Remploy: another privatisation scam?

March 9th, 2012

The closure of 36, and ultimately all 54, Remploy sites is a first-order scandal.   No less than 1,752 persons, almost all of them disabled, have been given notice by the government that they will lose their jobs within the next 3 months, at a time when unemployment is 2.68 million and rising, on the grounds that it is better that they get into mainstream employment and that the “Remploy factories should be set free from government control” (and presumably delivered into the tender hands of the market).   The truth is of course that any who were genuinely able to do this would have done so long ago – the reason they didn’t is because they couldn’t.   Even the Liz Sayce review on which the government closure decision was based (she was already known as a strong opponent of Remploy factories, and was chosen to get the conclusion they wanted) admitted that the best factories offer job satisfaction, a supportive and accessible environment, and a reasonable income for their employees.   But that was not allowed to get in the way of a government scenario of asset stripping, management buy-outs, and private takeover.

The GMB believes that the total cost of closing down Remploy, including winding up the pension scheme (£600m), will be well over £1bn.   That means there will be no savings till 2025 or even longer since the pensions cost could rise to £700m.   There is also the on-going cost of benefits not just for those displaced now, but also for the rest who are likely to lose their jobs in 2013.   There is also the question of the long-term leases on the factories.

Who will gain from all of this?   The Treasury which is obsessive about maximizing the disposal of all public assets that it can, even at a short-term loss at a time of austerity.   But the main benefit will go to the management buy-outs.   The Pontefract Remploy site, with 43,000 sq. ft. of manufacturing, will very likely be sold off to senior management or their friends at a knockdown price and then sold on to property specualtors at a handsome profit (shades of MG Rover).

Equally Remploy Employment Services will no doubt become a private company, sold off to the current directors at a pittance.   All this of course is for the time being kept under wraps, so as not to disturb the farce of the consultation which has been launched with all the key decisions already made.

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