Remploy wants to cut State shackles

REMPLOY, Britain's biggest employer of the disabled, is in talks aimed at persuading the Government to relax rules that restrict its ability to fund expansion.

The company receives about £100m a year from the public purse and generates its own revenues of £156m. But chairman Alan Pedder says it needs to be able to tap other sources of finance to accelerate its move into new industries and to boost profitable business lines. These include contracts with companies such as Ford, Unipart and Toshiba.

As a public corporation, Remploy needs Government permission to take on any loans.

The talks come as it is about to sign 13 trading agreements, mainly with retailers, which should boost the numbers of employees the company can help into the workforce. Already Asda, B&Q and the Co-op have agreed a national strategy with Remploy that Pedder predicts will mean hundreds of disabled people moving off its books and on to the High Street payroll.

Pedder, who spent a lifetime running cutting-edge businesses for ICI before becoming Remploy chairman, said: 'We have to diversify into modern industrial sectors. We have to replace our traditional operations by moving into new sectors or changing our position in the marketplace.'

Pedder has wasted no time in seeking to ensure Remploy does both. Out has gone low-margin production for Marks & Spencer and in has come more profitable work for fashion houses. Remploy's textiles business is now growing, unlike most of its British competitors.

The company may still make bodybags for the US military and remain the largest maker of furniture for schools, but it is in the new service sectors where its 12,000 employees are achieving most growth. It recently signed a white goods recycling agreement with Comet and is expanding its computer recycling business in London.

Remploy is also one of the major operators of closed circuit television systems and is a large supplier of employees for call centres - one of Britain's fastest-growing sectors.