Employers should be paid to offer internships to disadvantaged young people, according to a new report by think-tank Demos.
Firms who give "quality" internships to unemployed young people - such as young offenders and care leavers - should receive "pay-back" from the Government. Employers would receive payment if their intern found stable employment within a year of completing their placement.
Demos argues that the state stands to make significant savings by getting young people who would otherwise be NEET (not in employment, education or training) off welfare and into the workplace. The think-tank wants employers to think of this group as a "non-graduate talent pool".
In June 2010, 380,000 16- to 17-year-olds and 3.4 million 18- to 24-year-olds were unemployed. The 16- to 18-year-olds who are NEET cost the state approximately £4.6 billion per year, the report states.
A Cabinet Office report last year on Fair Access to the Professions found internships significantly increased an individual's chances of employment. But Demos's Access All Areas research found that young people with low qualifications were excluded from this crucial experience, with many internships being aimed at university graduates.
The report recommends that financial rewards should be available to employers offering "quality" placements that give young people an opportunity to build their workplace skills.
Julia Margo, director of Demos, said: "Getting at-risk young people into internships will go a long way to giving them the opportunities and aspirations open to middle-class graduates - we should think of them as a 'non-graduate talent pool'.
"More important than paying people to intern is making sure they learn the skills they need. A quality internship that pays only expenses is far more valuable than one that pays people a low wage to do menial jobs."
Earlier this month, a separate report said employers were breaking the law by offering unpaid internships to young people.