Posted: Friday 20 April 2012
By John Lunn
A new government scheme designed to provide funding to young entrepreneurs, and trailed by George Osborne in his latest Budget, is to be piloted from May 2012. The neat twist is that the “Youth Investment Fund” is to be based on the student loan system, and will give 18 to 24 year olds access to low interest “enterprise loans” to start up in business.
Business and enterprise minister Mark Prisk said in Parliament on Wednesday that:
"In a sense [the scheme] mirrors what is available in the market for other entrepreneurs, but it is an exciting concept because it will provide the means to take a nice idea that needs to be tested in the market through to a business plan, and then on to becoming a real business"
While the initial fund for the pilot is worth £10M, further funds may be made available once the pilot scheme has been evaluated. At this stage the Department for Business, Innovation and Skills have not released any more details about the pilot scheme, but these should be made public in the near future.
The concept has been developed by the Government in partnership with organisations such as the National Youth Enterprise Working Group which was formed last year to try to co-ordinate support for young entrepreneurs. Members of the working group include the Institute of Directors, The Prince’s Trust, and Virgin Media Pioneers. With those sorts of backers, the pilot scheme stands a good chance of success.
Niall Grant, CEO of Recruitwork and a winner of Young Scot of the Year (Enterprise Category) in 2010, comments:
"As a young entrepreneur I was excited to hear about the Youth Investment Fund. It is a welcome step in the right direction and might give young people - who are the future wealth creators in the economy - a much needed hand up. "
"Following a barrage of cuts in education and other young person benefits, coupled with rises in FE fees in England and Wales, I hope other young people will now seriously consider starting up a business as a genuine option coming out of school or college/university, and I am in no doubt that the YIF will be a success - if the funds can reach the people who need it most."