When was the last time you winced at a tradesman's price list? The breakdown
of close-knit communities means that many people have to pay over the odds
for small errands that a neighbour could do - or go without.
To counter this trend, more than 100,000 Britons have joined local exchange
trading systems (Lets) or time banks - schemes that enable members to trade
skills, and sometimes goods, using credits rather than cash. These build on
the premise that everyone has something to offer.
One member might do some DIY, for instance, and use the credits earned to hire
a dog-walker. In turn, the dog-walker might then spend his or her credits on
a home-made cake or Spanish lessons.
Under both systems members can start by requesting, rather than performing, a
service, but they are expected to do their best to return to credit. No
member is ever indebted to another, however. “That makes it much easier to
ask for help,” says David Leadbeater (see case study, right), a retired
farmer and member of the North Cotswolds Fair Shares Time Bank.
Lets tend to operate in more affluent areas than time banks. The 300 or so
British examples are run by members and exist as friendship networks as much
as alternative economies. Each uses a named notional currency - “readies” in
Reading, for instance, and “concrete cows” (CCs) in Milton Keynes -
equivalent to the pound for tax purposes.
Peter Hughes, 71, is chairman of MK LetNet, the Milton Keynes Lets, which has
60 members. He says that most join for “the social factor” and to save money
on smaller jobs. He adds: “Some might otherwise struggle to find someone
suitable who would not charge too much for a trifling task, such as hanging
a door.”
One enthusiastic member is Carol Barac, 69, a retired town planner. She makes
several trades a month and sometimes puts out a request for a group of
members to work together on her garden. “I pay 10CCs an hour each and lay on
lunch and a barbecue. It's a great day for everyone and my garden has never
looked better,” she says. “Otherwise, I cook or iron to earn CCs and use
them for odd jobs. Peter [Hughes] does electrical work and is very popular,
and we also have a carpenter who has done a lot.”
Members of MK LetNet pay £10 a year to cover mailings and 20CCs for
administration. They receive an annual directory listing “wants and offers”,
plus members' contact details. Transactions are negotiated between the two
parties and reported to the scheme's accountant. If a job requires
materials, the member doing it can opt to charge for them in sterling.
Mrs Barac's garden days are among a number of social events. The calendar also
includes an evening at the pub once a month, when members meet for a meal
and drinks, plus a big get-together at new year. “We also have tabletop
sales, where members can trade things such as cakes and bric-a-brac with
CCs,” Mr Hughes says.
While MK LetNet is open to all ages, most members are middle-aged or older.
Mary Fee, of LETSLink UK, a network for Lets nationwide, says that this is
typical but should change with the expansion of new web-based systems now
being given trials. These build on the model of social networking sites and
allow members to update their wants and offers, monitor accounts and log
transactions. They also enable the transfer of credits between schemes -
useful if someone moves to a different area.
Martin Simon, of Time Banks UK, says that a transfer facility is already in
place across the nation's 700 time banks. Unlike Lets, these are funded by
outside agencies and have staff.
Where Lets members set a value for a service - charging more for plumbing than
babysitting, say - time banks deal exclusively in time. An hour of work,
whatever it is, costs and earns one tax-free “time credit”.
Mr Simon says that most time banks operate in disadvantaged areas. One example
is the Rushey Green Time Bank in Lewisham, South London. This was founded by
the local GP surgery and the New Economics Foundation to promote “wellbeing
and health, social inclusion and social capacity”. Maria Meska, the time
bank's “broker”, or paid administrator, says: “Our members range in age from
16 to 93. Some are referred by their doctors, who realise that a happy
community puts less pressure on the NHS. The most common exchanges are in
DIY, garden work, cooking and dog-walking, but members can also spend
credits on courses in areas such as IT and poetry.”
As broker, Ms Meska is responsible for matching members and recording their
exchanges. She also hosts coffee mornings and leads trips to the seaside.
“It is not about getting things for free,” she adds. “It is about neighbours
helping neighbours.”
Patricia Maguire, 64, was referred to the scheme in 2006 after a serious
breakdown. The retired civil servant works two hours a week teaching IT
skills to other members and spends her time credits on the time bank's
poetry courses, as well as odd jobs. She says: “The scheme has helped my
recovery enormously, making me feel part of a community. Next week I'm
having a treat - a massage for one time credit.”
Despite the general trend, a number of highly successful time banks have been
started in affluent rural areas. The Fair Shares schemes in the West
Country, for instance, build on local interests and help newcomers to
integrate into village life.
The principal can also be applied on a micro scale. Time Banks UK publishes a
free guide to neighbourhood time banking, which explains how to set up a
small unregistered group for up to 30 local members. To request a copy, call
0800 6941391.
How to be a successful schemer
- To search for Lets or time banks, visit LETSLink.org.uk or TimeBanks.co.uk.
If neither exists in your area, both websites have advice for setting up a
new scheme.
- Each Lets or time bank has its own joining process, but most applicants are
interviewed and may be required to confirm their commitment to the scheme's
ethos.
- Under both schemes, members are encouraged to trade as often as possible,
but there is no set minimum participation requirement. In fact, members who
work full-time might make only one deal a month.
- Credit is not binding under either system, in that members can leave in the
red. Under the Lets model, however, those able to do so may be asked to
balance their account.
- Credits are not guaranteed. If a Lets or time bank collapses, it ceases to
exist, so members are advised not to take on tasks that they would not do
free of charge.
- The Government has ruled that time credits earned in time banks are
tax-exempt and do not affect members' entitlement to benefits.
- The tax position with Lets is that credits earned for “social favours”, such
as mowing a neighbour's lawn, are not taxable. But where a professional or
tradesman works for credits, then for tax purposes each credit is worth £1.
So if a plumber, say, charges 100 credits, the tax would be the same as that
on £100 and he might ask a member-client to cover the tax cost in cash.
- The benefits situation is not clear-cut, but Mary Fee, of LETSLink UK, says
that most transactions are covered by a 2001 ruling, which states that
credits earned in “time-based” trading schemes do not affect entitlement. If
in doubt, contact your benefits office.
CASE STUDY
David Leadbeater, of Mickleton, Gloucestershire, joined the North Cotswolds
Fair Shares Time Bank six years ago on a friend's recommendation. The
65-year-old retired farmer, left, earns time credits working on “bits of
plumbing, gardening, painting and decorating”.
He says: “I am a very keen gardener and use my credits to get help on my
allotment. There is always a lot of digging and planting to be done. The
real beauty of the scheme is that everyone's time is equal. I have always
found money to be abstract, impersonal.”
Villagers looked out for each other before the scheme started, but Mr
Leadbeater says that people now feel more comfortable asking for help. “No
one feels guilty about not returning a favour under this system,” he says.
“I help one person with something I can do, they help someone else in their
way and so on.”
Lyn O'Donnell, one of the scheme's two co-brokers, says that Mr Leadbeater's
use of the scheme is typical. The time bank has 150 members, all of whom
live close to its Moreton-in-the-Marsh headquarters.
A recent development is the time bank's agreement with the National Trust,
under which members can earn time credits working on maintenance and
restoration at the Arts & Crafts Hidcote Manor Garden. Last year the
trust hosted a free day out for Fair Shares members, including a tour of the
gardens and afternoon tea.
