FSB urges government not to axe Graduate Internship Scheme

Here are the facts: graduate unemployment is at its highest since 1992. Almost one million 16-24 year olds are out of work. Youth unemployment has reached 20.5 per cent.

Since February 2010, the Graduate Internship Programme has supported paid internships in small businesses. Some 8,500 graduates have gained invaluable work experience - and some even permanent jobs - through the scheme. But this all comes to an end in March.

In its new paper 'FSB plea to save the Graduate Intern Scheme' the FSB details how the government can more than recoup its investment costs on the scheme within a year.

Supposing that a minimum of 5,000 new internships placements can be made at a cost to government of £8m, there is an immediate saving of £1.5m in Jobseekers Allowance payments. This is compounded by further savings down the line. The FSB posits the idea that if just 25% of interns are then offered permanent work, this would also save treasury coffers a further £3.37 million over the course of one year in reduced Jobseekers 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 of the Federation of Small Businesses, says: "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."

But does the FSB's maths add up? Where does the 25% figure comes from? Surely, many small companies, offered the opportunity to get a subsidised intern in the office, will take one on even if there's no job waiting at the end? Even if there's no resource to make a hire at the end of the placement - because there's no resource, in fact.

There's no evidence that 25% of the paid interns that came through the present scheme ended up with a job. Certainly not that they were offered the £16,000 a year that it would take to generate the tax earnings suggested by the FSB.

It's great to see important causes espoused by lobbying groups, but we need to stop this neverending bandying about of empty figures. We're all tightening our belts. There has to be cuts, sacrifices and compromise. Is the Graduate Internship scheme really as important as, say, the scrapping of Business Link?


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Picture source: Anemone Nemorosa

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