The move is politically explosive and is certain to lead to protests from unions and disability lobby groups.
More than 50 Remploy factories employ 3,000 people, but they operate at a huge loss. They had expected to continue receiving a grant of £111 million each year, for the next five years, from the Department of Work and Pensions.
It is understood that many of the factories will be earmarked for closure as part of next week’s spending review. Remploy’s employment service – which has secured jobs for thousands of disabled people at private companies – will be saved.
Iain Duncan Smith, the Work and Pensions Secretary, and George Osborne, the Chancellor, will face fierce criticism for what will be seen as a callous pulling of services for the least fortunate.
Mr Osborne was criticised for his decision in June’s emergency Budget to bring in a test for the disability living allowance. But Mr Duncan Smith, who has a reputationContinued on as a politician determined to address the causes of poverty and not simply slash budgets, will point to the support that the Coalition still intends to provide for the disabled.
When Peter Hain, one of Mr Duncan Smith’s Labour predecessors, attempted a similar programme three years ago, he faced personal abuse and threats. He eventually closed 29 factories but there were no compulsory redundancies.
There were several high-profile demonstrations against plans to reform welfare for the disabled during the New Labour era. In 1997, protesters threw red paint over Downing Street’s gate and blocked public access to the street from Whitehall. “Blair’s Blood” was daubed on the pavement.
The remaining 54 factories are projected to make losses of £138.6 million this year.
A Whitehall source said: “Remploy factories are effectively paying disabled people to do nothing. Most factories have no work. We realise this is not something that will go quietly or smoothly, but it is important for the Coalition to do this is in the right way.”
Ministers will fear a highly emotive campaign from the unions that will paint the Tory-led Coalition as heartless.
