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New Enterprise Allowance

 A Q&A from DWP has been released re the New Enterprise Allowance which they hope will support 10,000 new businesses in 2011/2012.  Pilots in January will lead to full roll out in April.

The New Enterprise Allowance will help unemployed people who want to start their own business and will be available to people claiming JSA for more than six months and who haven’t joined the Work Programme.  This suggests that self employment support within the Work Programme will need to be separate to the NEA.

The NEA will provide access to business mentoring, and offering financial support of around £2,000 which will include:

  • a weekly allowance equivalent to their JSA payments for the first 3 months and half that for the subsequent 3 month period worth up to £1,275, allowing them to establish their business and its cash flow.  This will be paid as a weekly allowance; and

  • access to loan finance of up to £1,000 to help them with start-up costs such as buying their initial equipment.

The government is looking for people to volunteer their services as business mentors to provide guidance and support, so it will be interesting to see what their final delivery model is going to be and whether the days of providers being paid to offer discrete business mentoring are over.  So watch this space.

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