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Social Enterprise and Micro-Enterprise


This short post comes from two simple ideas, and an idea about bringing them together. Micro-enterprises are small local enterprises that provide a range of social and health care, supported housing and leisure services. They are frequently run by and for people who use health and social care services. Social enterprises are defined as trading organisations working for a social purpose. Often they can be the same thing, but they are often not.




Micro-enterprises started with personal budgets, which made it possible for people to purchase their own individually tailored care and support instead of relying on what the Local Authority had purchased centrally. In theory this gave people a lot more choice and control, but in practice there often weren't the individual services for people to purchase.


News Images: pb_report_screenshot.jpg

Our Report, Published in March 2014


Earlier this year, we were funded by Healthwatch Oxfordshire to look at personal budgets in Oxfordshire, and this is something we also found. We're not alone. At a national level, this weakness in the personalisation policy has been recognised for many years. From April 2015, the Care Act 2014 will require Local Authorities to develop and manage the market for care services in their areas, and many Councils are nervously scratching their heads and wondering what to do.


Luckily, help is at hand. From the beginning, many far-sighted individuals recognised that personal budgets might provide a way of funding 'micro-services'. The title sounds whizzy and new, but the idea is as old as the hills. How many child-minders that start out by watching their neighbours' kids? How many dog walkers begin their businesses as a favour to friends? It's the same for people who provide small-scale support, like a lunch club for older adults or day trips for young adults with learning disabilities. Often people had the skills, but needed the support to turn it into a business, making a livelihood for themselves at the same time as providing vital support for people in their communities.


Several years ago a small agency called Community Catalysts was set up to help people who wanted to grow their ideas into small businesses. Since then they're run many successful projects, mainly by providing essential help to people get going, and then ongoing support over the first few years. Since they started in Nottingham in 2010, several other areas have started to employ micro-enterprise support co-ordinators.


Social Enterprises


The idea of social enterprises is simple - real businesses run to generate a surplus than is then used to achieve a purpose that benefits communities. If it works, it stengthens communities rather than enriching shareholders. People argue about definitions of social enterprise, but by most of them, we are one. In fact we were one of the first in Oxfordshire, which as just had the honour of being designated a 'social enterprise place' by SEUK because of the extent of the activity here.


Oxfordshire becomes an 'SE Place'


In fact, this is only one of a number of exciting opportunities in our area, which also includes significant investment in local social enterprise through our Local enterprise Partnership, including:


Size and nature of the market


In Oxfordshire between April 2013 and March 2014, 6,875 people received care in the form of a 'personal budget'. Of this group, 3,990 received it as a direct payment. This means they received the actual money themselves to spend on their own care and support. The rest receive it through intermediaries such as Advance Housing and Support, who provide a 'managed account' service.


News Images: oxon_dps.pngProportion of Direct Payment users in Oxfordshire
from difference 'Care Groups'. Data Source Here


In 2012-13 the total cost of publicly funded adult social care in England was £17.2 billion, which has been going down slightly since the financial crisis started to bite. Around 1/3 of adult social care is provided privately, making the total expenditure around £25 billion. The percentage of people receiving this as a Direct Payment is growing - from 4% in 2008-9 to 7% last year. In Oxfordshire the average person receiving Direct Payments spent £217 a week in 2012-13, meaning that the County Council is spending roughly £1.6M a year in this way.


What Do People Buy?


Nearly everyone uses a Direct Payment to pay for support from a 'personal assistant'. This is a broad term that covers basic care such as help getting out of bed, washing and dressing to more sophisticated help for people with specialist conditions. Often it's the basic care people feel most passionate about - imagine being washed and dressed by a stranger, and then imagine the stranger was being paid the minimum wage and only being given 15 minutes to complete the task. This is part of the reason disabled people campaigned for the right to have Direct Payments - so they could have control over the support they receive. A large part of the benefits people get from personal assistants depends on the person. For some people, their PA may be the only person they see that day, so a friendly face and a bit of chat may be as important as the practical support that's provided.


Nevertheless the vast majority of care is purchased from agencies who act as the employer. Some are good, some are bad, but few could claim to be personal. Mostly they are simply trying to make a small profit from the very low sums Councils are able to pay following the economic crisis. This information is now 'commercially sensitive', but anecdotally we know many LAs have reduced the amount they'll pay from around £20 an hour 5 years ago to £10-15 an hour today, depending on how 'specialist' the support is.


So how could things be improved?


a. Employing personal assistants


The most effective way for people to control the support they receive is for them to employ people directly, which can also get much better value from the money available than buying from an agency. On the down side this is time-consuming and carries a range of risks with which people may not be familiar. If you employ a friend and he turns out to be on benefits, will you be liable? What happens to your care when your personal assistant is unwell or on holiday? How would you cope if someone claimed unfair dismissal? Most people are not in a position to assess these risks, let alone manage them.


Most businesses, including social enterprises, cope with risk quite easily. They may limit their liability through incorporation into a company limited by guarantee, take out Employers Liability insurance, and develop policies and procedures to ensure they are obeying the law and implementing it fairly. Once you get the hang of it it's quite straight-forward - when we set up Community Glue it took us about three months, putting in about a day a week each. But this is a tall order for someone who just wants to cover their support needs. Disability activist Vic Finklestein compared it with going to a restaurant, then finding that you have to buy the ingredients, hire the cook and plan the menu yourself!


So how about people who use Direct Payments forming a social enterprise to employ their Personal Assistants? As well as managing the risk and minimising costs through the 'economies of scale', this could have a range of other advantages. Organisations developed in this way might ultimately hold Individual Service Funds (currently only available to people using expensive residential care). Using a social enterprise structure could also enable a small part of the budget to be saved an reinvested to extend support to people outside the original group, or help set up similar organisations in other places. This might help build knowledge and capacity in communities.


b. Selling Care to Direct Payment users


Often people who want to purchase their care directly don't want to be employers, and end up contracting with people who are self-employed. Some people in this group don't know a lot about employment and care law themselves, which sometimes leaves them and the people they care for at risk. An example is that providers of adult care are required to register with the Care Quality Commission. Like forming a company, this provides extra protection for both parties but like forming a company, people often think it's too much hassle.


Supporting self-employed or casual carers to form a micro-enterprise could help them register with the CQC and meet their standards, whilst keeping the costs manageable. Sharing costs would also mean simple things like tax returns, DBS checks and invoicing customers would become cheaper, and optional extras like supervision and training could become possible. Anecdotally we know that people will pay extra for this type of care, particularly where it comes from within their own communities.


c. Broadening support options: micro-enterprise examples


I've already talked briefly about micro-enterprises, but I haven't said much about what they do outside of providing basic care and support. The examples in this section are summarised or linked directly from the Community Catalysts web site. What they show is that support to develop social enterprises can help new supports to evolve or develop existing businesses to provide support. Even if the business is not successful in financial terms there can still be a lasting legacy in local communities, simply by putting people with common interests together.


  • Pulp Friction


Pulp Friction Smoothie Bar CIC is a Nottinghamshire based enterprise who work with young adults with learning disabilities to develop their social, independent and work-readiness skills. They provide opportunities and individual support for people to run pedal-powered smoothie bars at different community events. Jill enrolled on a course for people interested in developing Social Enterprises which was run by the East Midlands School for Social Enterprise (EMSSE). As a result of doing the EMSSE course Jessie and Jill decided to set up Pulp Friction as a social enterprise. They now provide a range of other supports and services.

Pulp Friction

Pulp Friction Smoothie Bar


  • Streetly Dementia Support


Diane set up a dementia cafe in Walsall, near Birmingham, when she found herself caring for an older sister who had been diagnosed with the disease. The web site now describes the support as being provided on a voluntary basis; clearly the 'market' model, using Direct Payments to pay for support, is not always the most suitable.


  • Hertfordshire Community Interest Company (CIC) Farming for All


Farming for AllFarming for All


This is an example of an existing business that received support to develop and market its existing services and supports to people using Direct Payments.





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