Ministers are encouraging employers to offer internships to final-year students who cannot find jobs this summer, raising the prospect that new graduates might find themselves working for little or nothing.

Opinion is split on the likely benefits of the new Graduate Talent Pool, to be launched by John Denham, the Universities Secretary, next month.

The scheme centres on a website that matches employers with suitable graduate interns. The idea is that unemployed graduates can kick-start their careers by gaining valuable work experience, while companies benefit from a temporary injection of fresh talent. The CBI is positive, stating that the more workplace experience that a graduate gains, the better.

Sonja Stockton, of PricewaterhouseCoopers (PwC), the professional services firm and a leading employer of graduates, has advised the Government to set up the scheme. She said: “Great business skills come from strong academic achievement, married with real life and work experiences.”

PwC will not take part in the Talent Pool. It already recruits 1,000 graduates a year, has 200 undergraduate interns and has reached its capacity.

Marks & Spencer is among a handful of high-profile businesses to have signed up, promising to take on 20 paid graduate interns in addition to the 150 graduates and undergraduates it takes on each year.

Network Rail will be taking “up to 40”. Microsoft will take on “some” paid graduate interns on top of the 100 undergraduate interns it takes on each year. It will encourage its partner IT companies to do the same.

The Government said that 40 employers had signed up to the Talent Pool, but it would not say who they were or how many of the hoped-for 5,000 internships they would create. Even if the 5,000 target is reached, the overall impact will be minimal: traditional graduate recruiters are hiring, but surveys suggest that more than half have reduced their intake this year.

Martin Birchall, managing director of High Flyers, the market researcher, predicts that the number of graduates unable to find graduate-level jobs might hit 80,000 this summer. He, too, is sceptical about the Talent Pool, which is being launched late in the graduate recruitment cycle, just in time to get interns in place by the autumn, when universities conduct their graduate employment surveys. “The interns will show as employed,” he said.

Mr Birchall questioned whether proper quality control measures would be in place to ensure that graduate interns get support and training and are not just used to do the photocopying and to make cups of tea. “To provide a graduate with a proper placement takes a lot of work and preparation. Some employers had hoped to have government funding to help with the placements, but this has not been forthcoming,” he said.

Carl Gilleard, chief executive of the Association of Graduate Recruiters, has called on the Government to set up a hotline for interns to report unsatisfactory working conditions. He plans to take on a graduate intern for a couple of months, paid pro-rata at £15,000 a year. “Employers will have to take responsibility for interns and think what they want to get out of them. If employers regard them as a cheap pair of hands, they are going to end up with a very dissatisfied group of graduates,” Mr Gilleard said.

“These are not 16-year-olds wet behind the ears. We are talking about highly educated people aged 21-plus.”

Stephen Uden, Microsoft's head of skills and economic affairs, said that internships could not offer a quick fix and must last at least 12 months to be worthwhile: “In the first few months, you do not get much out of an intern. It takes the investment of time to get the best out of them.”

While supportive of the Talent Pool, Richard Wainer, head of education and skills policy at the CBI, is aware that some companies might find it difficult to take on an intern, even unpaid. “If interns are doing productive work and it is developing value for the company, employers should consider paying them at least the minimum wage. Another thing for companies to consider is whether they want to take on a graduate intern when they might be making other redundancies.”

Wes Streeting, president of the National Union of Students, noted that the class of 2009 was the first to have paid full top-up fees for three years: “It is best if they avoid unemployment at all costs and do something that gives relevant skills and experience. An internship is better than nothing, but far from ideal.”

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