A university has been praised for giving a helping hand to professionals who lose their jobs in the recession.

Skills Secretary John Denham has referred to the University of Brighton as one of two supporting small and medium-sized local businesses.

Mr Denham said other universities should use their share of a £120 million VAT “windfall” to establish similar schemes.

Ministers fear white-collar workers may steer clear of the sort of Jobcentrebased state help package to be unveiled shortly by the Government.

But Mr Denham urged universities, which as charities will benefit from the cut in the VAT rate to 15% announced in the pre-budget report, to use the extra cash to offer alternatives.

He said: “I’m pleased that both the universities of Brighton and Staffordshire have come forward and committed to use the extra funding to increase investment in the support they offer local businesses and staff.

“We know that universities are thinking creatively about what support they can offer in these difficult times.

“In particular, I think universities could be a key part of the help we give to those professionals who have recently been made redundant or concerned they are at risk of it.

“These individuals may have been well paid and will often be reluctant to use the services Government provides to help people into work.

“It might be because they feel it is not targeted at them, it is not suitable for people with their qualifications or they are not eligible. I believe universities could plug this gap.”

The University of Brighton has pioneered the ProfitNet scheme, which is designed to help small businesses work together to solve common problems while drawing on academic expertise.

Set up four years ago, the innovative scheme has already worked with almost 500 businesses across Sussex.

Professor Julian Crampton, from the University of Brighton, said: “The university is already doing a lot to help small and medium-sized enterprises and will be working hard during this difficult period to do more.

“In Brighton the vast majority of businesses are small and medium-sized enterprises and the university is pioneering how higher education institutions can support them.”