Cheaper? NO, it's the expensive option
What WorkingFromHome is describing is the economic multiplier effect, but more of that later.
WTF, 200 workers, £50M pa, that’s £250,000 each pa, OK that a gross oversimplification, but if you assume an average annual salary of £50K that’s still only £10M, that would seem to imply that there is £40M tied up in plant and services, which seems high to me, either HP are charging the gruberment a very high premium on these workers or they have some very nice PCs on their desks.
Consider what happens to the 10M in wages to the workers, the money doesn’t magically disappear, these workers spend their money locally (well most of it) in local supermarkets, DIY stores, etc. part of that spend becomes wages for the people who work in these places and also spend their wages locally. In addition and the owners of business buy their product from suppliers who also employ people who will spend their wages locally and so on.
So the economic effect of the £10M is much greater and I have seen this multiplier effect expressed as anything from 2 to 25, so potentially that £10M can become anything from £20M to £250M of activity in the economy.
Conversely, by removing that £10M of wages from the workers is the same as removing £20M to £250M from the economy with a corresponding loss of tax revenue for the grubberement who will also have to pay welfare to the ex-workers.
Slightly simplistic calculation but I think it illustrates the point.
It seems to me that the biggest saving would be for the DPW to employ these people directly and cut out the middle man…