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UK LETS and Complementary Currencies
Development Agency

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ARTICLES,
PAPERS &
REPORTS
published by
LETSlink UK

Central & Local Hubs

• Table of Contents: Background • Moving Forward • The Vision • UK Hub • County Hubs • Local Groups • Network Groups • Project Groups • Inter-Group Exchanges • Development

Background

Local Exchange Trading Schemes (LETS) have been in existence, since the early 1980s. LETS are local communities that exchange skills and goods in order to fulfil each other's needs at no cost or profit using a currency, unique to their local group. Person A can exchange with person B, either in a direct exchange of goods/skills, or, for an agreed amount of the local currency, which person B can use to exchange with another member of the group.

Michael Linton's original ‘LETSystem’ was developed from experiments with the green dollar in Canada combined with the business barter model, and some groups were set up in the UK following this protocol from 1985 onwards. Liz Shephard established the more community-based UK LETS Model and promoted this through ‘LETSlink UK’, from 1991 onwards, establishing up to 450 Local Groups throughout the nineties. Both models have been promoted globally, further variations have occurred, and there is now a wealth of experience to draw from in running LETS successfully. The term ‘Trading’; within LETS this is not used in the commercial sense, since exchanges are between individuals and bear no relation to sterling (or indeed to stocks and shares).

Michael Linton's original ‘LETSystem’ envisaged the local currency as being identical in value to the national currency, but most groups who followed the LETSlink model, which encouraged local variations, set a standard rate per hour as an guideline, which enables fairness for members who wish to exchange on an equal basis. However, groups set widely differing values for their currency in relation to the hour, and there's a tendency when members become close friends with other members, to simply do a good turn without recording it as an exchange, so all these variations are possible. When Timebanking was later set up in the UK, around 2000, based on Edgar Cahn's Timedollars in the United States, care was taken to portray the activity as a form of volunteering, measured in hours.

LETSlink UK set up a central website in 1998 for people to find their nearest LETS group, download material like Member Agreements, and to keep up with the latest news and events and have continued to provide this service in a modest way at http://www.letslinkuk.net. When Michael Linton returned to Canada, Richard Kay, one of the trustees of the LETSystems Trust, kindly hosted a discussion list for LETSlink nationally, and LETSlink London, but we have used both of them rather nervously, due to rather quarrelsome conversations that took place in the past when proponents of the sterling-based and time-based models personalised their arguments. Meanwhile, Rob Follett hosts a discussion list for the Southwest, which continued to flourish as the region with the highest number of surviving groups.

Over the past two decades, a number of individuals launched technical exchange websites, some avoiding the whole issue of "value" by using the model of gratuitous giving, but none have gained sufficient adherents to build up any volume of trading, while innovations such as BitCoin in the commercial space have grabbed the limelight. Meanwhile, Transition Towns attempted to scale up complementary currencies by means of printed notes - with very mixed success. So the overall picture has been failure to build a viable complementary currency movement because of the lack of (or poor uptake of) effective web-based systems. and poor co-operation between different movements across the sector.

Moving Forward

During this period, LETSlink tracked the systems that were becoming available, and referenced them on www.cxss.info - but the variety of systems, and lack of funding to support groups, has in itself has been divisive, with providers of different systems forming their own competing hubs, some based overseas, one, astonishingly in South Africa! In practice, most groups did not have access to web-based systems, but used a variety of "workarounds" for managing internal communications, and some tentative "inter-trading" occurred with adjacent schemes having mutual "foreign accounts" or forming local hubs, e.g. ‘Bristol Interlets’, which in its heyday co-ordinated eight Local Groups, later they abandoned this and amalgamated into a single city-wide group - but this was made possible by a new web-based system provided by LETSlink, with software that eased the process of trading, allowing the scheme to operate city-wide.

LETSlink's most popular system is called Local Exchange, which came to us from the US, coded by Calvin Priest, under the direction of Francis Ayley, the founder of North London LETS. Progress in groups adopting this system is being tracked on http://www.localexchange.org.uk. Several of the organisers using this scheme have helped to evolve it and make it even more useful, and although one would wish at least in theory to be neutral towards different software, it has to be said this one, probably due to the fact that it was commissioned by an experienced LETS organiser, has proved to be most fruitful. Also, while there is definitely room for different styles or "brands" of exchange group to be developed, there are definite advantages in typical geographically-based community groups, who welcome all different types of people without discrimination, and encourage a range of activities within the scheme, adopting common standards in the way they manage their groups.

The Vision
Our current proposal, having developed a great deal of experiencing in supporting local groups by installing web-based software, is for LETSlink UK to develop itself as a more effective national network, comprising: A Central Hub - for national inter-trading Regional networks encouraging co-operation across the sector County Groups - to fill the gaps where there are no groups Local Groups (which already exist), but may well increase once there's more support networking with Network Groups, and Project Groups being developed within local LETS. These entities are described below and progress is being tracked on LETSlink UK's regional site: http://www.letslink.org.uk

UK Hub

The launch of the UK Hub, as a LETS of LETS using the same proven system is a key innovation that will allow groups to keep their local currency and deal, fairly, with other groups throughout the United Kingdom and elsewhere, and bring atomised groups together, thus strengthening the movement as a whole. This scaling up and down is an example of a "Fibonacci series".

The primary purpose of the UK hub is simply to facilitate communications between LETS organisers all over the UK, which is an urgent requirement, as many of them are experiencing isolation, and do not feel part of a national movement. In parallel, we will start using our e-list more frequently, to facilitiate discussion, but based on difficult past experiences, this needs to be well-moderated, and not used to spam members. Within the hub itself, the software enables geographical selection of members, so this will also facilitate local networking.

Additionally the hub will allow group to group transactions, which means that sharing of resources can be acknowledged, which will be useful when work is done around regional conferences, for example. This will also be useful for travelling, for example, if a member of one group is looking for accommodation in another area, there may be a LETS Group member, in that area, who can provide this, without the need for a direct exchange.

One challenge in providing a central intertrading service is when there are local variations, but we believe we have found a logical solution to this, which is to make the central hub time-based. For intertrading from one individual to another, transactions will go from group to group on the central hub, and systems at each end will manage the local transactions. Thus, individual A transacts with Group A's external account. Group A's external account transacts with Group B's external ccount on the Central Hub. Group B's external accounts then transacts with individual B.

The aim is for all existing LETS groups to have accounts on the UK Hub. They are not required to have their own web-based systems - - but the more they can automate their internal processes, the less work will be involved. Using Local Exchange for membership of groups both nationally and at county level - see below - will give organisers a "member experience" to familiarise themselves with how this same system might work within their own scheme.

County Hubs
We have now identified these as the next urgent priority, because where local groups have faded, in some places there simply isn't a LETS group, so we must develop these in parallel, creating accounts for groups at both county and national level simultaneously, in a structured way. Where local groups exist they can have a more immediately option for networking, and this will provide a local option for intertrading. County hubs may also be in a position to 'host' a variety of Skills Exchanges and Special Project groups, while local organisations and businesses may benefit from sharing resources with others on a broader geographical basis than the typical Local Group. When first established, community hubs also provide an initial "exchange area" for individuals who don't have a group close to them, and will facilitate making connections with other such individuals.

Local Groups
In many areas, local groups already exist and provide support, exchange and socializing opportunities among their members to encourage exchanging on a one-to-one basis. Such groups also can 'host' Skill groups and Project groups, but at a local level. Local Groups have usually been set up at the level of a town and its environs, but in order to make progress, any new schemes being set up will need to operate on a county-wide level initially, to cover the gaps we have identified in local provision. Due to workload issues, we anticipate that new resources will be needed to support these developments. Only time will tell whether people will find trading on the county hub fulfills their needs, or whether it will inspire them to set up more local groups. Thus county hubs will take their place in the Fibonnaci Series.

Network Groups
These groups are comprised of people with a similar mission, maybe at different skill levels, e.g. Teachers, Mothers, Nurses, Carers, perhaps even tradesmen, etc, or having common interests, e.g. Festival-goers, etc. Networks can evolve at local or County level and are managed by brokers who facilitate the allocation of exchanges and may be involved in training. On a national level they may evolve into providing forums to share information and explore issues that will be relevant to each skill area.

Project Groups
Should a local group or regional hub decide to work on a community project like conservation, caring, etc, they would set up a team to handle the project and allocate resources to it like local currency for the members of the project group, finance for materials, etc. Organisers of local groups who thrive find that such projects are a valuable way to sustain their groups, as they enable members to come together and outreach into the community in a conscious way to achieve a particular result. Establishing the policies and deciding how much budget to allocate, provides organisers of local groups who care about their local community with a way of organising themselves to "make a difference". Another spin-off is that members taking part in such projects are brought into contact with each other on a regular basis, which may encourage new cycles of one-to-one exchange.

Inter-Group Exchanges
The biggest problem for groups attempting to exchange with each other, has been that local currencies do not have a common basis to enable conversion of one to the other. As previously mentioned, most groups have set a guideline value, but these vary to a surprising degree. For example, one group uses 'Ebbles' and another uses 'Olivers'. For these groups, the guideline is 10 'Ebbles' for one and 25 'Olivers' for the other. Many groups have lower values, the lowest we are aware of, in Derbyshire is 4, but 5 or 6 units are quite typical.

The Central Hub uses the concept of a base currency unit, which we could call an Hour, but a more memorable name could be used such as the 'Hubble' - to create a conversion system within its operating software. So to explain: The Ebble person wishes to charge 20 'Ebbles' for their offering, which equates to 2 'Hubbles', which, in turn, equals 50 'Olivers'. Therefore, both parties can use their own currency but agree a successful and fair exchange. The way to manage this is for group to group transactions to be in "hours", so groups will need to translate their local currency, with its particular value, into the equivalent in hours, which can be done either arithmetically (before they do the transaction), or in due course, we can develop an automaticed mechanism, so that groups will "register" their rate per hour in the system, which will do the arithmetic for them.

Development
In principle, any group, whether local or county or special can have an account on the central hub as long as they fulfil criteria established as a condition of membership (such as subscription payments to support central costs, and adoption of rules etc). On the county level the same pattern can apply or we may decide on free membership, at least for a limited period, to encourage participation. We may also adopt the mechanism of donating and acknowledgement in local currency, which would provide encouragement for county hubs to be sterling-based, adopting a standard rate per hour to be agreed nationally (probably 10 units per hour). The volume of exchanging which occurs at each level will depend on how well the system is managed and promoted - the same factors that determine the success of local groups. The kind of exchanges that work well at each level will be discovered from experience, and as the scheme matures, new needs that emerge can be catered for.

The above plan is a massive one, so the question is where to start, and we have decided to respond wherever we are encouraged to do so. In Wiltshire, local networking has led Mike Lennard, administrator of Salisbury LETS into contact with Community First, and they have agreed to partner with LETSlink UK and Salisbury LETS to support a county hub for Wiltshire, so as to encourage their existing network to adopt the method of recording their exchanges, and help to evolve an overall system, ie county-wide network called Wiltshire Exchange Scheme.

This paper was based on notes made by Mike Lennard on a talk given by Mary Fee to Salisbury's AGM on March 8th 2011, and marks a point where LETSlink began to move forward based on local support and collaboration. We feel that having a well-established voluntary organisation on board will give the scheme a boost, and in the next paper, we will report progress on this, so watch this space.

Mary Fee, Secretary, LETSlink UK
- draft at 9th November 2013

© Published by LETSlink UK, 12 Southcote Road, Tufnell Park, London N19 5BJ