“Two-faced Cameron praises disabled athletes then condemns us to the dole” was the cry of staff at Remploy at Springburn in Glasgow, according to the Daily Record on 4 September.
Remploy, established in 1945 to provide employment for disabled people, closed 25 of its 54 sites last month and three more are earmarked for closure. Business plans have been developed for nine other Remploy sites and discussions are being held with bidders. The remaining 18 sites may be safe for the present. The closures, which followed a review by Liz Sayce, the chief executive of disability organisation Radar, could see the loss of 1,700 jobs and resulted in strikes at two of the sites, in Glasgow and Chesterfield.
This is not the first attempt to try to make Remploy viable. In 2007, the Labour government started a modernisation plan, which relied to some degree on public procurers making use of article 19 of the EU public procurement directive, exempting sheltered businesses from full competitive tendering. The hope was that public procurers would make use of this clause and buy from Remploy. Sayce concludes that they did not.
As a result, Remploy made a loss of £63m in 2009-10 – almost £27,000 for each employee. Sayce identifies that many people employed by Remploy had little work to do and argued that the money could have been spent more effectively through the Access to Work scheme, which aims to get the disabled into work. The difficulty with this argument is that most of the factory closures are in areas of very high unemployment and there is nothing in Sayce’s report that analyses the effectiveness of the scheme in different parts of the country.
Twenty years ago, some Remploy factories had a good reputation for the quality of their products, but a poor reputation for delivery reliability. Good commercial management should have been able to rectify these problems and public sector procurers would have been more likely to continue to buy from Remploy.
The Sayce report gives several reasons why public sector procurers have not been using Remploy in the way the Labour government expected. It says directors of procurement “have become used to social benefit clauses covering everything from environmental to community benefit and commissioning. It would be useful to link procurement from disabled people’s organisations … to social benefit clauses”. Sayce also argues that there is “not always a fit between what Remploy businesses provide and what government buys” and that “it is important that public procurement delivers value for money”.
After 30 years experience in public sector procurement, I struggle to find any of these reasons acceptable. The report seems to confuse value for money with lowest price. There are many factors that make up value for money, as previously pointed out. The lack of fit between what Remploy produces and what government buys sounds like a lack of communication and engagement with each other. Furthermore, nearly all heads of procurement understand the implications of social benefit clauses. The reasons given sound like an attempt to excuse or rationalise the unacceptable.
The root cause of why the Labour government was unable to implement its policy was the dysfunctional structure of UK public sector procurement. Despite improvements, its structure remains dysfunctional and in this case it is disabled people who have suffered. The challenge for public sector procurers and what is left of Remploy is to develop a workable plan, to which Remploy and all significant public sector organisations should sign up, to ensure the viability and perhaps even the growth of the business in the longer term.
Perhaps this is something that Sally Collier, government deputy chief procurement officer, could consider co-ordinating.
Colin Cram is a consultant specialising in public sector procurement and a former director of the North West Centre of Excellence