Guidance

New Enterprise Allowance statistics: background information note

Updated 15 June 2022

1. Introduction

This document sets out:

• a short explanation of New Enterprise Allowance and how it works
• information about the New Enterprise Allowance Official Statistics, including:
  • what is included in them
  • how the statistics are put together
  • when and where they are published

2. New Enterprise Allowance

2.1. What is New Enterprise Allowance?

New Enterprise Allowance (NEA) aimed to help unemployed people claiming out of work benefits who wished to start up their own business and was launched on 1 April 2011.

The scheme was designed to support the move into self-employment for those people who want to start their own business. NEA provided mentoring support (provider-led) and financial assistance in the form of the NEA weekly allowance (administered by Jobcentres) to claimants who satisfy eligibility and are referred to the scheme by Jobcentre Plus work coaches. Claimants also had access to the BIS Start-Up Loans scheme should they need additional start-up financial support.

From January 2015 NEA was supported by contracted providers. Prior to this, NEA was available to:

• claimants of Jobseeker’s Allowance (JSA)
• Employment and Support Allowance (ESA) in the work related activity group
• lone parents claiming Income Support

Since the beginning of 2015, eligibility was extended to include Income Support claimants who are sick, dependant partners of JSA and ESA customers, and some Universal Credit (UC) claimants. Participants in NEA worked with a business mentor who provided them with guidance and support as they developed their business plan and through the first six months of trading. Once they started trading and left benefits, or reported a change of circumstance if they were on Universal Credit, they could apply to receive a weekly allowance. If they needed start-up capital, participants may also have been able to access a start-up loan.

The New Enterprise Allowance closed to new participants on 1 January 2022. Support continued for those already accepted on to the programme.

2.2. Payments to NEA providers

The following outcomes could be claimed by providers for NEA from January 2015:

• Start Fee – this is paid to a provider when the participant has been accepted onto NEA and is triggered when the provider records a start
• Completion of Pre Start-up Period Fee – can be claimed by a provider when a participant has been notified of the outcome of the assessment of their Business Plan
• Commencement of Trading Outcome Fee – can be claimed by a provider following both the commencement of trading and signing off benefit (or notification of change, where the participant is on UC)
• Completion of 26 weeks Trading Outcome Fee – can be claimed when a participant has been trading in a self-employed capacity and off benefit for a cumulative period of 26 weeks and within the 66 week allotted time. (UC claimants should have reported/maintained the change of circumstance for 26 weeks).

For more information on the scheme, eligibility wider guidance, see the NEA provider guidance.

3. The Statistics

New Enterprise figures were released as Official Statistics until June 2022. The statistics set out:

• all starts on the scheme by month
• the number and percentage of these that progress to set up a business

Breakdowns are available for individuals on the scheme by:

• age group
• gender
• disability
• ethnicity

Geographical breakdowns are available by local authority.

The percentage of those who started on the scheme, by qualifying benefit, is also given in all cases where the benefit could be identified.

The New Enterprise Allowance Official Statistics series has now been discontinued following the closure of the scheme to new participants.

3.1. Where can I get the New Enterprise Allowance Official Statistics?

The statistics are published on the New Enterprise Allowance official statistics page.

The page also provides access to other employment programme Official Statistics and other related information.

3.2. Publication Dates

The final New Enterprise Allowance Official Statistics were published in June 2022.

3.3. Retrospection

Every effort has been made to ensure that the quality of these statistics is of the highest standard. However, revisions to the statistics in earlier publications may sometimes have been necessary when more complete data became available, particularly for more recent months, when there could be a high level of retrospection.

Retrospection refers to the time period allowed for additional or updated information to be incorporated into Department for Work and Pensions (DWP’s) data systems. The statistics were likely to see retrospection in each publication, particularly for the last six months of data. This is likely to affect the number of business starts particularly as it can be up six months from an individual starting to work with a mentor to a business starting up. There may then be a further period before the provider submits a claim for a particular outcome.

3.4. Revisions Policy

In accordance with Principle 2 of the UK Statistics Authority’s Code of Practice for Official Statistics, statistics within this publication adhere to DWP’s statistics revisions policy, which explains how we will make revisions and inform users of our statistics when they occur.

3.5. Rounding Policy

To reduce the risk of inferring the identity of a claimant from these statistics and other statistics, values are rounded to the nearest ten. Values less than ten, are suppressed and marked with a dash. Therefore totals may not equal the sum of the individual cells.

4. Methodology

4.1. General Methodology

Information on demographics is obtained by merging data across the Labour Market System (LMS) and Provider Referrals and Payments (PRaP) system with the Client database, which sometimes results in unknown values. This is because either we are unable to find a match or the information has not been recorded for the particular claimant.

The PRaP system includes information on starts for claimants on Universal Credit data since January 2015. Currently we are only able to match these claimants on the PRaP system with historic characteristics records in the Client database (for example, claimants with an entry for a legacy benefit like Jobseekers Allowance). As such we expect a higher number of unknown entries in the demographic breakdown Official Statistics.

For those on New Enterprise Allowance before the end of December 2014, a start is defined as the date the claimant first met with their business mentor. This is input by a work coach to the Jobcentre Plus’ LMS.

For those on New Enterprise Allowance since January 2015, a start is defined as the date the provider accepted the claimant on the programme. This is input by the provider on the PRaP system.

For those on New Enterprise Allowance before the end of December 2014, a business start is recorded when the claimant begins claiming the weekly allowance. The weekly allowance is only payable when the participant closes their claim to benefits and commences trading. The claim start date is input by the work coach into the Jobcentre Plus’ LMS.

For those on New Enterprise Allowance since January 2015, a business start is recorded when the claimant starts trading. This differs from pre-January 2015 data in that a claimant who starts trading but does not claim the allowance will be counted by PRaP, while earlier starts only count those claimants that started trading and made a claim.

4.2. Methodological Changes in June 2016

Between April and June 2016 a review of the NEA Official Statistics methodology took place. This was driven by a change in the preferred DWP system from which to collect the NEA data and presented an opportunity to review historic data to ensure that it could be presented in a consistent way with data available from January 2015 under the new provider-led NEA delivery model.

Prior to January 2015 the DWP Labour Market System (LMS) was used to collect information on starts to NEA and business starts. This system is used primarily as a management system by Jobcentre Plus. This system continued to be used as the main source of data for these Official Statistics up to and including the March 2016 publication.

From January 2015 the DWP Provider Referral and Payment (PRaP) has been used to manage the outcome payments made to providers. This system has presented an opportunity to consider the data in a more contextual way, allowing us to consider progress through the scheme from start to business set up and beyond for each new start.

From the June 2016 publication we have switched to using PRaP as the main source of data for data for those on NEA since January 2015.

4.2.1. Data for those on NEA prior to the end of December 2014

Data from LMS does not lend itself to monitor progress through the scheme because starts to NEA and business starts are recorded separately on the system. To link the data to be able to monitor progress for each case, it has been necessary to carry out a one-off data review of NEA data from LMS.

This data review identified 440 starts to the scheme and 80 business starts that were recorded more than once in the data and these have now been excluded.

It also identified 650 business starts that had incomplete information about when they started on the scheme and data for these records has been inferred, resulting in an additional 650 starts being recorded to the scheme.

Furthermore there were 720 business starts which included no data to suggest when these cases may have originally started on the scheme. As there is not enough data to satisfactorily conclude when the individual started on NEA, these cases have been excluded from the Official Statistics.

4.2.2. Data for those on NEA since January 2015

For the Quarterly Official Statistics published in June 2015, September 2015, December 2015 and March 2016 a combination of LMS and PRaP was used to collect data on starts and business start-ups for the period from 1st January 2015 onwards. This is because the PRaP system for the new provision took some time to settle down and for business starts particularly to be claimed by providers and to be visible. Now that the reporting system is more mature the methodology for these statistics has been revised to include data from PRaP only for those referred to the scheme in the period from January 2015.

For those considered for the scheme towards the end of 2014 there is a period of overlap with the new provision as some starts to the scheme in early 2015 and some business start-ups during the year were delivered through the grant funded provision and consequently data for these has been taken from LMS.

As of June 2016, there is no intention to revisit the LMS data for NEA provision, updates for future quarterly statistical releases will be taken from PRaP only.

4.2.3. Data presentation

Prior to the June 2016 publication, the NEA statistics were presented for all starts and business starts in the month these occurred. Data was presented on all starts and not individuals, and starts to NEA were referred to as “mentor starts”.

From the June 2016 publication, data on starts was presented on a cohort basis, with the cohort month being the month of the start to NEA. For starts to NEA the data is consistent with the previous presentation, subject to the changes set out in 4.2.1 and some minor retrospection.

From the June 2016 publication, data on business starts was presented alongside the cohort month in which the start to NEA was made. Previously this had been in the month in which the business start was made. This resulted in some shift of data between months, but overall numbers are consistent with previous publications, subject to the changes set out in 4.2.1 and some minor retrospection. Data from the June 2016 publication also includes presentation of characteristics for individuals for the first time and their benefit when they first started on NEA.