The FSB claims that the financial argument for the scheme’s effectiveness is indisputable. Since its inception in February last year, it has apparently created internships for 8,500 graduates, at a cost to the taxpayer of £13.6m, while extending the scheme to create ‘at least 5,000’ new placements would cost another £8m.
However, the boffins at the FSB have worked out that this investment would actually end up saving the Government money in the long term. How so? Well, those 5,000 new positions would instantly reduce benefit payments by ‘at least’ £1.5m; about a quarter of the interns end up being offered permanent work, so the resulting drop in Jobseekers’ Allowance over the next year would save another £3.37m; while they'd also contribute another £5.4m or so to the tax coffers. Which adds up to much more than the cost of the scheme. So businesses get the extra help, the Government gets the extra tax, and graduates get work experience. What’s not to like?
For the Government, though, it could be a question of priorities. At the moment, the Coalition’s big strategy to reduce youth unemployment has focused on apprenticeships. At the beginning of this month, it announced that it would be adding another £222m to the £1.4bn it’s already planning to spend, to create an extra 100,000 jobs for workers who haven’t necessarily been through higher education. So in these constrained times, they might argue that there's nothing left in the pot to help out graduates - who have, arguably, already had the benefit of a taxpayer-supported education.
When money is tight, perfectly deserving causes are going to lose out; it's as simple as that. But given the current rates of youth unemployment, and the dire warnings of ‘a generation of youngsters consigned to the dole queue’, there's surely a strong argument for pushing measures like this higher up the priority list. Particularly if it's likely to be self-financing in the long term.