New Enterprise Allowance Rolling Out Nationally

It has apparently proved successful during the trial run in Merseyside this year, but will the Government’s New Enterprise Allowance (NEA) prove itself as effective nationwide? The scheme works with the long-term unemployed (receiving Jobseekers Allowance for at least 26 weeks) to provide them with the opportunity to start their own small business by offering access to a business mentor who will work with entrereneurs to put together business plans. They will also receive a £65 per week stipend for the first thirteen weeks (reducing to £33 per week for the subsequent thirteen weeks) and in addition the entrepreneurs will have access to a £1,000 business loan.

In total the package is worth £2,274 for applicants, but this really is a tiny amount of money when compared to the average business set-up costs, and so the question has to be asked about whether this scheme can actually get people back into work long-term and generate a few thousand jobs let alone the 40,000 predicted. There are also questions over the six month wait after which many people will have used up any saving they had which could have gone towards setting up their business. Surely would-be entrepreneurs need to be targeted earlier?