By Max Clarke

Entrepreneur and TV Dragon James Caan welcomed today the Government’s decision to make New Enterprise Allowance (NEA) available to twice as many individuals as was previously planned.

“The decision is great news for budding entrepreneurs and an increase in start-up businesses will be good for jobs,” said Mr Caan.

Government plans to extend the New Enterprise Allowance to create 40,000 new businesses by 2013. The scheme will be launched on Merseyside this month and is expected to be introduced nationally by the autumn.

The NEA will make £2,000 available to people who have been unemployed for six months or longer if they want to set up their own business.

They will receive their usual benefits for the first three months and a reduced amount for the next three months so that they can support themselves while they launch their businesses. There is also access to start-up loans of £1,000 to help with expenses.

“I am particularly pleased that individuals participating in the scheme will have access to experienced business mentors through the new ‘Business Link’ website,” said Mr Caan, who created the Entrepreneurs’ Business Academy (EBA) last year.

The Scheme has, however, not been universally praised, with UK200 Group representatives labelling it “hare-brained”, deeming the £1,000 loan insufficient for starting a business, and the selecting criteria ill defined.

Mark Prisk, Business and Enterprise Minister said: “In the current economic climate, it has never been more important to promote an enterprise culture in the UK. It is vital that businesses have the information, advice, and mentoring they need to grow and expand. The best people to advise small businesses are those who have already started and run successful companies, so it is particularly important that this new framework focuses on providing access to business mentors.“

Mr Caan said: “Start-up businesses can be dynamic, flexible concerns that can create jobs quickly which will be obviously beneficial as the public sector begins to shed jobs. In some ways it is a shame that this scheme is only available to people who have been unemployed for six months. There are many school and college leavers who would have benefited.”

James Caan’s new book ‘Get the Job You Really Want’ is published by Penguin this week and mentors jobseeker in seeking the best employers, getting a foot in the door, how to thrive in the interview and how close the deal on a job offer.