Remploy is proposing to close 36 of its 54 factories, with potential compulsory redundancies of more than 1,700 disabled workers.
Minister for disabled people Maria Miller said the Remploy board was proposing to close the sites by the end of the year because they were unlikely to achieve independent financial viability.
She said the £320 million budget for disability employment has been protected, adding that the money will be spent more effectively.
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| Minister for disabled people Maria Miller said Remploy was proposing to close 36 factories by the end of 2012 |
In a written ministerial statement responding to a Government-commissioned review into disability employment, Ms Miller said savings from policy changes being announced will be used on "proven employment programmes" to benefit "many more" disabled people.
The minister said she had assessed "very carefully" the needs of Remploy workers, as well as the 6.9 million disabled people of working age who could benefit from greater specialist employment support.
She said: "The Government will reduce its current subsidy to Remploy from the beginning of the new financial year so that we cease funding factories which make significant losses year after year and restrict funding to those factories which might have a prospect of a viable future without Government subsidy."
Remploy will shortly begin consulting with unions on the proposed closure of the 36 factories and on the potential compulsory redundancy of 1,752 people at the sites, most of them disabled workers, she said.
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