Fifty thousand more college foundation degree places are needed to combat youth unemployment, the Liberal Democrats said this week.

The party said it is determined to put further education colleges at the forefront in providing higher education. A policy document published today backs calls for more colleges to gain foundation degree awarding powers by simplifying the process.

The document A Lifeboat for the Lost Generation - Tackling the Challenge of Youth Unemployment also says that colleges should be able to make direct bids for funding to the Higher Education Funding Council for England.

And it says that colleges should also be able to reduce the expense of acquiring foundation degree awarding powers by allowing them to form consortia, making franchising arrangements or even by forming a national awarding body.

Announcing the proposals in Newcastle, party leader Nick Clegg said: “The Government’s shamefully inadequate response allows young people to fester on benefits for almost a year before offering real help, while the Tories are typically silent on what they would do.

“We must provide a lifeboat to this lost generation. Funding extra university and college places, introducing a paid internship scheme and creating more apprenticeships would be vital support for young people as they enter the workforce this autumn.”

The internship would pay training allowances of pound;55 per week and additional apprenticeship places would allow more young people to train in the workplace.

Other proposals included 10,000 more university places and a new ‘90-day promise’ to make available a place in work, training, education or an internship to those unemployed for three months, instead of the current 10 months.

The party says that all the proposals would be paid for by diverting some of the money the Government is wasting on the VAT cut, scrapping the cut now rather than in January.

Unemployment among 16 to 24-year-olds has risen by 17.2 per cent in the last twelve months compared to 7.8 per cent for the whole population.