Concerns over Remploy bonuses while review fails staff

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by a Newsnet reporter

An SNP MSP has raised concerns over the £1.9 million paid out in bonuses at Remploy at the same time as a UK Government review has failed to put forward a proper future for employees with disabilities working in Remploy factories.

by a Newsnet reporter

An SNP MSP has raised concerns over the £1.9 million paid out in bonuses at Remploy at the same time as a UK Government review has failed to put forward a proper future for employees with disabilities working in Remploy factories.

Remploy was established in 1945 and its Enterprise Business is made up of 54 factories across the country, employing disabled people in different sectors including the furniture, logistics, and recycling industries.  The company is funded by the UK Government and receives Grant-in-Aid of £111m each year to deliver a range of employment and development opportunities to disabled people under the Government’s Work Choice programme.  

In December 2010 the UK Government commissioned a review of Remploy services and support for disabled employment.  The consultation closed on October 17th.

Unions, disability rights groups and others have previously raised concerns about the priorities and actions of Remploy management.  In February this year, Work and Pensions Secretary Iain Duncan Smith personally contact the board of the state-funded company to request that they to show restraint in the distribution of a bonus windfall to its top-tier management.

But the directors ignored Mr Duncan Smith’s request and instead awarded large bonuses to upper management.  In total, the company paid its management team £1.5m in bonuses and benefits last year.  

Remploy’s accounts show that chief executive Tim Matthews, 59, who once listed drinking champagne among his interests in Who’s Who, took home an annual pay package of £180,000.  He also claimed thousands of pounds more in expenses for hotel stays and meals.  Remploy finance director Nigel Hopkins received a £140,000 pay package, including a £15,000 bonus.

After bosses awarded themselves the bumper payout, the company then embarked on a redundancy programme which unions believe will target half the company’s 2,800 workforce.

An independent review commissioned by the DWP this year recommended that the government close the factories because “factories were not the model for the 21st Century.”

SNP MSP for Edinburgh Western Colin Keir met with trade union leaders at Remploy last week to discuss the review which could see Remploy services shut down.  The GMB union, which represents the majority of workers at the company fears that plans to close Remploy down are already far advanced.

Commenting on the bonuses Mr Keir said:

“When the bases are threatened with closure and employees are seeing their pay rises restricted this culture of awarding bonuses is completely unacceptable.

“It is deeply concerning the company is asking disabled people who earn less than £21,000 per year to accept a £250 per year increase whilst 380 senior managers will be receiving bonuses of up to £10,000.

“I am not satisfied appropriate action has been taken to reform Remploy or that the proposals from the UK review are sufficient.

“The Sayce review fails to recognise the varying needs of disabled people. Employment should be based around the person not around the place they work in but this review has not come up with any real measures to help disabled people into mainstream work opportunities.

“While the objective of getting people into open employment are commendable there is no clear evidence of how that can be achieved.

“There is far too much risk involved and not enough explanation of how these proposals would work.”