Micro-enterprises, social care and inclusive local economies

21 May 2020 · Categories: Communities Care

Exciting new report launched by the New Economics Foundation (NEF) and Community Catalysts today. Study into community micro-enterprise as a driver of local economic development in social care. Of interest to economic policy makers as much as social care commissioners – illustrating through the example of micro-enterprise how social care can be a way to develop and strengthen local economies, starting with the reality of local conditions and building up #inclusiveeconomies and #creativecare. Guest blog from NEF posted below


Public understanding of social care is low. Many people are unsure what it is – never mind how to get it, or who pays – until they or someone close to them comes to need support beyond what friends and family can provide. A lot of care work goes on behind the closed doors of people’s homes, hidden from view. When it happens in public places, it’s unlikely to have a social care hat on: a dance workshop inclusive of disabled people or an arts club for isolated older people are not ‘social care’ to those involved – they are just a dance workshop and an arts club.

Because of this, the sheer scale of social care can be a surprising fact. The workforce is made up of 1.5 million people, bigger than the NHS. It is a major sector of the economy and a foundational sector too, essential to millions of people. By supporting them in diverse ways, social care provides the ‘invisible scaffolding’ they need to live the life they want, regardless of age or disability.

It is, nonetheless, overlooked by economic policy makers. An obsession with GDP does not favour social care: it’s hard to measure productivity in a sector where outcomes, not outputs, are what counts. The purpose and value of the service gets lost, and it’s treated as a cost rather than an investment. More fundamentally, the people who stand to benefit from public investment in social care are not wealthy. The means test restricts access to those on low incomes, while care workers themselves are generally paid close to the minimum wage. Inequalities in power are central to the undervaluing of care.

The oversight by policy makers is huge, not least because there is vast scope for improvement in social care. The system is failing on many fronts. A market approach incentivises providers to compete to win business, scrambling to undercut each other. Chain companies, whose business models are suited to short-termist, cost-driven, competitive tendering, gain market share. Care worker jobs become more precarious and care itself can resemble a ‘factory production line’, with people needing support having little say or control.

Locally, there are glimmers of hope. A small but growing number of social care commissioners are trying to shift away from the status quo. Other policymakers in local government are developing strategies to build more inclusive local economies. They should join the dots. As a sector rooted in the everyday lives of millions of people, social care has the potential to drive creative new approaches to economic development. The objective of meeting care needs is connected to a lot of other objectives: building local wealth, lifting up job quality, reducing unemployment, improving health and wellbeing, and supporting more connected, resourceful and powerful communities, to name a few.

We at the New Economics Foundation and Community Catalysts are interested in the question of how social care can become a stronger driver of inclusive economic development. Our report, published today, explores the benefits to local economies of one particular approach to care. Community micro-enterprises are small social businesses that provide support in diverse ways. In places like Somerset, where they have been promoted by the local authority, they have proliferated – with numbers jumping from around 50 to more than 450 over five years. We find that micro-enterprises can enable personalised care, by devolving decision making to people at the frontline. They also spread an accessible form of entrepreneurship, create roles that offer more autonomy and control than a typical care job, and build resilience, creativity and diversity in social care. In doing so they help to draw people into the sector and encourage them to stay. A third of the micro-entrepreneurs we surveyed doubt they would be working in social care if they hadn’t set up their micro-enterprise. Two thirds expect to continue running their micro-enterprise for five years or longer.

Local authorities have a crucial role to play in supporting the development of ventures like these. They can encourage the spread of micro-enterprises as part of a family of care models that promote inclusive economic development, such as co-operatives, social enterprises and user-led organisations. These models are often locally rooted, they are driven by social purpose, and they generally seek to be accountable to the people they support. Policymakers should not see this as a marginal endeavour: the goal should be a bottom-up rejuvenation of communities and the economies that serve them. This will require long-term public investment, along with willingness to collaborate, experiment and learn.

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