Is it time for time banking?

Last week I was involved in some Cabinet Office-sponsored discussions about a time banking project being introduced to a local authority area. The idea is to introduce a system to incentivise people to provide low level, good neighbour type support. It would involve helping people to connect with each other and then turning people’s support into credits, which they could use to access council services or leisure activities. In the example that was worked through in the proposal, a young person (‘Jonny’) helps out an older woman with her shopping. The lady has paper credits to give him in return and there is a rating system which lets people know how highly Jonny is regarded by the people he helps. Jonny takes his credits to his local youth club and they are exchanged for something with value (bowling in this case).

This is all very Big Society. Incentivising larger numbers of people to help out older and isolated people at low cost is a very attractive idea in a time of stiff budget cuts.

Timebanking is an elegant idea that should be everywhere, but somehow isn’t. Why?

One challenge for timebanking and the use of complementary currencies is the paradox that, by valuing something that someone does for mainly altruistic reasons, you risk devaluing it. When we help someone out, we want to feel good about having done so. Money is a very poor substitute for this feeling and can actively undermine it. In the ‘70s, Carer’s Allowance was introduced as a benefit for unpaid family carers. It has only ever been a small amount: its purpose was not to replace carers’ lost income or to compensate them for all the hardship that an intensive long-term caring role can bring, but specifically to provide recognition and a sense of being valued. Surveys of unpaid family carers consistently show that the low value of Carer’s Allowance is one of the aspects of caring that makes people most angry. Carers translate the £50 odd quid a week into an hourly rate and feel massively undervalued. Many carers argue that we should increase the allowance until it represents a decent hourly rate. This will never happen: the cost would be up to £80bn a year. But if it did happen, what would it do to our relationships with our family and friends? And would carers, who often sacrifice much more than money to a caring role, feel properly valued because of it?

At a carers’ conference in Ireland, carers were just as angry about the equivalent carers’ benefit, which was twice as much as the UK rate. In fact, when the amount you get paid for helping someone increases, you might feel better about your finances, but less like you’ve been recognised as doing good. GPs, who do a demanding and essential job which helps others, appear in surveys to feel more and more unhappy and undervalued, despite being paid increasingly vast amounts.

So to my mind, the risk with the time banking proposal I was reading, was that Jonny was essentially going to get paid for his help, but via a complicated route with a high transaction cost. The risk being that Jonny can think of easier ways to earn enough to go bowling and that the transaction will feel to him similar to being paid, just not being paid very much. Whilst the local bowling alley might be persuaded to give the council a discount for bulk-buying bowling sessions, that discount is unlikely to be more than the cost of setting up the systems needed to match Jonny with the elderly lady, supply her with credits to give to Jonny, negotiate the offers behind the credits and turn Jonny’s credits back, essentially, into cash. A council with money in their budgets to be able to fund something like this, might just be better off paying Jonny and cutting out the transaction costs.

When I’ve talked to people who are involved in a time banking system, they have been in relatively affluent areas of London with high concentrations of like-minded people with interesting things to offer. Bike maintenance has been traded for language tuition and so on.

To make time banking universal, and useful for people who need help but can’t mend your bike in return, credits which are put into the system need to be worth more than money, but cost less than money to produce. This means they have to offer rewards on which you cannot put a cash value or that are not easily available through another route. Rewards that enhance the feel-good feeling rather than undermine it. This could be about people’s help being celebrated at invite-only events, or people getting more of a say in relevant local decisions (which would be controversial with those who pay taxes but have little free time), or about boosting someone’s CV. Discounts of the kind offered by store loyalty cards could help, providing the businesses in question can be persuaded to participate for the publicity, rather than at a commercial rate. That kind of deal would require a nationally recognised complementary currency of course, something which this avowedly hyper-localist government may be reluctant to do.

It is possible to combine paid and unpaid elements of care: Shared Lives is a good example of this working. Shared Lives carers are paid. They don’t get very much and in some cases can feel exploited, but I’ve never met a more motivated group of people. They never clock off and give far more support and care than a professional contracted by the hour could. One Shared Lives carer told me she thought the money wasn’t enough but wouldn’t want it increased, because that was what, in her view, had ‘ruined’ foster caring: people started getting into it just for the money, she felt, whereas you’d have to be very poor at maths to get into Shared Lives for purely financial reasons. Lots of Shared Lives carers feel that the respite they are provided with is not enough, but there are also lots who have to be cajoled into taking their full allowance.

Whenever you introduce an incentive into the care system (or any system) you almost inevitably also introduce a perverse incentive. Time banking and complementary currencies surely have a role to play in motivating some people to do more voluntary activity, but the test will be whether they can do so without demotivating others.

I’d be interested to hear your experiences of time banking and volunteering: which kinds of rewards make you feel valued when you do good, and which are counter-productive?

You may also be interested in Sian Lockwood’s blog on the gift economy.