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Small business internships would help graduate employment

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The government has been urged to create 5,000 graduate internships in smaller businesses as a way of combating rising unemployment among those leaving university.

The call from the Federation of Small Businesses (FSB) came after estimates were published indicating that between 35,000 and 40,000 graduates will fail to find work this summer.

With placements falling in larger companies by 28 per cent, the FSB argued that graduates need to be informed of the opportunities available in small firms.

According to research carried out by the FSB, one in five small firms would be willing to take on a graduate.

But, the FSB pointed out, some 45 per cent of firms are unaware that they can run internship schemes.

Small businesses already play a major part in recruiting school leavers, supplying 69 per cent of apprenticeship places. Similar programmes are not, however, quite so widespread for graduates.

Internships, the FSB said, can perform a vital role in bridging the gap between graduation and formal employment. About 25 per cent of graduate internships lead to a full time job for the graduates involved.

The FSB wants the government to set aside 10 per cent of the £32 million pot of money allocated to universities to market and develop internships. The funding would be used specifically to promote some 5,000 internships in smaller firms.

In the longer term, this step would save the government around £600 for each graduate on the scheme because they would not be claiming unemployment benefits.

John Wright, the FSB’s national chairman, said that such a scheme would help businesses progress as many graduates can offer key skills, while the graduates would gain invaluable work experience rather than languishing unemployed.

Mr Wright continued: “The FSB is calling on the government to invest just £3 million of existing funds to market and develop internships in small businesses – creating an extra 5,000 placement positions for graduates in small firms.

“Small businesses are the sector to create and retain jobs and act as a bridge to formal employment. Around 20 per cent say they want to take on skilled graduates. The government must invest in linking up small businesses and graduates now to prevent graduate unemployment spiraling any further.”