Luxating patellas are pretty common in small breed dogs; sadly, Mitzi is in good company! Many dogs with these "trick knees" do well long-term without surgery (although they do develop arthritis in that joint as they age), but for some dogs they do hold the leg up frequently, do a lot of 3-legged hopping and those dogs often do better having surgery.
Many general practitioners these days do not do orthopedic surgeries, mainly because we don't see enough to feel competent. I would ask your vet if he/she has done them and how many, but otherwise I would ask for a recommendation to an orthopedic surgeon (a board-certified surgeon. They do both orthopedic and soft tissue surgeries).
Glucosamine is not going to be of much use, but it won't hurt Mitzi if you want to start her on it. Swimming is definitely good exercise and acupuncture might help, too. If she starts using the leg more and doesn't seem uncomfortable using it, you may be able to postpone surgery indefinitely.
The patients I've had that had this surgery have done very well afterwards. I've seen no surgical failures or complications and not much more arthritis issues long-term than in other old dogs. The cost is probably going to be in the ballpark of $1500, but you will need to get an estimate from your vet. That is my ballpark for the upper midwest area of the US and is probably way off from vet prices in the UK! So please don't take my word on the price at all!
Here is a good website with more information you might find helpful: http://www.VeterinaryPartner.com/Content.plx?P=A&A=2448