Graduates and small businesses hit by the recession will be eligible to share £50 million, to pay for rapid retraining.

The Economic Challenge Investment Fund, unveiled yesterday, will be delivered through universities and colleges.

It is being funded by the Higher Education Funding Council for England(Hefce) and by individual institutions.

Colleges and universities will be able to provide tailored training and professional development to those worst hit.

The money will pay for retraining for those threatened with redundancy and the newly unemployed. It will also fund support and work experience for new graduates, and guidance in how to manage a shrinking business for companies.

Professor David Eastwood, Chief Executive of HEFCE, said the initiative was designed to meet “urgent and short-term economic challenges facing individuals, new graduates and businesses. We are looking particularly to help small and medium enterprises.”

John Denham, the Universities Secretary, said: “Our higher education sector is well placed to support employers and employees get through these challenging economic times and prepare for the upturn when it comes.”

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