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The coalition government in the UK is under pressure from the Federation of Small Businesses to extend an internship scheme for graduates.

The internship programme is due to end in March but the Federation of Small Businesses points out that the cost of keeping the scheme running would be far outweighed by the reduction in benefits payments and extra income tax that could be recouped if the internships lead to a permanent job.

The Department for Business, Innovation and Skills, however, said that a final decision about whether to help with the estimated £8 million funding for the future of the internship programme is yet to be made.

Since the internship scheme was launched 12 months ago it has helped over 8,000 graduates to work in paid internships with small companies in the UK.

Chairman of the Federation of Small Businesses, John Walker said: “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 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,” added Mr Walker.

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