The New Enterprise Allowance (NEA) scheme has helped launch 203 businesses by unemployed benefit claimants on average each week in the UK, since 2017. Older claimants and people in the North West in particular have shown entrepreneurial skills.
Helping unemployed people become their own boss as a route from claiming benefits, the NEA scheme offers claimants a personal business mentor, weekly living allowance and funding of up to £25,000 for their business idea.
New figures released today show a total of 209,000 benefit claimants have been supported since the scheme was launched in 2011, with over 130,000 businesses set up as a result – nearly 20,000 in the last 2 years alone.
Older claimants and disabled people in particular have seized the chance to be their own boss.
Almost a quarter of all businesses created have been started by disabled claimants (over 29,000), with the same proportion started by those aged over 50 (31,000).
The scheme has also provided a platform for budding entrepreneurs from ethnic minority groups. Of all businesses started since 2011, almost 14% were launched by a person from a black and minority ethnic (BAME) background.
The North West proved itself to be the most entrepreneurial region, with almost 20,000 businesses launched by claimants since the scheme began. London and Yorkshire and Humberside were close behind, with an entrepreneurial boost of 15,370 and 13,700 new businesses respectively.
Employment Minister, Mims Davies, said:
Starting a business is an exciting, challenging and potentially life-changing experience. Moving forward from being on benefits to having the power to become your own boss, it’s vital we do all we can to help fulfil the dreams of those with entrepreneurial ambitions and innovative ideas.
The New Enterprise Allowance scheme is supporting people who want to make that journey regardless of their background or any disability they might have. Work coaches stand ready to provide advice and support, across our network of over 600 Jobcentres – helping every claimant achieve their potential.
Today’s figures show the UK’s entrepreneurial spirit is alive and well, and we are backing it.
The new figures come as small businesses across Britain have boomed in recent years. There are over 570,000 more ‘micro’ enterprises (with 9 or fewer staff) based in Great Britain since 2011 – an increase of almost a third.
The number of self-employed people in the UK also reached a record of almost 5 million in June according to latest Office for National Statistics (ONS) figures – with construction the most common industry, followed by science and technology and retail.
NEA is available to people claiming certain benefits, such as Jobseeker’s Allowance or Universal Credit.
Participants in the scheme get a mentor to help with a business plan. Once they start to trade, they’ll also have a mentor for the first year.
Cash support is available through the scheme for up to 26 weeks, with a weekly allowance of £65 paid for the first 13 weeks, followed by £33 per week for the remaining 13 weeks. Claimants may also be able to access a start-up loan of up £25,000.
Further information on NEA.
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