The Graduate Internship Scheme, which matched thousands of graduates with small businesses, has been scrapped
Nick Clegg recently spoke passionately about how internships should be open to all promising candidates rather than career launch pads for those with exploitable connections. What he neglected to mention was that the government had just closed a state-funded internship programme to help unemployed graduates find work.
During its year of existence the Graduate Internship Scheme paid for 8,500 graduates to be matched with small businesses who had signed up with universities and colleges, and a quarter of those were offered full-time jobs at the end of their stint or set up their own companies. Moreover, startup businesses which could not afford to pay extra staff salaries were able to benefit from the skills of the graduates they took on.
"The investment needed to keep the scheme going would be more than outweighed by reduced benefits payments and the increased tax-take from those that gain employment as a result of the internship," says John Walker, chair of the Federation of Small Businesses, which campaigned for the government to reinvest in the scheme.
Currently, it is mainly large corporations that can afford to offer paid work experience to students, and with student debt spiralling fewer graduates can afford to commit to unpaid internships with smaller companies. But as increasing numbers of students compete for a dwindling supply of jobs, experience and contacts are often the only passport to a career.
Cara Stevens had been unemployed for three months after graduating in fashion, textile and business studies from Brighton University, then won a placement with Appleby Parva, a startup company selling luxury British-made accessories for men. The Higher Education Funding Council for England (HEFCE) paid her the minimum wage during the posting, enabling her to come off jobseekers allowance, and she has now found full-time work in a TV costume department.
"I'd done unpaid experience at various fashion houses, but working all hours for free starts to make you feel exploited and I'd come to the end of my overdraft," she says. "I spent the six-week placement doing web design, teaching the staff about Photoshop and drafting press releases and it has massively helped me start my career by filling out my CV and giving me insight into how to start up a business."
Appleby Parva's founder, Jim Watson, says the scheme gave his business priceless resources. "Most of our interns have been designers who have injected a creativity we lack and could never have afforded to employ, and all of them have got jobs on the back of their work with us. We'd give them time off to go for interviews and they'd use their work for us as a portfolio."
Watson is in discussion with the colleges and universities he'd signed up with about how the reciprocal arrangement can be continued without government support, but points out that the administrative aspect of the scheme was worth more than the funding: "We'd tell universities what we were looking for and they'd match us up with suitable alumni. Because the government was paying their wages we were not officially employers, so were spared all the red tape. We're still being approached by graduates wanting to work for us but I have qualms about employing people for no money."
Graduate unemployment stands at its highest level since 1992, but the Department for Business, Innovation and Skills has no plans to resurrect the programme which, it says, was introduced as a recession measure. A spokesman says: "The HEFCE is evaluating the opportunities for higher education students and graduates to undertake high-quality work experience and is due to report at the end of May."