Over the past two years, the government has promoted enterprise as a way to keep unemployment figures down and help boost the UK’s stagnant economy.
The government’s flagship Start-up Loans scheme, which offers young entrepreneurs loans of about £2,500 to help them start businesses, has already been extended to those aged up to 30. Now the government is putting aside another £34m for Start-up Loans which it hopes will support another 7,600 businesses.
Currently some 8,000 start-ups have already taken up the initiative, which offers loans of around £4,500 to be repaid within five years with interest charged at the level of RPI plus 3%, alongside mentoring support.
The rest of the £69m will be used to fund New Enterprise Allowance initiative, due to end this month but which has also been extended until 2014. Launched in 2011 and championed by Dragons’ Den star Levi Roots, the NEA gives aspiring entrepreneurs on Jobseekers’ Allowance access to £1,274 paid over 26 weeks to help fund their start-up. They also receive access to a loan of up to £1,000 and mentoring from successful entrepreneurs.
David Cameron said the allowance has already helped create more than 26,000 businesses in the last two years. More than 6,000 of those businesses were started by people over the age of 50, ‘challenging the idea that entrepreneurial zeal is solely a youthful attribute,’ he said. Critics, however, might point out that it’s the over-50s that are more likely to be made redundant.
The latest labour market figures from the Office for National Statistics show the current youth unemployment rate is 21%, with 960,000 16-24 year-olds out of work, up 9,000 on the previous quarter but down 57,000 on the previous year.