New Enterprise Allowance: Not Working for Women

New Enterprise Allowance (NEA) is the Government scheme to help unemployed people start their own business. It aims to provide mentoring and financial support to smooth the transition from welfare to self-employment. Potentially it’s a great help for the record number of women currently losing jobs and starting businesses. In fact, just 17% of those benefiting from NEA are female.  [Update June 2013, since this article was first published in June 2012, the percentage of female participants has increased to 30% – but with more women than men becoming self-employed since 2008, that is still very low.] Last week in Parliament, Catherine McKinnell MP asked Equalities Minister Jo Swinson: “What are the Government going to do to ensure that that help [NEA] reaches women to help more female entrepreneurs come into the market?” As you can read here, Swinson did not directly answer the point.




So why are women missing out on this scheme? To benefit from NEA you need to overcome the many obstacles to accessing this scheme. Those obstacles are unfortunately stacked against women, despite the fact that women are five times as likely to start businesses from unemployment than men are.

The fundamental barrier is the pace of start-up required

You’ll need to have your business in a position to replace all your benefits in three to six months. Most women start up part-time and take longer to get established, so this rules many out before they can even start.

The next problem is finding clear information about the scheme 

The official information advises: “If you’re interested in taking part in New Enterprise Allowance, talk to your Jobcentre Plus adviser. They will be able to tell you more about the New Enterprise Allowance and discuss with you whether New Enterprise Allowance could be right for you.” In fact, my own experience in mentoring a young woman to start a business is that the local JobCentre Plus has no idea at all about NEA and no interest in finding out. Anecdotally this seems to be the norm.




Official information available on-line is similarly sparse and sketchy. In fact, the best information we could find is an independent guide, put together by people who’ve been on the scheme. Below is their practical outline of how the scheme works.

How the New Enterprise Allowance works

•  The “Initial Stage” consists of a mentor being assigned to you who will help you with your Business Plan. During such time you will remain on Jobseekers Allowance (JSA).

•  The “Trading Stage” follows when and if the mentor approves your Business Plan. Likewise, if you are applying for a loan the mentor has to approve it (the Business Plan).

•  To Progress further (to actually get the New Enterprise Allowance) you have to terminate your Jobseekers Allowance claim. You will then be paid an allowance of £65 per week for the first 13 weeks, £33 per week for the following 13 weeks, and £0 thereafter.

Make sure you are claiming the right benefit

NEA is only available to people who have claimed JSA for 6 months [UPDATE: In October 2012 the Government announced that JSA claimants would have access to NEA from the first day of their claim, instead of having to wait for 6 months.] Women are much more likely to be claiming out of work benefits other than JSA. In some cases women are being advised to claim alternative benefits by officials, thus disqualifying them from NEA, as London-based Colette Rouhier’s experience illustrates:

My husband and I were both made redundant in 2010. He was made redundant 6 months before me. We went onto Job Seekers Allowance with the full intention of finding employment. To our misery, we discovered that our skills were so dated we were not very employable. Our age was also against us, 50+ in the media industry is perceived as too old. So I decided I would need to start out on my own.

Well into my 6 months unemployment, I got a call from the DSS saying that they would be running one claim for both myself and my husband. I didn’t think this would affect anything and it was put to me that the convenience of no longer attending the bi-weekly interviews would be a bonus and give me more time to focus on my start-up. I was preparing my website and print media for the launch of my business with the expectation that I would enjoy the support of the New Enterprise Allowance.

As September got underway, holidays over with and the child back at school I turned my attention to my start-up. It was then to my surprise that I discovered I was no longer eligible for the Enterprise Allowance scheme because I had not been claiming for 6 months. They explained that the records show that I was on my husband’s claim and so not directly claiming JSA, so not eligible. And that was that. I remember that day well. I left feeling utterly depressed. It was a real “the computer says no” moment.

As winter drew in, I eventually pulled myself together and as friends and family rallied I began to pick up bits of work and felt it was time to move on. So this April, I became Self Employed. I am still trying to get myself up and running and more’s the point, I am trying to find the confidence to charge people for my work. I have never benefited from the New Enterprise Allowance scheme and probably never will. I have had no support and everything I have today is due to my own efforts and the support of my family and friends.

Thanks to Colette for sharing her story.

[update: December 2014 – Chancellor announced that New Enterprise Allowance is being expanded to include dependent partners in a couple’s JSA or ESA claim].




New Enterprise Allowance – better than nothing

For many women, like Colette, NEA is better than nothing. But it is nowhere near as good as it should or could be. I should know. I started my first business as a young lone parent in 1989 with support from the original Enterprise Allowance Scheme. I didn’t need to claim JSA or its equivalent. The scheme provided support for a more realistic one year period. And you received a £40 weekly allowance, paid in addition to other benefits, a full refund of all travel expenses, plus full childcare costs. Not surprisingly the percentage of women benefiting from that scheme was 39%, compared to the NEA’s 17%. And those were the days when women were a much smaller percentage of the self-employed, unlike this recession where so far more women have become self-employed than men.

The original Enterprise Allowance was truly transformational, unleashing a new generation of enterprising people. In the midst of this even deeper recession, it’s the kind of inspired support that we now need more than ever.

What next?

For New Enterprise Allowance official information see the DWP website.

Lobby for change. If you are having problems accessing or benefiting from the New Enterprise Allowance, write to your MP. Share your experience and point out that the New Enterprise Allowance is not fit for purpose, especially for women. Ask them what they are doing to ensure that there is effective support to enable unemployed women to get off benefits by starting a business. You can find details of your MP at Theyworkforyou.com

[UPDATE:  Lobbying works! In October 2012, the 6 month JSA qualification period was dropped. It’s a start.  In June 2013 questions were asked in the House of Commons about the low numbers of women accessing the scheme.

In December 2014 The Chancellor announced in the Autumn Statement that New Enterprise Allowance is being expanded to include dependent partners in a couple’s JSA or ESA claim. This addresses an anomaly that has seen many women, including Collete, excluded from the NEA scheme. ]

 

33 thoughts on “New Enterprise Allowance: Not Working for Women”

  1. This isn’t my experience of NEA at all, although I would suggest that part of this is because I did my own research and so knew what I was entitled to.  I received very little advice from the provider (it isn’t delivered by JSP directly which is why the staff won’t know much about it) but this was because I had already written a business plan which was accepted immediately.
    I would imagine for those people who have never written a business plan or managed budgets this would be a great scheme.  I’d be concerned that by reducing the time frame for eligibility to 3 months, some people would ‘hang around’ waiting to apply for it.  I do think that the scheme should have greater integration with the excellent HMRC workshops rather then trying to do their own as well, this is just a duplication of service when the money could be used elsewhere!

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  2. Hi Sarra
    Thanks for your comments and glad to hear you’ve been able to make the best of the scheme.  Agree re the HMRC workshops – they are great!  Just to clarify – JCP don’t deliver this service anywhere, but in most areas you must be referred to the service by JCP.  This has been a problem for a few people in areas where JCP were clueless about the New Enterprise Allowance and determined to refer to other schemes instead!  

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  3. So how do you actually apply for NEA?

    My seasonal contract terminated 30/9/12 and I had already made plans to start up my own business for next season while my contract was drawing to an end. I applied for JSA and I received a text with an interview date and time for the 4th of October. When I went for my JSA interview the time of my appointment had been messed up so it had to be rescheduled for the 9th October. While I was there I asked what help and support would be available to me to start up on my own and I was given a phone number to contact Business Link. When I called them they told me all the information I needed was available on line. I checked it out but the website only had basic business start up information and nowhere to apply or register your details. In between time I have been applying for jobs and trying to obtain future business so that I can start up on my own.

    When I went to sign on for the first time on the 17th of October and made it quite clear that I was preparing and actually had some confirmed leads for my business as well as job seeking. I asked about support again and I was told to contact Business Link. I said I already had checked it out and the website has nothing but information. When I checked again the website had disappeared completely and had been replaced by gov.uk and again this is just information, there’s no details how to apply for NEA.

    I went for my next appointment on the 31st October the member of staff I saw told me that preparing for my own business could be looked upon as actually working and my JSA could be stopped despite the fact I was job seeking too and I had supportive evidence! I ended up in tears. She called her manager who recommended that I should be booked in to see the same advisor who I had seen on the 9th of October with the view to me being transferred to NEA. When I asked why she hadn’t done this in the first place I was told it’s new but I should qualify. I actually thought “Good at last I’m getting somewhere!”

    I went for my appointment on the 6th of November with the advisor and I told her that I wanted to apply for NEA. I was told again to contact Business Link to find out about NEA. She wouldn’t listen when I tried to tell her there’s no where to apply for it. There was no mention of support whatsoever. What a complete and utter waste of time!

    If anyone can point me in the right direction I’d appreciate it.

    Thanks

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  4. Hi Margaret

    thanks for sharing your experience. It sounds like you’ve been treated really badly and still don’t have the information you need. It’s not good enough – do think about sending your story to your MP and ask them to apply pressure to DWP and JC+ to sort out those problems. So many people are starting businesses and this is the only support available in most places – if you can manage to get anywhere near the scheme that is!

    Try and find out who the local delivery agent is for NEA in your area and contact them directly. You will still need to be referred by JC+ but clearly they have no clue where to refer you, so if you give them the exact details that may help….

    Here is a list of delivery agents for local areas across the UK http://www.dwp.gov.uk/adviser/updates/new-enterprise-allowance/ I hope it is still up to date, but don’t know for sure – it is so difficult to get any clear information about the NEA. And now the independent NEA site, set up by users, which was really helpful, has had to close…

    All the very best with your business. With your determination I am sure it will be a great success!

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    • Thank you very much for your reply and advice I really appreciate it. Since I posted I’ve got no further trying to obtain NEA. I have found out who my MP is though and I’m going to contact them about this. Thanks for the link I’ll check it out. I’ll keep you posted on any future developments. Best Wishes, Margaret

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  5. I got the NEA is a totally liar for woman or ma. I Apply in Northampton the NEA take 4 weeks to become active. After that I wait the payments and I got 0 pounds I complaint in the Job Centre and after hours of phone calls . The adviser call me because they not have idea how to process the paper work and every think is stop in the payment processing system. Fine the manager take actions and all look is solve they pay 3 weeks consecutive after that again problems. With a short cash for start the business that make also the business frozen in time I get more funds . I call again many hours and hours of phone and they start again make the payments and pay a stupid compensation of £50 . After 13 weeks the payments stop for other 4 weeks they forgot to call me for I provide any paper work of the business. my feedback the program is horrible no information no help and people working with not interest. Never more in my life the time I waste can’t be pay.

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  6. Am I the only one that thinks this scheme is useless?

    I was on the original and as the author says you got £40 a week for a year which wasn’t fantastic but it gave you a degree of stability. This was compared to around £25 ish a week dole money at that time.

    To be expected to launch a business and get it profitable in 3 months is absurd. That £65 being less than JSA you’ll have increased expenses starting up and having to live on it too. Multi-million pound businesses are collapsing all around yet these fools think amateurs with mere peanuts to fund it are going to succeed. It just demonstrates how out of touch nwith reality these clowns ruling our lives are. This is a money wasting scheme as it is too meagre to give a fighting chance of success. I bet nearly all will end up back on benefits unless they can be lucky enough to find a job.

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  7. I enrolled the New Enterprise Allowance in April this year, I was asigned a mentor and with his help I defined my Business Plan, which we submited to the local Chamber of Commerce in July,

    It was approved on the day. The day after the Job Centre contacted me to make an appointment; next day at the Job Centre office I was told that I was off the Job Seekers Allowance from that day onwards.

    I explained to the lady at the Job Center that the start date on my Business Plan was the 1st of September, due to that I hadn’t purchased yet the equipment to start my business, and even contacting customers and plan visits would be difficult with the school summer holidays just starting.

    I was told I had no choice, that I was off the JSA, and it would be followed by the NEA payments.

    In my mind that has no sense, since I thought the NEA payments was meant to offer an income for when you start your business (since there isn’t much income in the first few months of trading).

    So, here I am, with no equipment, no JSA and the local Council letting me know they have stopped my Housing Benefits,…

    I don’t want to sound ungrateful and I appreciate all the help I have received until now,

    I just want to say that the NEA, as it is, it doesn’t actually help you starting your self-employment, it’s more like a push to the pool. In my experience, it would be better if the Job Centre could wait to tick you off their list until you are ready to trade!

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    • yes, you are right…I am starting my self employed and its not doing well…to be honest better to be in JSA again and look for the job. I am struggling because my business plan went wrong and not working. I just feel that they are just pushing you fast to get away in JSA even you are not ready. And my mentor just do not care about it now if I ask for advise

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  8. I am confused, I went through the process to set up my own business last year. I was told just before Christmas that I had to start my proposed business or go on Work Programme as I had run out of waiting time after my plan was passed by Local Chamber. I was not in a position to commit financial suicide just at the year end as my business was connected with the wedding industry and to some degree seasonal at times it was not the right time to start. The loan was in place ready and I was nearly ready to start in new year BUT computer said NO had to go on Work Programme which was as much use as a chocolate teapot. I have had to go on income based ESA due to stress caused mainly by not having a job. I have been on sick for 4 weeks and given a new note yesterday. I have all my plans ready to go now with my revised business. Can I go back onto JSA and then onto Enterprise Scheme straight away or do I need to wait another 3 months or so (which will be too late again)? Can anyone advise?? I am 55yrs single (kids all grown up and moved out), I have a mortgage (with housing costs paid) on council tax credit, I have now been without work for over 2 years and getting desperate to work for myself as I have fybromyalgia and arthritis and out of date qualifications for IT lecturer which is was my profession 5 years ago. Anyone know were I can find the answers. I can’t manage without some help towards mortgage and the £65 a week is better than nothing at first.

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  9. Ha, ha, ha, totally has the ring of truth. I found out about NEA through it being promoted on the news and let my mother (on JSA) know in April of this year so she could get support for her e-publishing business. The JCP was clueless and also told her to look up info on BusinessLink. She was persistent and someone eventually found out what it was and contacted the external person (who posted something she didn’t receive). She has finally arranged her appointment for Sept 2, five months after she initially enquired!

    In that time she has commissioned a website, commissioned a book cover, set up a facebook page, a twitter page, a Google+ page, made business cards, planned the next two (three?) publications after the debut as well as written another book! Hopefully, all that work while waiting will ensure she gets this support.

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  10. Ladies it not only you this is affecting, most jobs centre not put this forward as an option let alone know anything about it.
    Oh and yes it now stopped altogether.. thats is goverment helping us to stand on our own two feet..

    this scheme didn’t matter what you were it just never gave assistance…..

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  11. The NEA is a good scheme in theory if only it was actually available to the people for whom it was designed., I have an unemployed friend wanting to start her own business. Tne NEA with its modest financial support while the business gets up and running is exactly what she needs and ALL she needs to get going. SHe has an excellent business plan ( I run my own business and I know how good her plan is.) . My friend worked for many years, had an accident which made her unfit for work for over a year. She claimed ESA after her statutory sick pay ran out.Then – while still unfit for work and unfit to think about a business start -she was automatically put on the Work programme. That’s what they do to people who are unfit for work and claiming ESA in the ‘work’ category. When she became fit again , 6 months later and looked to to start her own business as a way to get off benefits she was told she is automatically BARRED from NEA because she is on the (so-called) Work programme. This is disability discrimination of course as this is what will happen to any disabled or sick person – they willl find they have been automatically disbarred from the NEA by being put on the Work programme while they are unfit, only to find when they are fit to start thinking about self-employment that they are automatically denied the NEA help. She was told the ‘Work programme’ helps business starts.. It doesn’t. SHe has been put off at every turn, noone even wants to see her business plan and there is no financial start up support like the NEA only ‘advice’ that she does not need – she already has lined up experienced business mentors ( including me.) She needs the start-up financial support the NEA could give. The NEA may be modest and time-limited but that’s all she needs to get going. But without it she will struggle while her business gets going, she needs to eat. As a tax payer I am absolutely horrified at the appalling waste of public money going into a ‘work programme’ that doesn’t even do what it is supposed to ( motivate, personalised support etc). My friend is demotivated and demoralised by every contact with them and we are trying to build her up again every time . The job centre is worse than useless, they have been patronising and keep telling her how the work programme will help her’ find a job.’ and ignore her when shes says she wants to start a business. The job centre doesn’t ‘do’ business start-up in their very thinking ; it seems beyond their imagination. If the NEA didn’t even exist it wouldn’t be so bad but it is unfair to keep waving it in front of people who would grasp it with both hands only to say ‘but our own discriminatory rules mean you can’t have it., and we are so bureaucratic we won’t ever review whether we might have made a mistake or not by disbarring you.( and we are not even interested in whether you have a viable business plan. The computer says no. ) So to all those compaining about the NEA – at least you were allowed to access it !!

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  12. Hi Ursula we used Twitter to raise your comments with Levi Roots who’s the Government’s NEA ambassador. Nice response.

    Prowess 2.0 ‏@WomensBiz
    #NewEnterpriseAllowance failing people with disabilities (see latest comment) http://www.prowess.org.uk/new-enterprise-allowance.htm … Maybe @Levirootsmusic could help?

    Levi Roots ‏@levirootsmusic
    @WomensBiz i have tackled the PM to give more money to the NEA scheme he has agreed to put in an extra £69m, im on his case about your point

    Prowess 2.0 ‏@WomensBiz
    @levirootsmusic good to hear Levi, thanks for replying :)

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  13. ive been on my own for 4 weeks they didnt pay me for the first 3 as someone didnt press the right button and although a sorry was mentioned it really set me back a huge deal
    i thought i would be getting business advice to be honest you know how to deal with marketing budgets and the legal stuff with how to deal with the tax office but no
    i saw my advisor twice before my time was up and i had to go live ive not got any tips for the bad days not even a message to say how you doing so mentoring seems such a strong word because it normally means caring helping giving information but ive not had that and after 4 weeks i think i might be better off going back on the dole cause iam not making money and not getting help
    iam slapping my hand to my forehead thinking what the hell have i done oh yeah i remember i thought i had someone who cared but sadly its failed me if i could advise anyone else i would prob say dont do it

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  14. Hi,..am I right in thinking that on the NEA scheme I am able to claim ESA and the NEA ..as I was told by one of the wenta staff that I can claim both for the initial 13 wks and half after that..I have currently been on ESA for 4yrs and wold like to think this is the case
    Regards
    Brian

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  15. Hi Brian, see here for the latest eligibility rules. https://www.gov.uk/new-enterprise-allowance The main points are:

    You must be aged 18 or over, have a business idea and get one of the following benefits:

    Jobseeker’s Allowance
    Income Support as a lone parent
    Employment and Support Allowance, if you’re in the work-related activity group
    A Jobcentre Plus adviser can refer you to the scheme as soon as you get a qualifying benefit.

    You don’t qualify if you’re part of the Work Programme, but you can still get help setting up a business elsewhere.

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  16. Hi..thanks for reply, but I’m on the scheme now I just need to find out if they still pay my esa allowance and also the NEA allowance both together..only asking as my NEA guy asked me to find out as he thought I was entitled to both..
    Regards
    Brian

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  17. I must say some of the stories have made me think is it worthwhile! I started my claim for JSA in Oct 2014. My husband works and so I am not entitled to any benefit other than child benefit for our 3 year old.

    My JC advised me about the NEA and so I thought great I’ll give this a go. It’s now 2015 and I’ve just been told my claim had been suspended because I do not actually receive benefits and only obtain credit

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  18. Just to let you know; I am not a woman, but thought this important to share with like minded Folk.
    X RAF on DLA and ESA; on the support group and not expected to look for employment.
    I heard about the NEA and contacted my local jcp in Sep 2014.
    Their said I was not eligible and to stay at home. I said “so I must stay at home and vegetate until I die”. The jcp employee agreed.
    I then drafted an e-mail to Iain Duncan Smith and also Esther M’cVey; quoting this and also charging them, of illegal action under the Disability Discrimination Act.
    On the 12 Dec 2014. I received a letter, informing me that; as of the 5th of Jan 2015.
    All disabled folk on the support group; are now eligible for the NEA programme.
    I have my first meeting with JCP on Mon and with great trepidation. I am wondering, will their negative intervention, interfere with my positive attitude in developing a business. Hope this helps others in the support group who have been told they are not eligble. PS all the info on their website has not been updated, so folks are still being barred from “rising above the rest”. Cheers Joe D

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    • Thanks for sharing Joe and all the best with the programme. With your determination and ability to make change happen it’s clear that you’re already highly entrepreneurial ;)

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  19. Hi,

    I am in the process of signing off JSA and on to NEA, my business is set up and ready to go. Way back at the start of my claim my JC adviser told me I could still choose to work (as in have employment) while claiming NEA, as long as I was putting at least 16 hours per week into my own business, but then my JC adviser left (stopped working there) and my new adviser knows absolutely nothing about the scheme and doesn’t seem to have a clue what she’s telling me?!?

    I only ask as I’ve been offered part time employment, working early mornings for just a couple of hours a day – it wont interfere at all with my own business and although it wont pay much as the hours are so low the extra money could really help, especially in the first 6 months while I’m trying to make my business profitable.

    Is this correct? Can I take part time employment as well as getting NEA?

    Any help would be greatly appreciated.

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  20. Well, what can I say!? Signed over from JSA to NEA today and within an hour I hit a problem. I was told that it would not affect Housing Benefit, however, when I went into the local council housing benefit office I was told that is not the case. I was told (rather smugly) that I need to fill in a new claim form and that my housing benefit might be suspended. I suffer from mental health issues and made the choice to try move forward but after feeling positive I now feel suicidal and without hope, again. If my housing benefit is suspended as was threatened, then I will become in arrears. So much for trying to move forward!

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  21. The NEA scheme does not work for women especially single parents-men/women. I am on the scheme and i am finding it difficult to get funding for child care. Childcare that i have needed to attend IXION meetings or training sessions. I began the programme in September and i am still waiting for money i used for my living costs to pay child care. I was informed that i only receive help for child care when i have a job. My response was how am i supposed to attend job interviews or training sessions if i have no child care. Now everything is being managed by universal credit in my postcode its all gone terribly wrong. Nobody really knows anything or how it’s all supposed to work.

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  22. hi how does the new enterprise allowance affect income support allowance please? As my local jobcenter says IS will immediately stop oce receiving the £63 a week but I’ve also been told it doesn’t affect your income support until you start earning a certain amount?

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  23. Hi,

    I was on the NEA until a few months ago. I agreed with comments that the timescale is unrealistic, especially if you are starting from scratch. Although the benefit received is small I think that we should just be grateful that there is anything in these times of cut-backs!

    I am just preparing a letter of complaint to the people that provide the Enterprise support in my area (copying in the job centre, local MP and DWP) as I found them unprofessional, disorganised and unsupportive. The scheme could be useful but only if conducted properly.

    Reply

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