News

August 12, 2011 - Anonymous

Unemployed get help starting up

An enterprise scheme to help the long-term unemployed start up in business has been launched by the Government.

The New Enterprise Allowance (NEA) initiative is open to anyone who has claimed jobseekers allowance for 26 continuous weeks or more.

Under the NEA, participants will get access to a business mentor and, once they develop a viable business plan, financial support. A weekly allowance of £65 for the first 13 weeks is available, followed by £33 for a further 13 weeks. Those taking part will also be able to apply for a loan of up to £1,000 to help with start-up costs.

According to the Department for Work and Pensions, the scheme aims to stimulate enterprise and aims to create up to 40,000 new businesses by 2013. Funding will be delivered by local enterprise agencies and chambers of commerce.

“By expanding the NEW we can ensure that those who find themselves out of work, but with a good idea, get the right advice to turn that idea into a successful business venture,” said employment minister Chris Grayling.

National Enterprise Network chief executive Dawn Whiteley said she welcomed the scheme “in principle”, but voiced concerns that support was only available to those out of work for six months or longer.

“Our view would be that it would beneficial to capture clients sooner, when levels of motivation are still high and before people have eaten into any savings which might assist start-up costs,” she said.

Dr Stephen Bence, founder of Businessfunding.co.uk, said that adequate support needed to be given to those who were “really serious” about business.

“For some fledgling entrepreneurs the scheme will make all the difference, but for others more substantial funding will be required,” he said. “The current reticence in bank lending will remain a major obstacle to their growth and people may need to look elsewhere for funds.”