The government will provide more money to help unemployed people who want to set up their own companies, David Cameron has announced.
The prime minister said New Enterprise Allowance projects, offering start-up loans and weekly allowances, could create 40,000 businesses by 2013. He predicted the next few years could be “some of the most dynamic and entrepreneurial in our history”.
The government has doubled the size of the planned scheme.
Under it, those who have been claiming unemployment benefits for more than six months will be offered up to £2,000 of financial support – including a start-up loan and a weekly allowance – as well as advice from a mentor with experience in business.
Applicants will have to provide a business plan which is judged to be viable.
The programme will be launched later this month in Merseyside and rolled out nationwide by the autumn.
- BBC News
8 Comments
They’ve got money to pay for this, but not for disabled people?!
LE: It will cost a lot less than disabled income support does.
I find it all very deja vu, since Australia first developed a similar scheme quite some years ago. The real cure for unemployment is sustained economic growth and removing the barriers to employing people: schemes like this are a stab at the latter, but a very marginal one.
Watching the re-surfacing of blaming the unemployed for unemployment in the US has been somewhat dispiriting, thinking rationally about unemployment is not so hard.
Ditto what Lorenzo said, these schemes are very cheap. I suspect that they have reasonable returns too although the money often doesn’t go to ‘genuine’ unemployed’ (Australia’s scheme, iirc, doesn’t require a long qualification period) it probably pays off anyway!
A friend of mine benefited and has employed 3-8 people (mainly casually) for a few years now.
I guess the important question is were those net jobs, or were those people employed at the expense of another business(es) going bust or making cut backs due to the new competition?
That piece of Lorenzo’s on this issue is very good. It’s long, with lots of links, but well worth a read.
Well since these are unskilled workers, probably not, desipis.
I’m thinking about the going rate for mentors who are actually any good. How many hours required per business plan that would work if the learner has never seen a set of accounts receivable and payable before? Would those with mentoring skills be working as perms in a shrivelled public service?
Any decent mentoring would probably require MORE than the two grand, so if they are merely /available/, but not funded, thus paid /out/ of the two grand…
SL: Thanks for the plug, though I did not think it was that long a post
Desipis: on that worry, any getting jobs to the unemployed would be mere redistribution of work, at a given level of economic activity. There is quite enough blocking of competition to incumbent workers via regulation without encouraging the mentality further.