ESRC Project Report: Co-ordinators Survey

Evaluating LETS as a means of tackling social exclusion and cohesion


  Project Team

Theresa Aldridge
Roger Lee
Andrew Leyshon
Nigel Thrift
Jane Tooke
Colin Williams

Report produced by Jane Tooke, August 1999

Contents


Project Aims and Emerging Project Themes

1. Introduction: about this report

2. Participating LETS

3. Origins and development of LETS

4. Currencies

5. Membership
    5.1 Number of Accounts
    5.2 Organisational Membership
    5.3 Membership Profile

6. Trading
     6.1 Turnover & Activity
     6.2 Regulation of Trading

7. Publicity & Funding

8. Organising the LETS
    8.1 Decision Making
    8.2 Problems with Trading
    8.3 Other Activities

9. Organisational Links

10. Diversity of LETS

11. Summary
 

  • Identify the social bases of LETS. To what extent do LETS represent alternative forms of social relations and constructions of value? What are the consequences of these alternative social relations for tackling social exclusion and cohesion? How does this vary with locality?
  •  Evaluate LETS as a vehicle for tackling economic exclusion. Is there evidence of new economic activity, part of a strategy of self-employment, new firm formation, skills acquisition, re-socialisation into the labour market. What limits their economic impacts and how and why does this vary locally?
  • Evaluate LETS as a means of tackling financial exclusion. Who uses LETS, and how, to acquire credit? What factors limit access to credit on LETS? How and why does this differ locally?
  • Evaluate LETS as a vehicle for tackling social exclusion. Do they provide the means by which the socially excluded can re-build their social networks and source of support. Does this vary locally?
  • Assess LETS as a tool for creating social cohesion. Does individual empowerment result from participation? What are the barriers to joining and participating in LETS for different groups and how can these be overcome? How does social cohesion vary locally?

Emerging Project Themes:

1) Constructions of value
     To what extent do LETS represent alternative forms of social relations and constructions of value?

2) Economic exclusion
     Is there evidence of new economic activity created through LETS?
     Are there strategies of self-employment?
     Is there evidence of skills acquisition through LETS?
      Is there evidence of re-socialisation into the labour market?

3) Financial exclusion
     Who uses LETS and how to acquire credit?
     What limits access to credit on LETS?

4) Social networks
     Does LETS provide a means by which the socially excluded can re-build social networks and sources of support?
     To what effect?

5) Empowerment
     Does individual empowerment result from participation in LETS?
     Is participation in LETS useful in developing self-confidence?

6) Place
     How has the issue of place been discussed by LETS members?

7) LETS as an organisation
    How is the organisation of LETS described and perceived by members?
 

1. Introduction: about this report

This report is based on data collected from a survey of LETS co-ordinators/ co-ordinating groups. Questionnaires were sent to 303 groups, 113 (37%) were returned completed. This report outlines the main findings of this survey, where possible it also relates these findings to the project themes previously outlined and identifies emerging issues. Four themes are directly relevant, these concern: constructions of value, economic exclusion, social networks and the significance of place. But the main value of this report is that the findings paint a general picture of the types of organisation LETS have evolved into, the levels of activity present and extent to which these are similar/different. It is also important to note that the findings presented here will be elaborated on further as they are analysed in conjunction with the findings of the membership surveys and qualitative case studies.

2. Participating LETS

The majority of LETS that responded are based in rural areas (30%) and towns (28%). With smaller proportions covering neighbourhoods (14%) and cities (9%). There are also a substantial minority of groups that specify another type of area (18%) these groups predominantly cover a number of towns and the surrounding areas.

The size of the area covered by the participating LETS ranges from 3 to 750 square miles. Despite this wide range, the majority of groups (69 %) are at the lower end, covering areas less than 50 square miles, the mean size being 78 square miles. Only 8% cover areas larger than 300 square miles.

3. Origins and development of LETS

The oldest LETS in the sample began in 1986, despite this early beginning only another 8 groups (7%) in the sample had started by the end of 1992. The majority starting up over the years following this: 15 (14%) in 1993, 20 (18%) in 1994, 19 (17%) in 1995, 16 (15%) in 1996, 20 (18%) in 1992 and 9 (8%) in 1998.

The majority (80%) were started by a group of people. These groups came into contact because they share membership of another organisation (33%), live in the same area (26%) or are friends (18%). Less frequent points of contact are following an advert in a newspaper/shop (9%), previous membership of a larger LETS (3%) and at public meetings (5%). Of the remaining 20% of groups started by individuals, the majority (70%) are started by women.

The main reasons for setting up the LETS are most often community building (33%). Other reasons include combating poverty (15%), sharing skills (10%), creating an alternative economy (9%), because it is a good idea (8%), the nearest LETS being too far (6%), enhancing sustainability (4%) and encouraging local economic development (3%).

Since embarking on these aims, 33 (29%) groups have since developed different aims. Most frequently these include community networking (27%), helping disadvantaged members (21%) and an increased importance of social contact (21%). Other new aims include developing offshoot projects (12%) and becoming more mainstream (9%).
 

4. Currencies

Almost half of the LETS currencies (48%) have a floating relationship to the pound, 36% have a fixed relationship and 13% have no relationship.

36% of groups claim that their currencies relate to time worked. However, their responses to the question reflect the existence of a recommended pay rate (specified by 41% in another question) rather than an actual time based currency. Only Harringey LETS clearly stated that time is their currency. Of the 42 groups that recommend hourly rates of pay, only 2 suggest that these rates are not widely accepted.

Recommended pay rates range between 4 and 10 units per hour. Most often these rates are introduced as a guideline (54%), but also to encourage social equity (17%) and for simplicity (8%). A minority of groups (17%) have experienced some problems with these pay rates. Most frequently this is because, as one group put it, ësome argue a professionalís time is worth moreí.

These findings shed some light on the question central to Theme 1, that is; to what extent do LETS represent alternative forms of social relations and constructions of value? It suggests that the discourse of social equity present amongst LETS is not unproblematic. Ideas surrounding the equal value of skills are contested by some, the issue being the time/money previously invested in professional skills. However, whilst this issue does present a point of contention, the data also suggests that it is only a minority of groups where this issue is problematic.
 

5. Membership

5.1 Number of Accounts
The number of membership accounts held by the participating LETS range from 11 to 350. However, a quarter of the sample had membership accounts numbering 33 or less, half 51 or less and three quarters 89 or less, only 7 groups (6%) have memberships of larger than 200. Thus despite the wide range in the number of membership accounts, groups in the sample tend to be quite small, the mean size being 72. There is some correlation between the number of membership accounts and the date groups started operating. All groups with less than 20 members started after 1993, whilst all groups over 200 started before 1995. Thus older groups tend to have larger memberships, suggesting that over time groups continue to grow.

5.2 Organisational Membership
Membership accounts are mainly held by individuals, couples or families, but some LETS also had organisational members. Community organisations were most common, with 49% of groups claiming to have some as members. However, as many as 81% of these groups only had 1 or 2 community organisations as members and only 1 group had more than 10. Registered businesses were the next highest category of organisational membership with 46% of groups having some as members. Of these 39 groups, 59% had only 1 or 2 businesses as members, although 4% had more than 10. However, in all these cases the majority of what co-ordinators classify as businesses were self employed people without employees. The next biggest category is voluntary organisations, 36% of groups have some as members, of which 79% had only 1 or 2 as members and none had more than 5. Finally the smallest category of organisational membership was churches, only 7% of groups had churches as members and in each case this involved only 1 church.

5.3 Membership Profile
The survey asked co-ordinators/ co-ordinating groups to describe the characteristics of individual members and estimate percentages. The category with highest proportions concerned professional members (mean = 41% of membership). This category was used by 39% of groups. A quarter of these groups estimated that at least 20% of members are professionals, and over half that more than a third of their membership consists of professional members. The next largest category was that of unemployed members (mean = 29% of membership). This category was also specified by 39% of members. A quarter of these groups estimate that at least 10% of members are unemployed, whilst another quarter estimate that more than a third of their membership are unemployed and only 12% of groups estimate that over half of their membership are unemployed. Thus suggesting that unemployed members do not make up a large proportion of LETS members in the majority of cases, at least within this sample. The percentages for retired people are slightly lower again (mean = 20% of membership). This category is also used by a lower percentage of groups (22%). Half of these groups estimate that their membership consists of more than 17% retired members. Other common descriptive categories used are self employed (mean = 24% of membership) and low paid employees (mean = 43% of membership). However, the numbers of groups specifying a proportion of members in these categories are much lower, 9% and 6% respectively. As a consequence it is not possible to make useful comparisons.

Approximately one quarter of groups (24%) target publicity at specific types of people. Most often this targeting is aimed at various categories of low income groups. The most frequent method used to target these groups involves leafleting and talks in relevant places, such as community organisations. Although Ludlow LETS have introduced a reduced subscription rate and Tring and Hemel Hempsted LETS have organised for a card to be given to all those on benefit.

A significant minority of groups (22%) claim that the profile of their membership has changed over time. The main way that groups describe this change (40%) is in terms of becoming more mainstream. Groups described this transition in ways such as ëfrom a homogenous group of community/environmentally aware to a greater diversity from wide ranging backgrounds and lifestylesí and ëwe now have a high number of members who need the scheme and not who simply want the schemeí.

Many of the participating LETS feel that there are particular types of people underrepresented in their membership. The most common category  specified by groups is skilled trades people (33%), followed by unemployed people (29%), young people (21%), low income groups (20%), older people (13%), ethnic minorities (13%), professionals (11%), businesses (9%), local people (i.e. not incomers) (7%), people with disabilities (6%), people with dependent children (5%) and lastly, affluent people (3%).

This picture of membership profiles raises a question relevant to Theme 4, namely what proportion of LETS members should be classified as ësocially excludedí? People co-ordinators describe as ëunemployedí or ëretiredí neatly fit into this category, whilst low paid employees may not and professionals are even less clear. Given the estimates of the proportions given by co-ordinators it does appear that at least a significant minority of members might be thought of as socially excluded, although at the same time co-ordinators feel that socially excluded groups are also underrepresented. Clearly the significance of LETS for socially excluded groups needs to be understood further.

6. Trading

6.1 Turnover & Activity
The annual turnover of groups ranges from 3 to 40,000 LETS units with a mean of 4,668. The total turnover of groups ranges from 3 to 110,000 LETS units with an average of 13,664.  Not surprisingly there is some correlation apparent between total turnover of the group and how long they have been operating. Groups that started by 1995 having turnovers of at least 2000 units whilst groups that started during or after 1997 have total turnovers of less than 10000 units. Annual turnovers are, again not surprisingly, affected by the size of membership with larger groups having higher turnovers. Groups smaller than 50 having turnovers of less than 6000 units, whilst groups larger than 80 have turnovers of more than 2000.

Activity rates in the LETS are fairly low. The levels of trading for each member is estimated by co-ordinators to be most frequently between 1 and 5 trades per year, with the mean percentage of members in this category averaging at 35%. Whereas the mean for activity between 5 and 10 trades was only 26% of members and 24% for more than 10 trades per year. The mean percentage of members thought to be not trading was also quite high (33%).

These findings concerning the extent of turnover and trading activity relate to questions raised in Theme 2 regarding evidence of new economic activity created by LETS. It appears that this activity is fairly low, but nevertheless it may be crucial for those involved.
 

6.2 Regulation of Trading
Approximately one quarter of groups (26%) specify credit and/or debit limits to trading. All of these groups specify debit limits, but many also specify credit limits to avoid members accumulating too many units of currency. The limits range from 100 to 1000 units and are usually introduced to ëprevent abuse of the systemí. Some groups make exceptions to their limits if members want to trade ëlargeí (i.e. expensive) items. Of those who have not set limits, 45% have considered introducing them. The reason for not doing so mainly centre around the group not feeling it to be necessary, although many groups ëkeep an eyeí on the accounts.

A larger proportion of groups (42%) specify guidelines for what is traded on the LETS. Mostly these guidelines specify that only ëlawfulí trades may take place (67%) this mainly concerns alcohol. But often groups also add guidelines such as ënot pornographicí, ëethicalí or ënon discrimatoryí. Other groups place restrictions on the trading of babysitting (14%) either disallowing trades or vetting those offering this service.

63% of groups indicate skill competencies in their directories. Typically this involves indicating categories such as ëprofessionalí, ëskilledí or ëamateurí, less frequently actual qualifications are listed.
 

7. Publicity & Funding

The main form of publicity used is word of mouth, with 64% of groups stating this as their first choice. Second is public posters/flyers (27%), third newspaper coverage (11%), and fourth are stalls (10%). Other forms of publicity include local radio (5%), local community publications (5%) and the internet (3%)

An issue concerning publicity that emerges throughout the questionnaires is the sterling cost of publicity. This helps to explain the heavy reliance on the word of mouth method of publicity as this is obviously free, whereas other strategies, such as the production of leaflets/posters, cost money. Many groups (49%), however, receive some assistance that often help with these costs as well as those of postage and room hire. Most of this support comes from local government sources (76%) in the form of a small grant or use of facilities. The remaining 24% of groups receive assistance from voluntary organisations. This support can be categorised  into start up grants (25%), ongoing administration support (23%), one off support (21%), publicity (14%) and development workers (9%).

8. Organising the LETS

8.1 Decision Making
More than half of the participating LETS (57%) have what they call a core group that makes decisions. Other popular forms are management groups (9%), committees (8%) and steering groups (6%). Less formal forms of organisation are also popular with 10% of groups relying on whoever turns up to meetings. However, even those groups with formalised organisational structures appear to have open decision making groups, 91% of participating LETS state that this was the case.

The majority of groups (74%) rotate their decision making group, although on the whole this is done on a voluntary rather than a formalised basis. Most regularly these groups (77%) made statements, such as ëpeople leave and others take overí. In the remaining 23% of cases more formal replacements are made via elections at AGMís. The main reason for the predominance of the informal approach is that there are not enough willing volunteers to replace those already involved in organising the LETS. This finding is also reinforced by the fact that the most common organisational problem stated by groups is finding people willing and/or competent to undertake administration (36%). Other problems concern communicating the concept (18%), non-active members (17%), general apathy (17%) and lastly that the geographical area covered is too wide (7%) .

8.2 Problems with Trading
More than one third (38%) of groups say that they would or have refused entry to members. Most often comments reflect a desire to exclude people who are known to have a history of criminal behaviour or that have abused another system. More unique responses include ëif they cannot think of anything to offerí, ëif we know theyíre not competentí and they ëmust be sympathetic to the aims of the systemí. A greater proportion (65%) would or have expelled members. The reasons for this are similar, with abusing the system or other members rating the highest, but other reasons include ëconsistently poor serviceí and ëif excessive sterling is asked forí.

Most groups experience problems with members being ëin commitmentí, 8% regularly and a further 54% occasionally. Groups report the reasons for this problem using statements such as ëfeeling that it is wrong to go into debtí and ëno confidence in their ability to earní. Strategies for coping with the problem can be grouped into four types of response: i) encouraging those in committment to undertake administration tasks, ii) helping them think of new skills to offer, iii) explaining that commitment enables others to trade, and iv) indicating the situation in the directory so other members know that they need to trade. One further strategy adopted by 19% of groups is to provide some sort of support fund for members that are in difficulty. Most of these funds are made up of voluntary contributions (85%). The remaining 3 groups, Bishopston, Basingstoke and Gauntlets (Aylesham and surrounds), have compulsory contributions.

8.3 Other activities
Many of the LETS (59%) indicate that they organise activities. 56% of these groups  organise trading days/auctions, also popular are socials (35%), allotments/food co-ops (22%), goods exchanges (19%), working parties (14%) and babysitting circles (10%).
 

9. Organisational Links

36% of groups inter-trade with other LETS. But an even larger proportion (46%) meet with other LETS groups, mostly via regional level meetings (56%). Regional networks include, Cumbria Social Economy Forum, South West Area LETS, Dorset LETS Network, S O LETS, Suffolk Inter-LETS and South Lakeland LETS.

62% of groups are members of a national LETS organisation, most of which (95%) are members of LETS Link UK/Scotland . Most groups found this affiliation useful, with 27% stating that it is very useful and a further 43% of cases that it is quite useful, whilst 9% claim that it is not useful. Reasons given for positive responses frequently mention the conferences organised, information produced and that the organisation provides a source for contacts. More negative comments focus around difficulties in establishing contact with the organisation and the lack of regular newsletters.
 

10. Diversity of LETS

When questioned about the diversity of LETS by far the most common factor  highlighted by groups is the membership (40%). Within this category, co-ordinators often specified that it is either the socio-economic status of members, or the activity of members that is influential. A related membership factor was that of the skills offered by members, this was specifically mentioned by a further 16% of cases. The size of the membership is seen as significant by a further 8% of groups. The enthusiasm and ability of the core group is also seen as important by 16% of groups and the ideological basis of groups by 10%. The next most common set of factors are those relating to the local area. In 24% of cases whether a group is located in an urban or rural area is seen as significant, a further 19% specified, more vaguely, that the type of area is important, 14% the local culture, 11% the size of the area and 6% the density of the population. A less prominent, but perhaps still important factor, is the level of local government and business involvement with 5% and 3% of groups listing these factors.

This issue relates to the Theme 6 and the question of; how the issue of place is discussed by LETS members? The data suggests that the co-ordinators of LETS clearly feel that place is important to how their LETS has evolved. Despite this, however, when urban/rural, size of group, size of membership and levels of activity are analysed no clear patterns emerge. This is not to say that these issues are not important, but that their relationship is complex and one that will need to be drawn out in the membership surveys and qualitative case studies.

11. Summary

The findings of this survey suggest that at present LETS remain fairly small scale organisations in terms of both membership and trading activity. It also suggests that what activity there is occurs mainly amongst middle income groups, although lower income groups do appear to be a substantial minority of members. Moreover, despite this general picture, LETS organisations are clearly diverse with a range of numbers of members, types of members, levels of activity, types and sizes of area covered, and types of organisation. This diversity will be explored in greater detail through comparison and analysis of other data collected during this and other projects.