UK

Graduate internship scheme call from small businesses

Graduates
Image caption Small businesses have hailed the graduate internship scheme as a huge success

Small businesses are calling on ministers to extend a graduate paid internship scheme in England following the rise in youth unemployment.

The Federation of Small Businesses said the costs of the programme would be outweighed by the benefits of less benefit payments and more tax revenue.

The scheme, which is part-funded by the government, is set to end next month.

The Department for Business, Innovation and Skills said no final decision had been made on its future.

The Federation of Small Businesses (FSB) said the scheme had supported 8,500 paid internships since it was launched in February 2010.

A further 5,000 internship placements would cost the government about £8m.

'Future of economy'

FSB chairman John Walker 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."

He added: "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."

Last week, figures from the the Office for National Statistics showed UK unemployment rose by 44,000 to almost 2.5 million in the three months to the end of December. The data indicated youth unemployment rose to a fresh record high, with more than one in five 16 to 24-year-olds out of work after a rise of 66,000 to 965,000.

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