Access to good-quality, affordable care for people with disabilities and older people is a challenging issue.

Demographic changes are increasing the number of people who need care at the same time as public spending cuts are leading to dramatic reductions in local authority care spending. Stories of care that is rushed and poor quality are common. Policy-makers struggle with the conundrum of how to ensure that the standard of care gets better without overly burdening the public purse.

Research published this week by the University of Birmingham suggests that part of the solution may lie in micro-enterprises: very small organisations (with five staff or fewer) that can provide care and support.

The Department of Health has been keen to encourage these organisations, arguing that they can provide individualised and innovative support. In a two-year research project funded by the Economic and Social Research Council, Catherine Needham, Kerry Allen and Kelly Hall from the School of Social Policy at Birmingham have worked with a wider team of researchers to explore the contribution that these micro- enterprises make by comparing them with larger care providers.

Twenty-seven care organisations in England took part in the study, covering a range of sizes and functions, including day activities and care in the home. Interviews were carried out by academic researchers working alongside people with experience of local care services on a co-research model. Among the 143 people interviewed were owners, managers, members of staff, carers, and those receiving care services, including older and disabled people.

Findings show that micro-enterprises offer more personalised support than larger care services and contribute to better outcomes (measured using ASCOT, the Adult Social Care Outcomes Toolkit). These benefits seem to be based on micro-enterprises having greater continuity of staff, greater staff autonomy, and greater accessibility of managers compared with larger organisations.

The research also found that micro-enterprises offer good value for money: their hourly rates were on average lower than the comparator organisations, helped by low overheads.

Micro-enterprises are also innovative in the ways in which they deliver care. As a micro-enterprise coordinator in one of the localities put it: ‘We have a lot of traditional services – people who do home help, personal care, shopping, meal preparation. But it’s their approach to it that’s different. One of the micros I work with will do meal preparation, but they will also sit down and have a meal with that person, interact with that person.’

Many micro-enterprises are set up by people who are disillusioned with working for large organisations or have experienced poor-quality care for a member of their family. The research found that to get started and keep going they need dedicated business support to help them understand care sector regulation and funding, as well as more general small business advice.

They also need help to market their services to potential users, as they aren’t likely to have a formal contract with the local authority in the way a large care company will. Most found that word-of-mouth and local advertising was a more reliable route for gaining people to support.

These routes may be adequate if people needing care are self-funders or receive their care monies from the local authority as a direct payment that they spend themselves. However, the relatively low take-up of direct payments by older people highlights the need to provide alternative routes into micro-enterprise.

Social workers, GPs and other care professionals need to be informed about micro-enterprises operating in their area so that they can match people with support in their local communities.

Dr Catherine Needham, Reader in Public Policy and Public Management, University of Birmingham