Sad news. Much as I generally support the government, it seems the New Enterprise Allowance is morphing into a way of massaging the headline job-seeker figures. I’m hearing that the government, or at least one of the departments, has backtracked on the New Enterprise Allowance scheme. I was under the impression that the weekly payment would be on top of the dole. It seems it’s not. It’s instead of. That seems likely to make it an especially bad deal for recent graduates in the creative industries.

Here’s the evidence, dated 18 May 2011. It’s from advice to those running the scheme, which is now rolling out nationally and which aims to help the long-term unemployed start their own businesses…

“The customer does not continue to claim JSA [dole] during the first 6 months of trading. An approved business plan will give the customer access to:

* The NEA [New Enterprise Allowance] weekly allowance which is payable for 13 weeks at £65 and then for a further 13 weeks at £33.

* A start-up Loan to help with start up costs up to the value of £1,000 (subject to the loan service provider’s terms and conditions).

Participant’s must close their claim to JSA [Jobseekers Allowance] in order to access this financial support.

So if your business doesn’t take off in just three months, you’d essentially be punitively punished — since what amounts to your dole money would be chopped in half. You’d also be saddled with a £1,000 debt. The NEA thus seems a very unfair choice to foist on young graduates, in incredibly difficult trading conditions.

One could even see it as £1,000 “tax” by the administrative classes, for the privilege of taking a desperate one-shot try-out at trading. Would it not be simpler and more effective to allow anyone to trade up to a certain amount, while still claiming dole? And not have any profit defray their dole money for the first two years? That way, people could try a number of different avenues of income, until finding one that was stable, growing, and which might earn them enough to live on.