Universities should help fund internships for undergraduate students on unpaid schemes in a move to increase the number of opportunities for work experience, a Government-commissioned report has suggested.
A review into how universities work with business made 54 recommendations, including a number on how to encourage more so-called "sandwich" degrees which involve some form of work, and ways of increasing internships.
Every full-time undergraduate should have the chance of an internship, said the report by Professor Sir Tim Wilson, former vice-chancellor of the University of Hertfordshire. Firms offering paid internships should be supported by the Government through a tax credit or grant, the report recommended.
Where internships are unpaid, universities should use funds they receive from the Office for Fair Access, which encourages students from poorer backgrounds to go to university, to support eligible youngsters rather than condone a policy that could "inhibit social mobility".
Sir Tim said data on paid and unpaid internships among undergraduates was not collected and he agreed the question of payment was a "very difficult" issue.
Universities minister David Willetts said anyone doing actual work was covered by minimum wage legislation and should be paid, but there were now "highly competitive" internships in the corporate sector which had become part of the interview process.
The report also suggested universities should only charge students on a work placement year £1,000 rather than the permitted maximum of £4,500, and interest charges on student loans should be suspended. Companies hosting students for a year should be given a tax credit or grant, said the report.
Ministers were told there was strong evidence that a placement year improved students' employability, while lack of work experience was a "key barrier" in securing employment.
The number of work placements had fallen in recent years and only a small number of universities now offered sandwich courses, including some which were previously polytechnics or technology colleges.
Business Secretary Vince Cable said the world's best universities were building deeper links with business, adding that the Government will now "carefully consider" the report's recommendations.