workhouse without walls

The BBC reports new plans under which the long term unemployed will be made to carry out community work.

"Claimants will have to carry out four weeks' community work once they have been unemployed for more than a year. After two years, they will be ordered to work full-time in the community. People who have been signed off sick will have a new medical check with someone who is not their own GP."

The Work and Pensions secretary had this to say:

"The longer people claim, the more we will expect in return. At three months and six months, claimants will intensify their job search and have to comply with a back to work action plan,"

"Work works and it's only fair that we can ensure that a life on benefits is not an option."

Inevitably private contractors will be organising the community work details.

The economic rationale of this is that it's meant to shift the supply schedule for labour across a bit, increasing those in work and decreasing wages: some of those out of work will presumably find jobs, others will accept their punishment. Workers are supposed to benefit because the government's overheads will be reduced.

Johann Hari praised the "reeducation" aspect of this work, but I'm more interested in these contractors. The overheads charged by employment contractors like Manpower and Carlyle Group are around £7 per hour on top of salary paid. Isn't it going to be the government ends up paying a lot more than current benefits provision, into a slush fund for these gentlemen?

I find it hard to believe these proposals please anyone except big capital and historians of the victorian era, who get to see their source material brought to life, but there you are, that's the new thing.