placing conditional orders; they want to make orders and get the goods—that is the way that it goes.
Notwithstanding that, Alison McInnes has asked a perfectly fair question. As I said in my statement, I will report to Parliament as we make further progress on all such matters.
Given the importance of and interest in the statement, I intend to let questions run on until 3 o’clock. I still have a large number of members who wish to ask a question, so I ask for brief questions and brief answers. I hope that we will get through everyone, but I hae ma doots.
What a bad taste in the mouth the Tory-Liberal Government in London leaves through its treatment of disabled people. What further concrete steps can be taken to secure a future for the dedicated and excellent workforce at the Cowdenbeath site, which the Westminster Government has let down badly?
All members are determined to do what we can for the workforce at the Cowdenbeath and Leven factories, both of which I have visited. Those visits were moving experiences because of the workforce’s commitment and diligence and the value of the work that it does, which is second to none. It is up to us to make every effort to do what we can to ensure that the workforce continues to have employment. I will work closely with Jamie Lawson of Remploy and with the private sector interests that I have described to ensure that every opportunity is explored.
I hope that the measures that the minister has announced will assist employees in Clydebank. I note that Skills Development Scotland will manage the recruitment incentive programme. What dialogue will the minister have with affected local authorities, such as West Dunbartonshire Council? Will he consider providing recruitment incentive funds to affected local authorities in the future, so that solutions that are based on local circumstances can be found?
We will engage with local authorities. With Mr Paterson, I visited the Clydebank premises, which are in a slightly different situation, because that factory makes the insides of car seats and is linked with two Remploy factories down south. We need to address that particular situation. As I said, I hope to bring together all local authorities fairly early in the new year to ensure that we are working in co-operation.
The incentive measure that I have announced is by a long way the most generous employment recruitment initiative that we have delivered in Scotland. If we can do other things in the future to help local authorities, we will of course look at that. However, I will take one measure at a time.
The announcement in the run-up to Christmas that the Dundee factory is to close was a massive kick in the gut to the factory’s dedicated workforce. Nevertheless, the workforce is keen to try to keep the factory open and to explore all the available options. What support can the Scottish Government offer to ensure that workers can explore possibilities such as a social enterprise model or other options that could help them in their efforts to keep the factory open and ensure that their dedicated work does not end when the factory’s support is withdrawn?
As I said, Just Enterprise and Scottish Enterprise services will be made available to any individuals who wish to explore such options. It is also essential for PACE to have early access to the workforce in all the factories. It was denied that before, which was wrong. Following yesterday’s meeting, I hope that that wrong will be put right in phase 2.
I welcome the minister’s clear preference for Remploy workers to be TUPE-ed across, so that they retain their terms and conditions. Given the concerns about Redrock’s bid for the Wigan and Edinburgh factories, will the minister add his support to calls for a co-operative and social enterprise solution for the Edinburgh Remploy factory?
I believe that there is activity in relation to Redrock and the Edinburgh factory, which Sarah Boyack will know about. It would not help if I commented prematurely on that.
The ideal solution is a social enterprise model. Broadly, that view is shared across the chamber. However, we must play the cards as they fall. If any private sector employer wants to make a genuine commitment to retaining the workforce, we must consider that carefully. I look forward to continuing to work closely with Sarah Boyack on the precise circumstances in Edinburgh.
I thank the minister for his statement. I welcome the news that the DWP and Remploy have indicated that they are now more open to partnership work with the Scottish Government and its agencies. Can the minister outline how he expects that engagement to progress and what benefits he feels that it will have for the workers, including those in Clydebank in my constituency?
I hope that the shroud of almost Sicilian secrecy over the whole process that existed during phase 1 will be lifted, and that we will see openness, transparency and a willingness to work with Remploy. We can then identify social enterprises in particular that want to continue to give the Remploy workers a secure future and the respect and dignity of work.
Fergus Ewing says that Esther McVey will not respond to the request to extend the Ministry of Defence workwear contracts, but I have asked him to do exactly the same thing with police and fire uniforms. Will he commit to use article 19 to give the factories in Stirling and Dundee, under a new business structure—perhaps a social enterprise—first option to make Scotland’s police and fire uniforms?
I call the First Minister—[Interruption.] The minister is promoted.
As Jenny Marra knows, we are pursuing the position on procurement extremely actively. Obviously, the police and fire services have made their own arrangements for procuring appropriate uniforms and other materials. That is what they do, and those contracts are in place. We are working extremely closely with the public sector in order to ensure that it uses its purchasing power, which is precisely why the article 19 framework has been in place since September.
That is also why, as I outlined on 29 November, we have made substantial progress with a large number of public authorities on using the powers that were set out in the framework that my colleague Alex Neil introduced when in his former role.
Rather than carping about what might be appropriate at some point in the future, we should all work together to ensure that the public sector exercises its independent authority in the spirit of Scotland to do the right thing for the Remploy workers. I am confident that that will happen, provided that there is an opportunity for it to do so effectively.
I too warmly welcome the minister’s statement, which indicates our strong support for Remploy employees. As 82 per cent of the Remploy employees who were made redundant in the previous round of cuts remain without work, it is essential, as just one measure, that the businesses that were targeted in phases 1 and 2—either those that have already closed or those that Remploy is planning to close—are resurrected as quickly as possible as new businesses. Will the Scottish Government consider establishing a specialist entrepreneurial task force, with sales and marketing experience in particular, to work alongside Scottish Enterprise, Just Enterprise and the co-operative movement to do just that?
I am confident that we have in the enterprise network people with sufficient expertise, drive and determination to do what is necessary, provided that they are enabled to do so, over the coming months. I will happily report back to Mr Brodie and all other members on the progress that we make on that hugely important task in the weeks and months to come.
That ends the minister’s statement on Remploy. I thank members for their co-operation; we have managed to get everyone in.