By Max Clarke

The Government is to strengthen its plans to push the growth of small business with a big expansion in the scope of its planned New Enterprise Allowance (NEA) helping to create up to 40,000 new businesses by 2013.

The Allowance, which will help unemployed people set up their own businesses, will be launched later this month in Merseyside and will now be rolled out nationwide from Autumn.

The NEA will be available to twice as many people as was originally planned. It will give people who have been unemployed financial support for their early months of self-employment, access to a start-up loan, and an expert business mentor to help guide them through the early months of their business.

In order to claim the allowance they will need to develop a business plan, and secure the agreement of their proposed mentor that it is viable.

The Government has today also announced significant changes to the way information, guidance and advice to business is provided with more focus on improving small business performance and growth and a greater emphasis on further and better private sector provision.

Businesses will benefit from:

• An overhaul of providing online business information and tools tailored to the needs of business. This will include a number of key features:
o A Business Startup Hub, including access to online company registration
o Notification of public procurement opportunities through a “Contracts Finder”
o A business tax ‘dashboard’ enabling businesses to get set up for tax and keep up with their tax position
o Better, clearer information on Government regulation
o New training services and online tools for business to use on the move from their own computer or handheld
• A national contact centre to help businesses who cannot find the information they need on the web or who are not connected to the internet
• A network of at least 40,000 experienced business mentors offering practical advice to existing businesses and people who want to start a business
• Business Coaching for Growth, backing high growth SMEs to enable them to realise their potential

Prime Minister David Cameron said:

“Throughout this year and beyond we will be focused relentlessly on supporting growth and driving job creation across our economy. Backing new enterprises to start up and small businesses to grow will be what transforms our economy and will deliver the many thousands of new jobs we will see created this year.

“It is vital that we ensure businesses, and those people who find themselves out of work but have the drive and desire to set up their own business, have all the advice, support and mentoring they need. Together we can make the years ahead some of the most dynamic and entrepreneurial in our history.”

Business and Enterprise Minister Mark Prisk 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 for helping businesses to improve focuses on providing access to business mentors.”

The Government is committed to creating the right long term environment to help many more people start and grow their business. That’s why we have already introduced a package of reform to reduce rates of corporation tax, including cutting the small profits rate from 21 per cent to 20 per cent from 1 April 2011.

We have also introduced a regional National Insurance holiday worth up to £50,000 for new businesses and extended Entrepreneurs’ Relief from Capital Gains Tax from the first £2 million to the first £5 million of gains made over a lifetime.

These measures, and the new business improvement delivery package announced today, are part of a broader programme to free enterprise and help small firms grow and prosper.