New Enterprise Allowance

Work and Pensions written question – answered on 12th September 2013.

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Photo of Toby Perkins Toby Perkins Shadow Minister (Business, Innovation and Skills)

To ask the Secretary of State for Work and Pensions with reference to the answer of 31 August 2012, Official Report, column 87W, on New Enterprise Allowance, whether it remains the case that the scheme will not be extended beyond 2013.

Photo of Michael McCann Michael McCann Labour, East Kilbride, Strathaven and Lesmahagow

To ask the Secretary of State for Work and Pensions if he will estimate the cost to the Exchequer of doubling the capacity of the New Enterprise Allowance Scheme.

Photo of Mark Hoban Mark Hoban The Minister of State, Department for Work and Pensions

We have recently announced the extension of the new enterprise allowance and have therefore considered the cost of running the scheme for a further 15 months for the duration of the extended period. Referrals to the new enterprise allowance will now continue until the end of December 2014. We are making an additional 60,000 mentoring places available, ensuring that access to business start-up support is available to claimants who wish to move into self-employment.

Latest new enterprise allowance (NEA) statistics published on 21 August 2013 showed that from April 2011 up to and including May 2013 there have been 54,410 starts with a NEA business mentor and 26,160 starts to the NEA weekly allowance.

The administrative costs for NEA participants are determined locally. The maximum cost per person is £600 (although in some cases is lower). We are providing additional administrative funding of £35 million to meet this cost.

The NEA weekly allowance is payable over 26 weeks and is worth up to £1,274.

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