Remploy bidders offered wage subsidy

Employers who take over any of the 36 state-owned Remploy factories facing closure will be offered a short-term subsidy of up to a third of the wages of the units' disabled workers, the government has announced.

The £10m concession has been announced by ministers in an attempt to firm up bids for the factories, which have been declared unviable in their existing forms. The deadline for submission of business plans has been extended.

There have already been 44 expressions of interest, but potential bidders have asked for financial support if they are to take on the risk of the loss-making units.

The government announced in March that the 36 factories, which provide sheltered employment for 1,500 disabled people, would close by the autumn unless they were taken over. The future of Remploy's remaining 18 factories, considered potentially viable, would be reviewed on the assumption that all options would be "outside government control".

The announcement came in response to a review that found the average subsidy for each job in a Remploy factory was £25,000, and that the money could achieve more if spent helping disabled people find and retain jobs in the mainstream labour market.

Most disability organisations support the decisions in principle. But trade unions representing Remploy workers have launched a campaign to save the factories, arguing that disabled people stand little chance of finding other jobs at a time of high unemployment.

The wage subsidy concession follows an earlier offer of funding worth up to £10,000 a time for Remploy staff who may be developing plans to take over any part of the business.

Under the terms of the wage concession, new employers would be able to claim up to £4,800 for each employee in the first year of operation, £1,000 in year two and £600 in year three. The average annual pay of Remploy shopfloor workers is £13,800.

The new deadline for submission of business plans by prospective bidders is 25 June.

Maria Miller, minister for disabled people, said: "We've always said we wanted to safeguard as many jobs as possible and we have listened to those who have already come forward and bid for the factories. That is why we are now offering this extra support which will add to the variety of innovative and enterprising bids."

Remploy was established after the second world war to provide employment for people disabled in the conflict.