Great talent can come from anywhere. If only the government would see it, says Amar Lodhia
Last month I wrote about the government’s ‘out of touch’ policies in driving reintegration of those with multiple social disadvantage. I was specifically referring to the Department of Work and Pensions (DWP)’s social justice strategy and the flaws in the new enterprise allowance (NEA) scheme.
On 20 November, I received a letter from the minister for employment, Mark Hoban MP, saying ‘I was pleased to learn about the success of your organisation in assisting those in the community who face the greatest challenges in securing employment and training opportunities’. The minister then went on to say that the government ‘continues to develop provision which will help unemployed clients with drug and alcohol dependency move closer to the labour market… By 2013, it is hoped that the new enterprise allowance (NEA) scheme will have helped up to 40,000 unemployed people start a business.’
Currently the scheme is eligible to anyone over 18 and who is on jobseeker’s allowance, but not those on incapacity benefits or employment and support allowance (ESA) – which marginalises a large portion of drug and alcohol service users and those accessing our self-employment programme. The minister, who declined to meet with me, evidently needs to go back and understand how the NEA scheme is marginalising those who would provide the most mutual benefit from being able to access it.
We have other serious reservations about the NEA scheme, which is estimated to cost the taxpayer £50m. Firstly, this figure implies that the investment per head is just £1,274 and secondly, if the full 40,000 new enterprises are launched under the scheme, it only represents an increase of 0.83 per cent from Britain’s existing small-to-medium sized enterprise (SME) population – an insignificant rise for a scheme costing that much.
My suspicion of this government’s inability to promote self-employment among disadvantaged social groups was further fuelled when I read chapter 3 of the Social Justice Strategy, which states that in ‘the welfare system this Government inherited… too many people had been written off on incapacity benefits because they have a health condition or impairment, without support to move towards work…’ It is obvious this hypocritical government continues to blame its predecessor, but to me the responsibility of what is happening now is not an inherited problem.
So what should the government do to enable great talent to come from anywhere? Firstly, they need to open up the new enterprise allowance scheme to those on incapacity or ESA benefits. For example, in London and Leicestershire, this could be made available to those who have completed our self-employment programme, E=MC2. Secondly, they should increase the amount invested to at least £5,000 per head.
Thirdly, you will recall me writing about our successful trial of Breaking the cycle last year, a scheme which enables those furthest removed from the labour market to gain a work trial within the growing SME sector, and also training SME employers on how to make it a ‘value-add’ to their business. Despite numerous visits to Downing Street, meetings with DWP and other department officials – and demonstrating results of our successful pilot – the government couldn’t allocate £500k to support the scheme.
I’d be interested in hearing your views. Contact me at email@example.com and follow on Twitter @amarlodhia or @tsbclondon using the tag #DDNews.
Amar Lodhia is chief executive of The Small Business Consultancy CIC (TSBC)