The government has announced it is to give more money to Remploy, the organisation that provides work for disabled people, to help it modernise.
Minister for disabled people Anne McGuire said the company will be given cash so that it becomes financially sustainable and can support significantly more disabled workers.
Remploy currently supports 9,000 disabled people through a factory network and supported employment programmes.
A report published earlier this week set out possible solutions to the challenges facing the company.
It showed that the average annual subsidy for Remploy factory workers is £18,000 per person, with the highest subsidies more than £48,000 per person. This compares with other supported employment that costs £5,000 per person per year.
The report put forward a range of possible scenarios for the business – from ‘no change’ to complete closure of the factory network.
McGuire said the government would give Remploy additional funding of £111m over five years to prevent immediate closures. But she made clear the company would need to modernise to become financially sustainable and support significantly more disabled staff into work.
“The report shows that simply keeping the status quo will neither help increase the number of disabled people supported by Remploy nor be a good use of public money,” McGuire said.
“I will be asking the board of Remploy to bring forward a five-year restructuring plan. I expect that full and meaningful consultation with the unions and employees will take place as this strategy is developed. I will also be asking for proposals which protect Remploy’s disabled employees from compulsory redundancy.”
However, trade unions representing employees at Remploy have passed a vote of no confidence in the board.
The unions claim to have identified a “number of inappropriate and rash investments which have led the company to sustain massive losses, putting the jobs of thousands of disabled workers at risk”.
The union consortium is calling on the government to replace the board “with people with the skills and vision” to take the company forward.
Jennie Formby, national secretary of the T&G and chair of the national consortium, said: “Disabled workers in Remploy deserve better leadership than this board can provide.”