New Enterprise Allowance scheme - My story

BathGooner

I've been on the NEA for the last 5 months so I'm nearly at the end of it.
It's basically been really tough but this last month has been my best and if it stays like this then I wont have to sign on again next month when my NEA finishes.
A particular low point was when our tax credits got stopped due to not working their revised hours of 24 the same week as my NEA got reduced to £33. Basically £100 a week gone!
In some ways I've been lucky, Through this forum I found an amazing web designer who built me a brilliant site through which I get 95% of my work through.
Would I advise anyone to go on the NEA? Only if you were planning to start a small business anyway and you already have the infastructure in place and you have another source of income coming in as well (partner?)

perspero

roguedesigner wrote: »

I have also been on this scheme since July and to be quite honest my experience of it has been one of disappointment and frustration. The initial eight week period is supposed to be set aside so that a business plan can be written with the help of a business mentor. I have seen my mentor twice since July and despite asking for assistance in several areas have received none at all.

At our first meeting, I was told that training and workshop sessions would be available to me through the NEA's own provider and immediately asked for a place on several of these. At the second meeting with my mentor, I was told that no training was being provided and if I felt that I needed any I would have to organise my own. That, in itself, is not a tremendous problem as Business Link provide very good support and training for start-ups, but it was less than useful to find this out so far into the initial eight week planning period. Bear in mind that by organising your own training, you are liable for the travel expenses involved as well. It's also worth mentioning that the government, in their wisdom, are virtually pulling the plug on Business Link in November and so the future availability of this excellent free resource is unclear.

In addition to what has been, at least in my experience, a shoddy support network, there is the matter of funding to consider. The total funding package consists of payments up to £2274; breaking this down, what you actually stand to receive consists of:

• £65 per week for the first 13 weeks
• £33 per week for a further 13 weeks
• A loan of up to £1000 may be available (with an interest rate of 10% APR)

So almost half of the funding package is tied up in a loan that you are by no means guaranteed to receive, and for which you are not even able to apply until you have signed off JSA. In other words, you are encouraged to base a business plan on funding that you may not even get. That could be a very nasty surprise a short way down the line and given that many people who turn to the NEA will have little or no funding from other sources, being refused access to the loan could easily sink their business very quickly. I have been unable to find out whether any form of credit checking is carried out in regard to the loan, I would hope that this is not the case as many people who have been receiving JSA for the pre-requisite six month period may have an unpaid bill or two against their name.

My advice to anybody considering the NEA would be to try to find out the experiences of other people in your area of the scheme before committing yourself to it; I was an "early adopter" and was unable to do this. Certainly the impression that I get is that the NEA is a cash cow for the training providers rather than a service user centered scheme.

I have been on this shambles of a scheme for two weeks now, so far all I have got is £25 in debt as I have had to travel to see my so called mentor, I find out today that my "Housing benefit" has been suspended, even after I was told that I had a 4 week "run-on".

It is just a way for a government to cut the jobless figures.

You get no help either from the mentor or JCP staff. All that I have done so far has been off of my own back, from the business plan to a breakfast launch of the business.

I ask the question: Can you really start a business on the promise of a loan of £1000.00? Because the other money is for you to live on.

I could give better advice than the so called mentors.

If you are going down the self-employed route know that it can be very rewarding but, it is also very hard, many late night stuck in front of the computer.
Good luck to all those going down this path.

Chris

Doddie82

Well I am going to sign on, on friday and ask about the NEA scheme, will let you know how I get on,

Wish me luck......... I think I may need it.

ALIBOBSY

Just wanted to add to this thread to give our experience of this scheme.
I guess it depends on the area you are in and how good the advisors/mentors and chamber of commerce are.

OH came off JSA onto this scheme in September, but had been seeing the advisors since the end of August. His experience was a fab business advisor who helped him to do all his business plan and get up to speed with what he needed to do to get up and running. Then the actual DWP advisor who again has been brill and ensured no break in payments when he signed off as well as actually taking the time to send the full reference in the legislation that proves NEA should not been taken into account for tax credits/council tax so we had the info to show should any other dept. try to take it into account.

OH timed it to sign off on the Friday between signing on the weds so they owned him 10 days money which we got the week after he signed off-plus a few days later the job grant which easily carried us through to the first nea payment.

So you can have a good experience with this scheme.

Ali x

rosered1963

Great thread and thanks everyone for the info.

I have been asking JCP for months about the NEA scheme and was repeatedly told they knew nothing about it. Eventually, I got allocated a new advisor and I got everything ready to go self-employed and went to my jcp advisor who referred me to the agency that deals with NEA.

Before anything happens at all, I have to do a level 1 and level 2 course in Business Set Up in order to even qualify for being considered for NEA- that's 2-3 days a week for 6 weeks and other visits for mentor appointments, starting tomorrow. An expensive journey each time (£12 return on buses) and no help with travel.

It does not seem I have a hope of starting on the NEA scheme until this course is completed, and meanwhile, my JCP advisor today said "when can you sign off and start?"

After the course finishes, the mentor goes through the business plan and gives the nod if they agree you can go ahead - usually 6/8weeks from the date of first meeting them at the minimum. The whole process is going to take 2 months as the very least and probably three. Meanwhile Jobcentre want me on the scheme asap while the NEA provider want me to hang on as long as possible.

I am having to turn down prospective clients as I am not self-employed but unemployed until NEA is or is not granted - the timing is not controlled by me, but the NEA agency and the mentor.

I wish I had seen this thread before I began this process!

I think I might just go it alone now, although it's very difficult to go from JSA and housing benefit to what I can earn from start-up to keep the roof over our heads. Husband is unemployed as well now which complicates things further.

If I had a couple of hundred pounds in the bank, I would go for it myself without hesitation, but I don't know what to do really: if I sign off and go it alone, all help with my business from the NEA agency/college will end and I won't get NEA. My jsa will stop and Housing Benefit will be immediately suspended, so I won't be able to pay my rent before the business starts paying.

Perhaps skint unemployed people like me without capital should not be setting up businesses anyway - but mine has clients waiting and I would be immediately in profit as I have virtually no overheads.

Thanks for the thread and it's been great reading your experiences.

ipswichfan

Thought I'd post my own experiences here, as I have been completely worn down by the scheme.

In the first instance, it took me around two months to get referred onto the preliminary part of the scheme. I spoke to advisers who didn't know anything about the scheme. Eventually I was 'referred' but after some time waiting to hear back the referral didn't ever reach the operators and it took me a couple of weeks just to establish that they hadn't received it.

Then started the business planning part of the scheme. My initial meeting was very positive, as I'd been waiting I had much of my business plan already written and I was told it all looked very good and was commended on my organisation. I was put onto a Business Planning training course. Having spent a couple of months fine tuning it, with my business plan complete, I was told by the same person that it was overambitious, unrealistic and too detailed to be accepted. I was told to keep under the VAT threshold for two years, which meant that my entire business model had to change. So I spent another week rewriting my business plan into a work of fiction.

This person was then on holiday so it was about three weeks before I got a list of amendments, which although I didn't agree with I completed in a couple of days.

Some four or five months after I started the process, I finally received a phone call a couple of weeks ago to say my business plan had been accepted by the panel. Things can get moving I thought. Two weeks on and I am still signing on and unable to trade. Once the paperwork has been completed by the Job Centre and the operators I will then wait two weeks for a decision on the loan and up to four weeks for NEA payments.

It has been a total of 20 weeks (five months) since I started this process and of course I'd have been far better off simply signing off when I got my first customer.

As it stands, there is still no guarantee I will get the loan and I've been told that until the paperwork is completed my business plan has been approved but I am not on the scheme. I can't get on and do business because I have to sign on to be transferred onto the scheme.

I've wasted a phenomenal amount of time and energy, even if I eventually get a positive outcome it will not have been anything like worthwhile and there is still a chance I will walk away with nothing.

rosered1963

To Ipswich fan:

Interesting - similar to my own experience.

My business plan has now been accepted (after a lot of pushing by me) and now the paperwork has to go by post to various different people before I am able to sign off. I have had to turn down clients as i was expecting to be up and running last month.
To anyone considering the NEA - the thing to bear in mind that there is a long process to go through between being accepted onto the course, doing the business plan, and eventually being paid NEA allowance - it could be months - so don't get all your clients ready because you can't start straight away.

The most important thing is to get your business plan done - if you can't do it yourself, find someone to help you. Firstly, you need to do a personal survival budget. Next your business plan finances: Start with cashflow forecast, then profit and loss, then balance sheet, in that order.. Do the cashflow for three years and take everything into account. Once you have done the first year, the rest isn't too difficult. Once you have the business plan in shape, you will be accepted onto NEA. If I had known this from the beiginning, it would have helped me.

Even when you are accepted for NEA and signed over, you still have to go to the jobcentre and see your advisor to prove you are trading, so that freedom I was hoping for is not there yet. This is to prevent fraud - people who just want to sign off but aren't actually intending to run a business.

Truegho

But is this NEA Business Plan scheme really compulsory for people who have already tested the waters with their own business, and have discovered that their business has already started to make money, despite the fact that they haven't availed themselves of the NEA, the loan etc.?

rosered1963 wrote: »

To Ipswich fan:

Interesting - similar to my own experience.

My business plan has now been accepted (after a lot of pushing by me) and now the paperwork has to go by post to various different people before I am able to sign off. I have had to turn down clients as i was expecting to be up and running last month.
To anyone considering the NEA - the thing to bear in mind that there is a long process to go through between being accepted onto the course, doing the business plan, and eventually being paid NEA allowance - it could be months - so don't get all your clients ready because you can't start straight away.

The most important thing is to get your business plan done - if you can't do it yourself, find someone to help you. Firstly, you need to do a personal survival budget. Next your business plan finances: Start with cashflow forecast, then profit and loss, then balance sheet, in that order.. Do the cashflow for three years and take everything into account. Once you have done the first year, the rest isn't too difficult. Once you have the business plan in shape, you will be accepted onto NEA. If I had known this from the beiginning, it would have helped me.

Even when you are accepted for NEA and signed over, you still have to go to the jobcentre and see your advisor to prove you are trading, so that freedom I was hoping for is not there yet. This is to prevent fraud - people who just want to sign off but aren't actually intending to run a business.

BigAunty

TheBane wrote: »

Does anyone ever pay back the 1K loan? I know someone who didn't make one payment and the debt collection letters have stopped coming for her now. Has she got away with it?

Is it a private company that administers the loans or is it offered by the DWP?

If its a DWP loan, I do wonder whether it will operate like other loans, such as budgeting loans for claimants, or benefit overpayments. The claimants don't ever get them written off - there's no statute of limitations - they can go under the radar if they stop claiming but the moment they re-apply, their case gets re-activated and deductions are made from their future benefits to claw it back.

I don't know how this operates, just musing on this to stimulate responses and debate.

andyscott

I was sacked 9 months ago from my work after 12 years working since I had my kid.

Since then I have applied for lots of jobs, sent cvs, telephoned employers but had no luck. I hate going to Job Centre but 2 weeks ago I found out about New Enterprise Allowance.


I spoke with an advisor last week and they explained how it worked and told me I would have to get a business plan ready first then arrange an extended appointment to speak with an advisor. Fair enough.

i have always want to run a business but I left school with little qualifications and ended up in poorly paid job so I could never afford to set up a business.

I decided this was my big chance, came across this forum and spent a week using every spare minute looking a posts.

So I go into Jobcentre today and said I want to make an extended appointment to speak about NEA. Advisor tells me that a manager has knocked it back.

WHAT????

I have never officialy talked or applied for it
Never handed any financial forecast
Never handed and business plan
Not even said what type of business

I said this to the advisor and asked why I had been knocked back as I met all criteria for been suitable to apply for it.

He said does not know but will get manager to give me a call.

Im normally really calm but I was raging. I was about to go back and ask to make an official complaint, probably no real point in it though, they would probably end up sending me on a volounteer course doing 40 hours per week and just getting basic benefits.

I dont have family or friends that can just loan out a couple of hundred and bank wont entertain me.