With graduate unemployment at its highest since 1992, the Federation of Small Businesses (FSB) is urging the Government to extend its highly successful Graduate Internship Scheme, due to come to an end in March 2011.
Unemployment figures to the end of December 2010 showed that almost one million 16-24 year old are out of work and that youth unemployment has reached 20.5 per cent. Many of these will be graduates that have not managed to find a job since leaving university.
Since February 2010, the Graduate Internship Programme has supported paid internships in small businesses for 8,500 graduates. However, this scheme will be scrapped in March 2011.
In its new paper ‘FSB plea to save the Graduate Intern Scheme’ the FSB details how, through investment to extend the scheme, at least 5,000 new internships placements can be made at a cost to Government of £8 million – instantly reducing benefit payments by at least £1.5 million.
With 25 per cent of interns being offered permanent work this would also boost Treasury coffers by a further £3.37 million over the course of one year in reduced Job Seekers Allowance payments, and add a further £5.4 million in tax payments, as well as boosting the productivity of the UK economy.
John Walker, National Chairman, Federation of Small Businesses, said:
“The current Graduate Internship Scheme has proved highly successful, with some interns going on to start their own companies and others being offered full-time positions with the business they interned for.
“The investment needed to keep the scheme going would be more than outweighed by the contribution that the Treasury would see in reduced benefits payments and the increased tax-take from those that gain employment as a result of the internship.
“The UK’s young people are the future of the economy, yet we are seeing youth unemployment approaching one million. It is time that the Government invested into this vital sector so that we don’t see a generation of youngsters consigned to the dole queue.”