Prince's Trust failing to make impact, says study

History of the charity

The Prince's Trust "business start-up programme" - which has received more than £27m in aid from the taxpayer - is missing its target audience, it shows.

The research points out that many of the businesses only survive because those running them pay themselves salaries lower than the minimum wage.

The Prince set up the Prince's Trust in 1976 and it has developed into one of the UK's leading - and best-funded - youth charities, with celebrity support and fund-raising events, including rock concerts.

In 1983, a special scheme to help the young unemployed was launched as a spin-off from the main trust. It aims to help 16- to 30-year-olds who are disadvantaged in some way (unemployed, disabled or from ethnic minority groups) to set up their own businesses.

Dr Francis Greene, an economist at the University of Warwick, who has examined all the evaluation data on the programme's performance, concludes "it is difficult to discern any real impact of the programme on the outcomes of participants".

His research shows that participants in the programme have a similar ethnic and disability mix to the rest of the UK population.

"There are also large numbers of individuals (between 13 and 38 per cent, according to various studies) who do not come from an unemployed background," it adds. "This cannot be explained by individuals being from one of the other target groups (eg disabled or ex-offender) and may, given the objective of supporting unemployed people, be against the stated aims of the trust."

It adds that many of the participants received loans and aid from banks and other support programmes - whereas the Prince's programme sets itself out to be a lender of last resort.

"In summary, therefore, in very few dimensions does the Trust map closely with its specified target group," it concludes.

It also draws heavily from research by the Institute for Employment Studies for the Department for Work and Pensions. This also concluded that it was not hitting its target groups - although it did find that the Trust was successful in encouraging new businesses.

It found that 37 per cent of those on the programme were in work and over a third educated to at least degree level.

Of those who had been helped to set up a business, a quarter were working 51 hours a week or more and 10 per cent more than 61 hours. Some were taking home less than £1 per hour. After 18 months in business, just 3 per cent were earning £500 or more per week.

Dr Greene's research did find that most of the studies reported that those who participated in the programme were "happy" with the help the Trust had given them - particularly in respect to mentors who could help them to plan their businesses. However, he warned that some of the evaluations were little more than "happy sheets".

The Prince's Trust said that the research on which Dr Greene's paper was based had been done before 2002, and admitted to concern over the number of hours worked by supported businesses.

It said that in the past 12 months it had taken action to target its programmes more effectively.

* The Prince of Wales, below, set up the Prince's Trust in 1976 to provide grants to improve the leisure activities available to young people.

After urban riots in the early 1980s, it expanded its remit to set up a Youth Business Trust to provide grants and loans to young entrepreneurs. Between 1983 and 1999, it gave a total of £25m in grants and £56m in loans.

Since 1998, the Government has agreed to provide matched funding for the programme - which has involved a donation of more than £27.5m in the six years up to 2005.

Rock concerts and celebrity donations have swelled the Prince's Trust's coffers. Its first rock party in 1983 featured Madness, Kate Bush and Phil Collins. Last year it staged Fashion Rocks at the Royal Albert Hall, which featured a catwalk parade and pop music party. Among the celebrities taking part were Robbie Williams, Beyoncé and Blue.

Richard Garner