Hundreds of people have set up their own businesses and stopped claiming out-of-work handouts thanks to an enterprise benefit.

Some 650 businesses have been created across Sussex after receiving the New Enterprise Allowance (NEA), launched in 2011, Government figures show.

This includes 210 new start-ups in Brighton and Hove supported by the benefit set since 2011 according to Department for Work and Pensions statistics.

The benefit was launched to get the jobseekers allowance claimants into self-employment by helping them set up their own business.

It also offers mentoring and loans for new businesses with 1,480 taking up the offer in Sussex.

A start-up director welcomed the figures, saying now was the perfect time for start-ups to “spread their wings”.

Matt Turner, of design and marketing agency Creative Pod, former young entrepreneur of the year and founder of Young Start-up Talent, said: “The NEA has got the potential to be a phenomenal success.

“What would be interesting would be to monitor the 650 companies and see where they are in six months and 12 months’ time.

“If they’ve been a success then the Government has got some really powerful evidence behind it.”

He added: “For young entrepreneurs the world is their oyster at the moment. If there’s ever a time to spread their wings it’s now. The economy in the Gatwick diamond in particular is booming.”

One company supported by NEA is Brighton-based online videogames and electronics retailer GAMECORE.

The firm has migrated from a bedroom to a shared office space in the North Laine area.

Founder Stephen Varley, 27, said: “That initial injection of capital to get the business off the ground would not have been possible without the allowance scheme and loan.

“It’s the funds and the help of business mentors that makes the difference between success and failure for a start-up business like mine.”

Another Brighton and Hove business set up with the support of NEA is the Home Cover Company.

It offers a house-sitting service so customers can avoid taking holiday or unpaid leave to wait for home deliveries or workmen and is approaching its first year of trading.

Founder Ian Molyneaux said: “The allowance gives you a bit of money so you know you’ve got something coming in.

“It’s really difficult when you’re first setting up, so any financial support to fall back on is really welcome.”