They want more sanctions!

A fascinating piece in the Observer reports that "Private firms on payment-by-result contracts have suggested more punishments should have been meted out".  In 2009, 139,000 people had their incomes stopped.  By 2011 it was more than 500,000.  And yet Corporate Watch has documents which show that the companies want more.  In the first 8 months of the Work Programme, jobcentres stopped benefits for 40,000 people, but that was only about a third of the 110,000 that were referred to them.  The rate, however, is going up.  The document shows that Working Links refers the most cases, but A4e is second.  It requested sanctions in 10,120 cases.  3,000 of these were accepted by the jobcentres.  
The procedure in A4e's case, I'm told, is that offices send the cases of non-compliance through to a central office, along with the reasons for this non-compliance (didn't turn up but was in hospital, that kind of thing); that office then refers them for sanctions.  But regularly the explanations get left off, so people find their income has been stopped when they've been told that wouldn't happen.
The article goes on: Richard Whittell from Corporate Watch said the Work Programme appeared to be focused on slashing benefit rather than putting people into work. "These figures give the lie to the government's claims its welfare reforms are about helping people into work," he said.   " By the time it's finished, more people will have been sanctioned by the Work Programme than properly employed through it. Every month thousands of people are having their only source of income stopped and being pushed into hardship. Companies like Serco, Working Links and G4S may not be very good at finding people suitable work, but they're dab hands at punishing them." The private firms say they make their referrals to job centres in line with government guidelines.
Chris Grayling is quoted as saying that "there was no financial imperative for private firms to punish jobseekers".  So why are they doing it?  Is it the case that increasing numbers of people are refusing to comply with the terms of the WP?  Or is there some other reason?