Select Committee on Public Accounts Twenty-Fourth Report


DEPARTMENT FOR EDUCATION AND EMPLOYMENT: REMPLOY LIMITED

REMPLOY IN THE CONTEXT OF THE SUPPORTED EMPLOYMENT PROGRAMME

8. In terms of value for money, the evidence shows that Remploy compare reasonably with other providers of supported employment[4]. In 1995-96, the latest year for which audited accounts for local authorities and voluntary bodies are available, Remploy provided each factory place for £10,367 which was more than the cost to local authorities (£10,111) but less than the cost to voluntary bodies (£10,947). In the same year, Remploy provided each placement with a host firm for £4,242 which was less than the cost to voluntary bodies (£4,313) and to local authorities (£5,036).

9. Workshop and Remploy factory places, therefore, cost more than twice as much as placements with host firms[5]. Since 1987-88, the Department's encouragement of the greater use of placement schemes has resulted in a 29 per cent shift in supported employment provision from workshops and Remploy factories to placements with host firms[6]. The Department told us that ten years ago, at the time of our predecessors' report on supported employment, 20 per cent of the programme had been made up of placements; it was now 49 per cent. They told us that this gave them a great deal more flexibility as to where those placements were provided. They fully expected that within a year the balance of the programme would be 50:50, that is, 50 per cent placements with host firms and 50 per cent workshop and Remploy factory places[7].

10. The Department put it to us that this was fairly impressive progress especially as they had to take into account the needs of individuals and also deal with local authorities and voluntary bodies who were very committed to the workshops which they had provided, in many cases for decades, and who saw those workshops as playing an important part in their local communities. The Department, therefore, considered that any further rebalancing of the programme was going to take time and was going to have to be handled sensitively[8].

11. The Department went on to emphasise that there were people who needed the greater support and the more sheltered environment provided by the factory and workshop and who were unable to work in a placement situation. Since the Department did not wish to be seen as pushing people from a sheltered environment to placements for which they were not suitable, they were loath to set targets at a national level for the rebalancing of the programme[9]. Instead they expected that discussion on rebalancing should take place at a local level[10].

12. In 1990 a Departmental survey indicated that between 130,000 and 270,000 people with severe disabilities were employed or self-employed, including 20,000 on the supported employment programme, and that between 60,000 and 100,000 severely disabled people were actively seeking work. The results of this survey, like earlier surveys, were not precise because they were based on a small sample projected into the national population[11].

13. In the absence of reliable information about the numbers of severely disabled people who currently require supported employment, we asked the Department whether they were able to say how successful the supported employment programme had been. The Department told us that they had commissioned some further research to check the 1990 position and that a report was expected in 1998. They added that the provisional findings from the research indicated that it was most likely that the demand for supported employment was between 40,000 and 80,000 people, which to some extent confirmed the findings of the 1990 survey[12].

14. Despite some improvements since 1987-88 the geographical distribution of supported employment provision remains uneven and still largely determined by the providers[13]. Therefore, we asked the Department what measures they were taking to bring about a more even geographical spread corresponding to the spread of the demand. The Department told us that, according to their 1990 survey, there were some parts of the country which were relatively over-provided or under-provided but there was no single geographical area which was over-provided[14].

15. In the Department's view the most important thing they could do to address uneven geographical distribution was to re-balance the programme so that there were more people in placements than there were in workshops and factories because placements were a more flexible form of provision. The Department told us that, as far as they could, they encouraged Remploy and the other providers, local authorities and voluntary bodies, to locate their placements and any new factory and workshop places in areas of relative under-provision, in particular, in London, the East and the West Midlands. However, it was more difficult with local authorities or voluntary bodies because the Department did not have complete control over them[15].

16. The increase in placements has occurred at the same time as a reduction in the number of people in workshops and Remploy factories and surplus production capacity at some locations has inevitably resulted[16]. We asked Remploy what scope there was for co-operation with local authorities and voluntary bodies in the same geographical location in order to reduce surplus capacity. Remploy told us that this was their corporate target but that the potential for co-operation was relatively restricted because there were very few situations where Remploy had similar trades or businesses to the local authorities and voluntary bodies in the same location. Nevertheless, they were currently having discussions with two voluntary bodies about possible co-operation and Remploy expected these discussions to be brought to a satisfactory conclusion[17].

17. We asked the Department what use they had made of the powers granted to the Secretary of State for Education and Employment in the Disability Discrimination Act 1995 to allow him to contract directly with profit-making bodies for the provision of supported employment in order to provide a wider range of job opportunities for severely disabled people. They told us that the Government in 1995 and the current Government had always made it clear that, before the option was taken up, there would need to be wide consultation. That consultation had not taken place and therefore there had been no direct funding of supported employment in profit-making bodies. The Department noted, however, that the private sector was very much involved in the delivery of the supported employment programme through the 5,000 host companies who provided placements[18].

18. An objective of the supported employment programme is to encourage provision of an effective means of progression for people with severe disabilities from a supportive to a more open working environment. But only limited numbers of people leave the supported employment programme for open employment, for example, 310 in 1995-96. Currently the Employment Service are piloting new ways to encourage and manage progressions. Although the Employment Service require Remploy to achieve a target number of progressions each year, contracts with local authorities and voluntary bodies do not include similar targets[19].

19. We, therefore, asked Remploy what they were doing to stimulate an increase in the number of people who progress to open employment. Remploy told us that there was a natural reluctance on the part of their factory managers to lose those people who might be their best workers. However, in Remploy's experience, the people who transferred from their factories into the Interwork scheme or to jobs outside were not necessarily the most skilled; they were more likely to be the people who wanted to go. Remploy said that they encouraged factory managers to increase progressions by setting them targets for achieving as many progressions as possible[20].

Conclusions

20. We note that, in terms of the value for money with which they provide supported employment places, Remploy compare reasonably with local authorities and voluntary bodies. However, places in local authority and voluntary body workshops and Remploy factories, which offer a more supportive environment, cost more than twice as much as supported placements with host firms.

21. Whilst, therefore, we welcome the fact that over the past ten years there has been a 29 per cent shift in supported employment provision from local authority and voluntary body workshop and Remploy factory places to the more cost-effective supported placements with host firms, we recognise that further rebalancing of the programme will take time and will need to be handled sensitively. Nonetheless, we are concerned that no long term target has been set for the rebalancing of the programme towards supported placements with host firms. We note that the Department are reluctant to set targets at a national level because they do not wish to be seen as forcing disabled people from the more sheltered environment of workshops and factories to placements for which they might not be suitable. Instead, the Department expect that discussion on rebalancing should take place at a local level. Without attempting to prejudice the outcome, we recommend that the Department review their existing provision of workshop and factory places in order to assess by 31 December 1999 future requirements for that more sheltered environment with a view to establishing the appropriate balance of provision between workshop/factory places and placements with firms for the year 2000 onwards. The results of this assessment would then inform any discussion on rebalancing taking place at a local level with individual providers.

22. We note the interim results of the research which the Department recently commissioned into local demand for and supply of supported employment and into the added value of workshop and factory places compared with placements. We look forward to hearing the final results when they are published in 1998 and trust that these results will make a substantial contribution to our suggested review of the future requirement for workshop and factory places.

23. We note that, despite some improvements over the past ten years, the geographical distribution of supported employment provision remains uneven and still largely determined by the providers. We are concerned that, particularly in areas of relative under-provision, severely disabled people are consequently being denied the opportunity to work. We are concerned that the decrease in the number of people in workshops and Remploy factories has resulted in surplus production capacity at some locations. Against this background, we urge the Department, when determining their future strategy, to consider how optimum use can be made of any surplus production capacity while securing a more even geographical distribution of provision corresponding to the spread of the demand.

24. We note that the Disability Discrimination Act 1995 allowed the Secretary of State for Education and Employment to contract directly with profit-making bodies as well as local authorities and voluntary bodies for the provision of supported employment but that, before using this power, the Department will have wide consultation with relevant organisations. We are concerned that no such consultation has yet taken place. We encourage the Department to proceed with the consultation process as a matter of urgency with a view to providing a wider range of job opportunities for severely disabled people and reducing the geographical unevenness of the current provision.

25. We note that one of the objectives of the supported employment programme is to encourage provision of an effective means of progression for people with severe disabilities from a supportive to a more open working environment. Against that background, we are concerned that only limited numbers of disabled people leave the supported employment programme for open employment. We also note that the Employment Service are piloting new ways to encourage and manage progressions from supported to open employment. Once these pilot schemes have been evaluated, we look to the Department and the Employment Service to introduce measures to stimulate an increase in the number of people who progress to open employment. We would like to see these measures in place by 1999-2000 so that by the end of that year a significantly increased number of people will have moved into open employment. Finally, we note that the Employment Service have set targets for Remploy as regards the number of progressions into a more open working environment. We recommend that the Employment Service should set similar targets for local authority and voluntary body providers when they contract with them in future.


4  C&AG's Report, para 5a) Back

5  Evidence, p1, para 4-5 Back

6  Evidence, p2, para 6 Back

7  Q3 Back

8  Q12 Back

9  Q11 Back

10  Q81 Back

11  C&AG's Report, 2.23 Back

12  Q2 Back

13  C&AG's Report, para 5e) Back

14  Q2 Back

15  Q3 Back

16  C&AG's Report, para 5d) Back

17  Q42 Back

18  Q12 Back

19  C&AG's Report, Figure 3; and Appendix 1, paras 10-12 Back

20  Q26 Back


 
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