The axing by Scottish Enterprise of the Graduates for Business (GfB) scheme -- revealed by The Herald yesterday -- has prompted strong criticism, with questions being asked at Holyrood.
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Scottish Enterprise is promising to replace the programme later this year, after the seven existing staff have been made redundant.
But Professor Nick Kuenssberg has called on the agency to rethink the decision, particularly as GfB recently took over the functions of an equivalent programme for overseas students.
With an international business career spanning more than 30 years and honorary or visiting positions at both Glasgow and Strathclyde universities, Professor Kuenssberg writes in The Herald today: "I am devastated to read of the decision taken to abolish the GfB scheme."
He calls it "an excellent and effective route for graduates to find jobs in industry" and adds: "If there is talk of a substitute scheme, why was this not developed in order to replace GfB at the same time, rather than
leaving graduates and indeed potential employers in limbo?
"It is sad this ground-breaking scheme is being eliminated at just the time England is adopting yet another good idea born and implemented in Scotland."
Professor Kuenssberg -- who writes as a past chairman of Scottish Networks International, a former British Council internship scheme for overseas students which GfB was asked to incorporate -- has called on Scottish Enterprise to rethink its approach.
The scheme dates back a decade in various guises and a new three-year contract worth £1 million was awarded to the current team only last year.
But this month it was abruptly scrapped and, although a replacement scheme is being promised, details are sketchy.
Around 250 graduates a year have had internships arranged, with two-thirds ending up employed by the firms involved and the bulk of the rest gaining an equivalent job as a result of the placement.
Labour’s David Whitton wrote to Finance Secretary John Swinney yesterday saying he was disturbed by the plan to scrap GfB.
"This decision seems to have been made purely on cost grounds and will also lead to seven staff being made redundant, which will probably cost more than the programme takes to run," he wrote.
"Graduate unemployment is a problem and this scheme, which is supported by the business community, has been successful in gaining work experience for many graduates and, in several cases, leading to a full-time job.
"As Scotland emerges from the recession, it is not the time to be cutting a programme that provides valuable experience in the world of work for many of our brightest youngsters."
Mr Whitton has tabled a parliamentary motion calling for the scheme to be reinstated.