Students facing dole to be offered temporary jobs under rescue scheme

Published on Saturday 10 January 2009 18:53

THOUSANDS of students who are facing unemployment when they leave university could be rescued by a Government scheme to encourage companies to hand out temporary jobs.

British companies are being urged to create extra positions for new graduates to stop students from swelling the numbers of unemployed.

The National Internship Scheme, which was announced yesterday, has already been embraced by four top companies including high street bank Barclays and US software firm Microsoft, who have agreed to offer up to three months' work to graduates.

The Government is in crisis talks with more firms to get them to sign up to the scheme, which would help avoid unemployment figures soaring after students graduate in the summer.

Around 300,000 undergraduates are expected to complete their university studies this summer, but they face a bleak jobs market as firms lay off staff to survive.

Unemployment is growing fastest among 18- to 24-year-olds, with nearly 600,000 out of work in the three months to October last year, a rise of 55,000, according to the latest official data.

Careers advisers based in universities have reported almost all existing internship places for graduates, which do not start until the summer, have already been filled as people were anxious about the lack of jobs.

The National Internship Scheme would encourage businesses to set up short-term jobs for graduates who fail to find permanent work, on top of the internships they regularly offer to young people. The jobs would be modestly-paid, but would allow graduates to live on a similar amount as a student loan.

The Westminster Government's universities minister John Denham said students would be more employable at the end of their internship, and some would be kept on by the companies they are placed with.

He added that the Government had a responsibility to help the graduates by setting up the scheme. "At the end, they will be more employable, and some of them will get jobs. Employers won't want to let good people go," he said.

"These are the children of the baby boomers. They will be a very big group. We can't just leave people to fend for themselves."

David Blanchflower, an economist and member of the Bank of England's Monetary Policy Committee, added that the latest unemployment figures for young people were "scary".

He said: "We don't want these spells of unemployment to get long. A spell of unemployment is bad when young and the longer it is, the worse it is. We want to do everything to prevent it becoming long-term unemployment."

The Government has not made clear whether businesses would receive any extra funding for creating the graduate jobs, as the scheme is still in its early stages of planning, which has cast doubt on whether more companies will join the project.

Shadow skills secretary David Willetts also voiced concerns about the size of the project. He said: "A small number of businesses taking on graduate interns is welcome, but this does not match the scale of the crisis facing young people trying to find jobs.

"That is why we have proposed focusing more than 500m in the ineffective 'train-to-gain' programme, on helping young people get apprenticeships and worthwhile job opportunities."

The new scheme comes after last week's announcement from the Government that 140m of funding will go towards 35,000 extra apprenticeships next year.

Prime Minister Gordon Brown will host a meeting tomorrow with business leaders.