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← Overview Database of Innovative Social Policies in Europe

New Enterprise Allowance

Country of implementation
United Kingdom
General short description of the innovation
The New Enterprise Allowance (NEA) gives help to unemployed people, including young people, who want to start their own business. The scheme is open to Jobseeker?s Allowance (JSA) claimants aged 18 and over from the start of their benefit claim. Employment and Support Allowance (ESA) claimants in the Work Related Activity Group and lone parents on Income Support have also been able to access NEA support from February 2013. / / Participants will have a volunteer business mentor who will provide guidance and support as they develop their business plan and during the early months of trading. When a participant has had their business plan approved and started trading, they will be able to get: a weekly allowance worth 1,274 over 26 weeks, paid at 65 a week for the first 13 weeks and 33 a week for a further 13 weeks and a loan of up to 1,000 to help with the start-up costs. In addition to this, Enterprise Clubs were set up to provide unemployed joint brainstorming and to share experiences by other self-employed, local business people and advisers. / / The previous Government introduced two self-employment support schemes for the unemployed. The first was introduced as part of the New Deal welfare-to-work programmes. The second was created as part of a package of measures, called the Six Month Offer, that were introduced during the 2008/09 recession to provide additional assistance to jobseekers. These schemes were broadly similar in nature and both have now ended /
Target group
Total Population
Policy Field
  • employment
  • social
Type of Policy
  • public
  • public-private partnership
Duration of the policy
Since January 2011
Scope of innovation
  • Scope: structural
  • Spatial coverage: national
General description of (intended) objectives and strategies
The NEA scheme was designed to assist unemployed people who wish to start their own business. Participants receive support from a volunteer business mentor and can access financial support once they start their business.
Type of innovation
  • new policy, practice or measure
New outputs
  • benefit duration
  • benefit eligibility
Intended target group
Unemployed people, including young people
Working age population
  • main source of income: social protection (social assistance)
Actors involved in policy-making/implementation and/or evaluation
  • agency or national social insurance body (Jobcentre Plus)
  • private for-profit organisations (commercial)
  • private not-for-profit organisations (e.g. Third Sector organisation or NGO)
Clarification of the role of various actors
Jobcentre Plus identifies those who are eligible and interested in setting up a business, and referrs them to a ?mentoring organisation? in the local area which evaluates the individual?s business proposition. If the assessment is positive, the individual will be put in touch with a business mentor selected by the mentoring organisation (which is required to find these volunteer mentors and ensure there are enough of them to work with people on the scheme). The business mentor helps the individual to draw up a business plan. The mentoring organisation judges whether the business plan is viable. If the business plan is approved, the individual can access financial support from the NEA once they have ceased claiming benefit.
Intended output
  • benefit duration
Did the innovation have any outcome related to job quantity?
levels of self-employment
Clarification of outcomes in terms of impacting resilience and labour market inclusion
By August 2013, the scheme had resulted in around 2.000 new businesses being set up each month ? more than 32,000 in total. Over 6,000 businesses were started by people aged 50 or over and 4,5000 disabled people set up their own businesses. According to DWP analysis, between April and December 2011, 78% of individuals were continuously off benefit for 52 weeks after the allowance start; the proportions at 13 and 26 weeks were 97% and 90% respectively. / / References: / - Atkinson, I. et al (2013). New Enterprise Allowance: Qualitative evaluation, DWP Research Report No. 836, London. /
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