THE Federation of Small Businesses (FSB) is urging the Government not to scrap an initiative which has helped provide placements for graduates.

The Graduate Internship Scheme was introduced last year to help offset the high numbers of unemployed university leavers and provide them with valuable workplace experience. Graduate unemployment is currently at its highest level for almost 20 years and the 16 to 24-year-old age group made up 20.5% of the jobless figures at the end of last year.

The scheme, which has supported paid internships for 8,500 graduates in small businesses, is due to end this month. Around a quarter of these placements have led to offers of permanent work.

The FSB says if the Government invests £8m into the programme, at least 5,000 more internships could be created, cutting the benefits bill by at least £1.5m.

FSB chairman, John Walker, said: “The current Graduate Internship Scheme has proved highly successful.

“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.”