The role of complementary currencies and local shopping schemes in promoting the flow of money in local economies have generated real interest in recent years. As part of the Innovation in Giving Fund, Nesta is supporting nef and the Brixton Pound Community Interest Company (which runs the UK’s largest complementary local currency) to develop an innovative ‘Payroll local’ scheme in south London. Nick Webb, of Nesta, who works on the Fund spoke to Susan Steed, at nef, about the scheme . . .
Nick: Tell me about ‘Payroll Local’, the project you are developing with Nesta funding . . . what’s the innovation?
Susan: Payroll Local enables Lambeth Council staff to automatically receive some of their salary in Brixton Pounds (B£’s). They will get 10% bonus for the share they accept in B£ and this money will automatically be available through their phones. They can then either spend it or donate it to local charities.
We think this is innovative for several reasons. The first is the ‘Pay by text’ platform, the first in the UK. It’s really simple to use and means that even very small traders can take electronic payments (without needing to hire a credit card machine or pay a chunk of their takings to Visa). This means council staff can connect up with other local residents and pay from anything from a coffee to cat sitting by text. Secondly it’s a payroll giving scheme for very local charities – often larger charities are the only option on Payroll giving schemes. Thirdly, having a local council to use a local currency at this level is unprecedented.
Nick: How does the Brixton Pound differ from other local shopping schemes?
Susan: Currencies like the B£ are very different from conventional buy local schemes because they have a chain effect. Using the currency means businesses, as well as customers, are committing to understanding where they respend their money. This can make money change hands more quickly, speeding up the flow of money around an area and producing local economic well-being. In Brixton we have found that the currency accelerates the growth of new enterprises by fostering tighter connections between businesses their suppliers and customers all using the currency.
What’s interesting about the Payroll local project is that we’re also bringing local charities into the mix. This means as well as residents and businesses we are looking at ways that charities can use a local currency to both increase their donations and use these to support the local economy.
Nick: There has been a lot of recent press coverage on complementary currencies – what do we know so far about what makes them successful and sustainable?
Susan: I’d say one of the biggest threats is that people don’t give them enough of a shot. So, many complementary currencies (cc’s) are started by volunteers who loose energy and motivation. In practice the nature of starting a currency is that it takes time for people to recognize and trust that it has a value. Tying it in with local value chains is the key to long-term success and having the local business community and the council involved are invaluable assets.
CC’s are also often wrongly seen as a threat to sterling. People don’t know how to deal with them from an accounting side, for taxation and how they interact with benefits. In fact, far from trying to avoid tax, cc’s could be a key way to boost tax revenues or get more people involved in the delivery of public services.
In Brixton we’re delighted that businesses can now pay their business rates to Lambeth council in Brixton Pounds. We’re looking to build on this at nef with the roll out of Payroll Local with the council and also a wider European project ‘Community Currencies in Action’ which will address some of the administrative burdens to scale up the use of alternative currencies.
Nick: Do you have a favourite story of what B£ has been used for?!
Susan: It’s really exciting looking at the range of things you can spend Brixton Pounds on. We’re proud to be able to support a range of new and exciting local enterprises, and be able to promote them to businesses already in the scheme.
So, for example I was really chuffed to see pictures of vegetables being grown on an inner-city estate in the new Lambeth Poly tunnel, then being cut and bagged up and delivered the same day to a restaurant in Brixton, then paid for by text in Brixton Pounds.
I also can’t resist mentioning that you can also buy a share in locally produced energy from the roofs of the Loughborough estate in Brixton, you’ll also get your dividends paid in Brixton Pounds.