Ingeus Ltd, the employment and placement company run by Therese Rein, has become embroiled in the “welfare-to-work” scandal currently engulfing the UK.

The company is one of three major private sector managers of the Cameron government’s various welfare-to-work schemes, in which unemployed people receiving the job-seekers allowance are put in full-time work placements.

Yesterday, A4E, the second-largest manager of the schemes, was exposed as using people on the program to work unpaid in its own offices. Four people in the group have been arrested on charges of fraud, and the firm’s head, Emma Harrison, has stepped down from her position as chair of the firm. She also had a role as the government’s “family tsar”.

The furore over the program erupted this week after a focus on the involvement of Tesco, with accusations that it was using the scheme as a substitute for actual employment. Crucial to this process was the use of sanction — the program focused on youth is meant to be voluntary, with those on benefits allowed to back out of it within the first week.

But those using the scheme have told the media they have been threatened by client companies and the scheme’s private providers with negative reports that would see their benefits reduced or suspended should they quit the placements.

The scheme offers no training for participant while providing free basic labour to large corporations. Many of them — especially the supermarkets — have recently reduced their workforce by thousands after replacing check-out aisles with self-service check-outs.

For participating companies the welfare-to-work scheme is therefore not only free but actually reduces overall paid employment, offering companies free, flexible labour units, to be moved around and applied wherever necessary for short work periods.

Following the revelations about the scheme and the providers, major groups have started to withdraw at a rapid clip. Oxfam and Sainsbury’s pulled out immediately, with Poundland (everything £1) — the single most depressing store chain in history — also refusing to continue.

Critics of the scheme were denounced as “job snobs” by the minister responsible, Chris Grayling (Royal Grammar, Cambridge, BBC trainee ’85, BBC producer ’86 — just fancy that!), who called the Right To Work campaign a “front” for the Socialist Workers Party, without telling us why that invalidated their arguments.

He later accused them of hacking his emails. He later withdrew the accusation.

Ingeus, whose website features an encouraging video message from Rein, has refused to comment about its detailed involvement with the scheme, citing commercial privacy. But Ingeus is a larger manager of such schemes than the now-disgraced A4E, and stated this week:

“We have not sought the permission of MWA placement providers to publish their names so will not be able to issue you with a list at this time. However, I can confirm that our clients are placed with a wide range of community-based organisations and charities which benefit the local community, in accordance with the provider guidance issued by DWP.”

Well, maybe. But details about A4E emerged at the other end — from FOI requests placed on the Department of Work and Pensions — and there may be a lot more to come. So for the sake of all Rein-Rudd family activities, full disclosure might be a good idea.

It’s great to give unemployed training and the opportunity for meaningful activity. But it’s becoming clear — not that it was ever in doubt — that such schemes are postmodern peonage, designed to give the appearance of action on structural unemployment while giving major corporates a profit lift. No one with any association with Labour should have any part of them.