Not quite as appalling as it sounds: it's voluntary service in the community, not military service, for 16-year-olds - they would be signed up automatically, but would be able to opt out, so it is just about voluntary. Much as I hate crediting the Tories with a good idea, this sounds rather like one. Questions are, will they have time to implement it before the next election, do community groups want hordes of teenagers who may not want to be there (despite the possibility of an opt-out) descending on them, and shouldn't they be studying for their GCSEs in their spare time?
This sounds a bit like a rehash of the National Citizenship Scheme that Cameron launched and heavily promoted.
Fundamentally if this is about community work and allowing 16 year olds to gain skills and experience then I have no issues in principle. But there are a few issue in practice.
First - resourcing. This is cost a load and as others have pointed out for this to work properly the young people will need to be carefully supervised and that will cost the organisations involved time and money. So it will be a cost for most organisations that choose to be involved and they will expect recompense.
There is another issue - it will be challenging to actually make this compulsory. There are many reasons why some 16 years olds simply won't be able to do this, for example caring responsibilities or those who are required by family to work to make household budgets work. Certainly the NCS was voluntary. And here is the nub - those least likely to be able to participate are perhaps those most in need of it - to gain valuable experience, skills and networks. With the NCS realistically it became a jolly for middle class kids (who probably already had these experiences, e.g. through scouts or DofE) to participate in a few weeks of activities paid for from general taxation. As an example my two eldest kids did the NCS, which involved two separate residential week activities, at a cost of just £50.
Of course, if this has any semblance of a militaristic element to it, then I would be implacably opposed on principle.