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James Moore: A criminal waste, ineffectively tackled

James Moore
Thursday 03 January 2013 21:04 GMT
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Outlook Neet is a neat little acronym for a very nasty problem. It's the term used for young people who are Not in Education, Employment or Training. There are more than 1 million of them, and that's a criminal waste.

The last government's strategy for dealing with the problem was to unveil a string of well-meaning but basically rather ineffectual initiatives, sometimes two or three times.

The present government, it seems, is little different. Today it unveiled an expansion of its "Start-up Loans" scheme, which is supposed to help young entrepreneurs to set up businesses.

The scheme will be extended from 18 to 24-year-olds to cover anyone up to 30, although the older group is likely to run into the same issues as its younger colleagues – those who have tried to get their hands on the funds have found the process to be painfully slow.

It says it all that a programme set up with £82m at the end of May has doled out just £1.5m to date.

With an eye on achieving some cheap PR hits, James Caan, of Dragons' Den fame, was made chairman of the Start-up Loans company. One wonders how he would have viewed that sort of performance from one of his businesses.

That said, while cheap funding is always welcome – any funding at the moment is welcome – a loan of £2,500 isn't going to get you very far. If you really want to help young entrepreneurs you need the banks to get involved. And they don't want to play. A sting in the tail of the aforementioned Bank of England Credit Conditions report is that spreads on loans to small businesses aren't coming in, despite the cheap funding the Bank is making available. Those small businesses that are able to access credit still can't get it on economic terms.

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