During the recession, many workers left without jobs turned to self-employment in order to utilise their skills and make ends meet. Unfortunately, however, many found that the lack of financial support due to banks restricting lending limited their growth opportunities – a factor which boosted the closure rate simultaneously.
Levi Roots is a NEA mentor
Yet it now appears that a government initiative designed to support small businesses has had huge success in re-energising the entrepreneurs of the UK. Since its initial launch in 2011, the New Enterprise Allowance (NEA) scheme has allowed for the creation of 2000 businesses per month, bringing the total number of beneficiaries to over 26,000 to date.
In principle, the scheme is very simple. Workers on Jobseekers’ Allowance can apply for funding of £1,274 paid over a 26 week period in order to acquire premises and equipment required for their start up, thus enabling larger numbers to take the step from unemployment to self-employment.
They also receive assistance from successful entrepreneurs in the form of a mentoring programme, and have full access to a loan facility in which they can borrow up to £1,000.
Yet it is not only young people seeking work who can benefit from this scheme. Of the total number of successful applicants, over 6,000 have been over the age of 50 according to the Department of Work and Pensions.
Elizabeth Hazeldine, 50, is one such entrepreneur who has benefited from the all-round support offered by the NEA. She now operates Henley’s Heritage Walks and believes the NEA offers older jobseekers opportunities which were not available to them before.
She says; “Losing your job at any time is always upsetting, but losing it when you’re on the wrong side of 40 is even worse.
“The NEA gave me the opportunity to move into self-employment with the backup of a weekly income.”
Additionally, 4,000 workers granted a place on the scheme so far have been categorised as “disabled”. With disabled workers often finding it extremely difficult to gain full time positions due to factors relating to a medical condition, self-employment gives many the flexibility and accessibility required to earn an income.
Mark Hoban, the UK’s employment minister, believes that the mentoring aspect of the scheme is a huge part of the success rate, obviously along with the substantial financial support.
He says; “The New Enterprise Allowance is a great example of the aspiration nation in action – [The] government offering support to people with ideas, as well as the can-do attitude to turn them into successful enterprises.”
Reggae Reggae Sauce creator and successful entrepreneur, Levi Roots, agrees that the scheme has proven invaluable to start-ups. He is just one of the mentors available for assistance during the initial period of setting up.
He says; “It’s brilliant. When I set up my business, I had to make it work before I got any investment.”
Do you believe schemes of this type will aid not only small businesses but the economy too, or should the government be wary of mass hand outs as “bad debts” were a main cause of the banking crisis which triggered the recession?
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