Remploy setback could be fatal

Remploy Factory, Banbeath Industrial Estate, Leven
Remploy Factory, Banbeath Industrial Estate, Leven
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LEVEN’S Remploy factory has been put under a ‘sentence of death’ by the UK Government according to local MPs.

Lindsay Roy member of Parliament for Leven spoke out after Work and Pension secretary Iain Duncan Smith refused to extend financial support being offered to prospective buyers of the disabled workers factory at the Banbeath Industrial Estate.

In a disappointing letter to former Prime Minister Gordon Brown the MP for Kirkcaldy, Mr Duncan Smith said the Government had already made it clear no extra money would be made available – other than that previously declared.

He added: “We believe that funding currently used by Remploy to support its factories can be better used to support many more disabled people into work and the transitional funding made available strikes the right balance.

“In our view, any additional financial support over and above that already made available will dilute the focus on people building sustainable businesses, at least in the short term.”

Angered by the letter Mr Roy, along with Mr Brown and Thomas Docherty MP for Dunfermline have since written back expressing their disappointment at what they see as Mr Duncan Smith’s lack of willingness to support both the Leven and Cowdenbeath factories in Fife.

They replied: “Your reply and the procedure you are adopting suggests to us that the two factories are under a sentence of death and we wish to impress upon you that we have at least one bidder ready to expand the output, not contract it.

“When you say ‘funding currently used by Remploy to support its factories can be better used’ and that you want transitional funding made available to ‘strike the right balance’ you are adopting a one-size-fits-all approach.

“This fails to recognise the unique situation of these factories, with full order books but large inherited overheads which cannot be eliminated overnight.”

The MPs highlighted the factories are being asked to make a move from losses equivalent to £20,000 per employee to viability with a subsidy of just £3200 per employee in the first year - something they think is “virtually impossible” without shutting plants or decimating the workforce.

Despite the setback the MPs have vowed to keep fighting, they added: “We will not allow an inflexible letter from the Work and Pensions Secretary to close the door on financial support that could secure the jobs and workload of two factories.

“The sixty year old factories at Leven and Cowdenbeath are high quality manufacturing assets earning export revenue but are under a sentence of death if a higher level of financial support is not raised.

“We will continue to press for a more flexible form of financial support.

“We have been set back but we will not give up. We have eight indications of interest, six of them from private companies and two from social enterprises and we will press on for a rescue.”

Mr Duncan Smith further announced ‘negative consideration’ bids could be accepted from companies for the sites or parts of them if they provided value for money for the taxpayer.

Following that the MPs have asked for clarification of the criteria used to decide the lead bidder.

They would like it made clear the successful bidder will be the one who will keep both factories open and deploy the largest number of the existing workforce.
Time is beginning to run out - all business plans from interested parties have to be in by March 28. Plans will only set out proposals for assessment and are not a formal bid.

Formal bids are expected to be needed by the middle or end of May.