Most people are joking when they suggest printing your own money if your bank balance is looking a bit sorry, but that's exactly what several local communities have decided to do. While the Government struggles to stimulate the floundering economy, neighbours who want to take matters into their own hands can set up their own currency in a bid to improve local trade.
In a similar vein, skill-swapping allows communities to work closer together and takes them further away from the big banks. The ethical angle to both is certainly appealing, but are they simply gimmicks, or a genuine way to give local economies a boost?
Bristol is the latest area to launch a local pound but others have gone before, starting in 2007 with Totnes in Devon, followed by Lewes in East Sussex, Stroud in Gloucestershire and Brixton in London. As with the others, the Bristol pound has a one-to-one exchange rate with sterling and consumers can shop in any of the 300 or so independent retailers signed up to the scheme.
The idea is simple – money stays within the area and away from faceless corporations. So when you shop with your Bristol pounds the retailer then has to buy locally too – or pay the 3 per cent fee to convert them back into sterling. Consumers can open a Bristol pounds account via the Bristol Credit Union, which is administrating the entire scheme, and receive a 5 per cent bonus when paying into their account (limited to the first £100,000 of all deposits). In Brixton, the bonus is set at 10 per cent, so £10 in sterling is worth £11 in Brixton pounds.
"Not only are you are making a commitment to support small businesses but you're also investing directly with the credit union," says Josh Ryan-Collins, a senior researcher at the New Economics Foundation think tank. "It's pushing people towards more ethical and more sustainable forms of local banking."
Today more than ever, the idea of moving away from a centralised banking industry is appealing to many people. Bristol also has scale on its side as the first citywide scheme in the UK, but the success of any local currency is dependent on circulation. These notes are not legal tender and there is therefore no obligation for shops to accept them. The big concern is that this could simply be a temporary fad for consumers, and retailers may fear being lumbered with a stack of cash in a currency they can only use in other local shops, forcing them to exchange back into sterling and lose money.
There are some important differences to note between the various schemes. First, in Bristol and Brixton the local currency can be exchanged electronically, which is convenient for consumers and cheaper than credit cards for businesses – high transaction costs have been a big challenge for paper-only schemes. The other big innovation is that both Bristol City Council and Lambeth Council (for Brixton) allow participating businesses to use the local currency to pay their business rates, which goes a long way to alleviate concerns regarding re-spending the currency.
Both councils are also moving towards paying their staff with the local currency so that they act as a clearing house, creating demand and pushing it into circulation.
Jasmine Birtles, a financial expert at Moneymagpie.com, says: "With the problems in the City, and particularly the euro crisis, a lot of people are thinking again about currencies and the value of the cash in their pocket. It's very interesting to see people creating their own currencies. It shows that we are thinking more deeply about what money really means and what its genuine worth is on a day-to-day practical basis."
Skill swapping is another community-led movement, this time with people trading their talents and services with each other instead of cash. One model is time-banking, where one hour of your time is worth one credit; the national umbrella organisation timebanking.org supports time banks all over the UK.
"The beauty of this is that whether you're a neuroscientist or an unemployed single mum, your time is valued equally," says Mr Ryan-Collins.
Spice (justaddspice.org) has taken this a step further by promoting "person-to-organisation" time banking. So an individual might donate their time to a school and can then spend the time credits they earn on activities and facilities within the school or in the local area – for example on spare seats at the cinema.
Local Exchange Trading Schemes have also been set up all over the UK and members can find a nearby scheme at letslinkuk.net, each with its own mutual credit or currency system. There are also a host of websites set up to make skill swapping a simple process, including favabank.co.uk, skillbound.com, skillsbox.com and the listings site gumtree.com.
"It's a trend that's become increasingly popular during the economic downturn, as many Brits look to get more for less," says Hamish Stone at Gumtree.com, which currently features more than 2,500 live ads offering skill swaps, in particular language tuition.
"If languages aren't your thing, there are lots of other skill swaps available too, including dancing lessons, music training or computer skills tuition, to name just a few," says Mr Stone. "We love this trend for social bartering – everyone's a winner!"