COLIN C. WILLIAMS, Department of Geography, University of Leicester, Leicester LE1 7RH, Tel: 0116 252 5242

Work E-mail: [email protected]


LETS are formed where a group of people form an ascertain the potential of this novel means of monetary reform. Here, therefore, the results of a comprehensive three-year study funded by the UK government’s Economic and Social Research Council is rDuring the past few years, Local Exchange and Trading Schemes (LETS) have been widely advocated as a tool for creating a new economics. Up until now however, there has been little evidence to eported. This evaluated the impacts of LETS in tackling social exclusion and creating social cohesion. The finding is that although LETS are an effective vehicle for social exclusion, a lot remains to be done if these schemes are to benefit a wider range of people.

LETS are formed where a group of people form an association and create a local unit of exchange (e.g., ‘bobbins’ in Manchester, ‘solents’ in Southampton). Members then list their offers of, and requests for, goods and services in a directory that they exchange priced in the local unit of currency. The association keeps a record of the transactions by means of a system of cheques written in the local LETS units. Every time a transaction is made, these cheques are sent to the treasurer who works in a similar manner to a bank sending out regular statements of account to the members. No actual cash is issued since all transactions are by cheque and no interest is charged or paid. Credit is freely available and interest-free.


To evaluate the contributions of LETS to tackling social exclusion, three methods were adopted. First, a national survey of all 303 LETS co-ordinators was conducted (with a 37% response rate). Second, a postal questionnaire was sent out to 2,515 members of LETS (with a 34% response rate) and finally, in-depth action-oriented research was conducted for six month periods in two localities: Stroud and Brixton, including 200 interviews with non-members, 78 in-depth interviews and 13 focus groups.

The 303 LETS operating in the UK have 21,800 members who sold goods and services to each other in 1999 worth the equivalent of £1.4 million using local currencies. This might seem an insignificant amount. For the people involved however, LETS have a considerable impact on their lives.

Examining who joins LETS, the finding is that it is people who would otherwise have relatively thin and narrow social support networks. Some 62% are not employed, a group previously identified as possessing thin social networks (e.g., Morris, 1995). Moreover, most LETS members lack kinship networks. Some 95.3% had no grandparents living in the area, 79.5% no parents, 84.3% no brothers or sisters, 58.2% no children, 92.6% no uncles or aunts and 90.8% no cousins. Given that kin are the principal source of mutual aid in contemporary society (e.g., Williams and Windebank, 2001), the result is that many members are those without others to call upon for help.

Turning to why they join, 25.2% do so for ideological purposes. LETS for them are ‘expressive communities’: acts of political protest and resistance to the ‘mainstream’ where ideals can be put into practice (Hetherington, 1998). A further 2.5% join explicitly to improve their employability. The remaining 72.3% join to bolster their social support networks. For 22.9%, the reason is ‘social’ in that they wish to meet people and build a sense of community. For the remaining 49.4% of members, the reason is more ‘economic’ reasons such as to exchange goods and services (20.1%), overcome their lack of money (12.2%), use skills (1.1%) and receive a specific service (8.8%).

What, therefore, are the impacts of LETS? For 5% of members, the LETS had helped them gain formal employment and a further 10.7% asserted that LETS had been a useful seedbed for developing self-employed business ventures. For most members however, it was the ability of LETS to build support networks that was most important. Some 75% of respondents (82% of the registered unemployed) said LETS had helped them to develop a network of people upon whom they could call for help, 55% that it had helped them develop a wider network of friends (68% of the registered unemployed) and 30% deeper friendships. LETS thus expand the breadth of social support networks that can be drawn upon as a resource. For 64.5% of the registered unemployed, this had helped them cope with unemployment.

In sum, for most who join, LETS provide an alternative means of coping by bolstering their support networks. Given that LETS thus appear effective vehicles for tackling social exclusion, the question that needs to be addressed is why so few people have joined them and why the level of activity on LETS is so low.


There are five consecutive hurdles that anybody wishing to join and participate in LETS has to overcome, and which need to be tackled if LETS are to be more widely used as a tool for promoting social cohesion.

Does a LETS exist?

The finding of this survey was that LETS currently cover just 15% of the land area of the UK. For many, the main barrier to participation in LETS is thus that one does not exist.

Does the population know about LETS?

In major part, this is due to how LETS advertise themselves. `Word-of-mouth’ is the principal marketing device for 64% of LETS because it costs nothing. Other methods cost sterling money that these voluntary groups do not possess. Indeed, only 7% of all If one exists, the next hurdle is whether people know about it. A large share of the population does not. Asking people in Stroud, a relatively small tight-knit town that possesses one of the longest-standing and largest LETS in the UK (which even has a high street presence), 51% of those surveyed had never heard of LETS. This is comparatively high when compared with the London borough of Brixton, which is perhaps more representative, where 92.1% of the population had never come across LETS.

LETS had received financial support to help with publicity.

Do people think that it is something for them?

If one exists and people know about it, the next question is whether they feel it is something for them. Two-thirds (67%) of people surveyed thought that it was not. First, this is because they were either ‘money rich but time poor’ or had extensive kinship networks that substituted for LETS. Second, however, it is because they either feared having their social benefits curtailed (dealt with below), perceived LETS as something for people other than them or their illiteracy prevented them using LETS cheques.

Those who saw LETS as something for people other than them had read newspaper articles about how it was a ‘green thing’. They thus did not think that they would fit in. Indeed, our survey showed that this was to some extent correct. Some 48% of LETS members support the Green Party. This membership profile however, has arisen due to the way in which LETS emerged out of green thinking and has had to rely on ‘word-of-mouth’ marketing due to a lack of funding being available. The result has been intransigence in the membership profile.

Recognition of how this advertising and recruitment practice leads to other social groups not joining is the first step in resolving this problem. The next is to adopt marketing practices that resonate with particular groups (e.g., choosing appropriate locations for trading and social events, designing targeted promotional material). To achieve this, most LETS require two forms of aid. First, they need help to start up, such as in the form of the provision of a hall to launch the scheme, or money to purchase a computer, produce advertising leaflets and a directory of the goods and services on offer. Second, there are on-going costs in the form of advertising and up-dates of the directory and this often requires little more than access to photocopying facilities. The impacts of such aid however, can be significant. LETS that had received such financial support had more representative membership profiles and the average level of trade per member was 27% higher than in non-funded LETS.

Do people think that they have something to contribute?

If one exists, people know about it and feel that it is something for them they may still abstain. This is because they do not perceive themselves as having anything to contribute that others might want. This came across strongly in our interviews with non-members. For instance, the elderly, unemployed and disabled felt that they could do little. At the advertising stage, therefore, concrete examples are needed not only of what people can get on LETS but also what they can contribute.

Do people think that they are allowed to participate in LETS?

If all these barriers to joining and participating are overcome, the lack of clarity by central government over how LETS earnings will be treated will then need to be resolved, especially with regard to the registered unemployed. 65% of registered unemployed members are fearful of the benefit authorities and nearly all those who claim benefits and do not currently belong to LETS. This is because the DSS have refused to provide clear regulations regarding how LETS earnings are to be treated. Consequently, this research endorses the current policy proposal of the Social Exclusion Unit (2000: key idea 4) that proposes a pilot study to give ‘people new freedom to earn a little casual income or participate in a Local Exchange and Trading Scheme (LETS) without affecting their benefit entitlement’.


In sum, this study reveals that LETS are effective in rebuilding support networks. However, significant barriers remain that prevent a wider proportion of the population from participating. LETS currently only cover a minor area of the UK, most people have never heard of them, many who would benefit from LETS see them as something for people other than them, they have little idea what they could contribute and the unemployed in particular fear how central government will react to their activity. To tackle these barriers, LETS need to be developed where they do not exist, awareness of their existence needs to be raised, they need to be developed and promoted in inclusive rather than exclusive ways, people need to be helped to recognise their skills and talents and last but not least, central governmental regulations need to be addressed.


This research was funded by the Economic and Social Research Council (ESRC) (Ref.: 000237208). We are grateful to all who participated in this research, especially the co-ordinators and members of Stroud and Brixton LETS, for their co-operation and the many individual respondents for their critical but constructive participation in the project.


Hetherington, K. (1998). Expressions of Identity. London: Sage.

Morris, L. (1995). Social divisions: economic decline and social structural change. London: UCL Press.

North, P. (1999). Explorations in heterotopia: LETS and the micropolitics of money and livelihood. Environment and Planning D, 17, 69-86.

Social Exclusion Unit (2000) National Strategy for Neighbourhood Renewal: a framework for consultation, London: The Stationary Office.

Williams, C.C. and Windebank, J. (2001). Beyond social inclusion through employment: harnessing mutual aid as a complementary social inclusion policy. Policy and Politics, 29, 15-28.



© [email protected]

March 2001