New Enterprise Allowance (NEA) Phase 2 will build on the success of the current NEA scheme and act on the recommendations of the review undertaken by Michelle Mone. The current New Enterprise Allowance (NEA) scheme is designed to support DWP customers of working age move into self-employment. It provides business advice and support, particularly business mentoring, to help out of work participants who want to move into self employment develop their business plan, start trading and offers further support in the 1st 26 weeks of trading.
NEA Phase 2 will also offer support to already Self Employed people in receipt of Universal Credit in the early years of Trading.
NEA Phase 2 will be delivered via contracted provision across Great Britain in up to 14 Contract Package Areas from 3.4.2017, with an initial referral period of 2 years up to 31.3.2019, with these participants being supported on programme until 30.9.2020.
DWP reserve the right to extend the contracts for up to a further 2 years subject to funding availability and performance.
The funding available for NEA provision for this period is estimated to be 35 000 000 GBP.
NEA Phase 2: Customer Journey:
Those eligible for NEA support will discuss their self-employment options with their work coach who will, where appropriate, refer them to the 1st stage:
— Link-Up: Start-Up. New.
This is a new workshop, called Link-Up: Start-Up, which will mark the beginning of the NEA process. All eligible claimants will be referred to this workshop 1st, where they will be given an overview of what being self-employed means for them and the level of commitment required to set up a business, etc. The workshop will also cover how being self-employed will affect their benefits (for those on UC this will include the expectation of earnings from the business reaching the Minimum Income Floor within the 12 month start period). This workshop was 1 of the Michelle Mone recommendations.
Those claimants who are still interested in pursuing self-employment after the Link-Up: Start-Up workshop will be referred to the core NEA offer:
— NEA.
The core NEA is based very much on the existing NEA scheme, with our providers conducting an assessment of the viability of an individual's business idea. Once accepted onto the scheme participants will have up to 12 weeks of mentoring activity focused on the development of a business plan. The mentoring will be supplemented by the delivery of workshops focused on particular aspects of self-employment such as financial planning and marketing. At the end of this phase, participants will be expected to submit a business plan to the provider for assessment. Only those with approved business plans will be able to progress to the next stage of the scheme.
— Business Development phase. New.
This phase is optional and will last for up to 13 weeks during which time participants will be able to undertake additional work aimed at building a successful platform for their business launch. For example, to undertake additional market testing or to apply for capital support such as a start-up loan. This phase formalises the existing 13 week period that participants have to decide whether or not to commence trading. Those who feel ready to progress immediately to trading after their business plan has been approved, will be able to by-pass this stage. We anticipate strengthening this will also mean those UC claimants who do choose to start a business will be ready to start trading immediately which should help with the Gainful Self-Employment Test.
— Post-trading support.
This remains largely unchanged from the current post-trading support. The allowance element of the NEA will continue to be paid for up to 26 weeks, however the support available from our NEA providers will continue for up to 52 weeks (previously this support was in place for 26 weeks). This will bring the post-trading mentoring support into line with the start-up period within UC, and meets another of the recommendations of the Michelle Mone review. We will also build the requirement into contracts that providers should seek to hand-off or refer participants to external business support, such as growth hubs, at the end of their participation in NEA Existing self-employed.
NEA Phase 2 will also include provision for UC claimants who are already in business. The intention is to deliver mentoring support to support this group increase business earnings, help them to achieve an income level to at least equivalent of the minimum income floor. This is a brand new area of support that will require different payment outcomes.
Eligibility:
Unemployed: Eligibility remains as with the current programme:
— Job-seeker's Allowance (JSA) claimants;
— Employment and Support Allowance (ESA) claimants;
— Income support claimants (lone parents or people claiming as sick);
— Some Universal Credit customers. Eligibility of Universal Credit claimants to be specified but this is likely to include some claimants who fall within the following conditionality groups:
i. All work related requirement;
ii. The ‘work preparation’;
iii. The Work Focussed Interview only.
Self employed claimants on universal credit in the early years of trading.
Variant bids will not be accepted.
These Contracts will be for the use of the Department for Work and Pensions (DWP), its Executive Agencies and those Non-Departmental Public Bodies (NDPBs) sponsored by DWP. Further information including a list of such Agencies and Public Bodies can be viewed by selecting ‘About DWP’ on the Departmental website at: www.gov.uk/dwp
DWP will be hosting a market engagement event to discuss with potential suppliers the Policy, Commercial and Financial aspects of the requirement prior to finalising the specification and associated bidding documentation.
The rationale for holding the event is centred on the need to create an opportunity for interested organisations to network to potentially enable the formation of consortiums and or supply chains that may be required to deliver NEA Mentoring in the Contract Package Area's.
The event will consist of formal input from officials with opportunity for Q and A as well as informal networking between delegates. The market engagement event will be held on the following date: Friday, 17.6.2016.
If you are interested in attending the Market Engagement event please register your interest on our electronic tendering system (Bravo) using the following link: https://dwp.bravosolution.co.uk/web/login.shtml
A draft Specification will be available to download from the electronic tendering system (Bravo) following registration. Please ensure you review the draft Specification prior to attending the event.