Trusts: Pro

 

The main benefit in becoming a trust is that it is (apart from community interest companies), basically, a way of reducing outgoings.  Trusts do not pay Non-Domestic Rates and have VAT exclusions.  Trusts are also eligible to apply for more grants/funding than councils can.  More ideologically (and crucially in this time of unprecedented cuts), it is argued that Trusts, due to encouraging entrepreneurism, will provide more for less. The full list of advantages is:

  • Saving on non-domestic rates.  This can be a significant (c.25%) reduction in expense. This in two two types. “(1) Discretionary – up to 75% of any relief granted is charged to the national business rates ‘pool’, with the cost of the remaining 25% being met by the council (who will
    usually look to recover this from the trust). (2) Mandatory – up to 80% is available which is charged to the national business rates ‘pool’ (discretionary relief is available on the remaining 20%)” (Love Your Libraries).   

    • However, it is important to point out that Rates were set for a major reform in 2012, if carried out, will make this exemption significantly less attractive for councils.  It is also, of course, worth pointing out that such a reform has not occurred as yet thus increasing hopes that it will not happen (March 2013). Details are still uncertain as to what the reform, if it occurs, will be.  However the basic premise is that, currently, all Rates go to central government but in the new proposals, all rates will go straight back to the local council – meaning that a council will be effectively robbing itself of revenue if it spins off a service into a Trust.  Opposition in Cambridgeshire say this means moving libraries to a Trust is now a “closed book”. Durham said (May 2012) that they were delaying moving to a Trust until the Government announced the results of their review but then decided to go ahead (November 2012) suspecting that the benefit will just be halved and so still be worthwhile.
    • Having said that, recent Government advice is that ”The Government has been clear that its proposals will mean that there will be no changes to the way that business pay business rates, nor will there be any increase in the level of business rates. Similarly, it has confirmed that there will be no change in the system of reliefs, or the criteria for eligibility for such reliefs.” (email to author 6/2/12).
  • The Trust can say no – Councils can order library services, in the final analysis, to do things which the library service do not wish to do.  Librarians, as officers, have to obey what senior officers order, which may not be to the overall good of the service.  Being in a separate organisation means that the Library Trust can negotiate on more equal terms e.g. Suffolk IPS negotiation about moving the museum into Sudbury Library.
  • Anything which ensures libraries remain open and staff are employed is good.  Often the alternative is not between a council-run library and a trust-run library but rather one or none.
  • Reductions in pay, terms and conditions are not limited to trusts.  Many councils (notably through pensions, allowances but also through reductions for weekend working and other items like mileage claims) are doing the same thing.
  • It’s not just the avoidance of tax that can be beneficial.  Community Interest Companies are not generally eligible for the same tax breaks (although sometimes they are) but are a popular option due to their ability to use private enterprise options while retaining some guarantees for the council. CICs are also more transparent than private companies/trusts.
  • Trusts can concentrate entirely on the service and thus be more innovative, combining new thinking with commercial knowledge.  Councils have wide-ranging concerns and sometimes may see libraries as unimportant. In other words, Council staff will feel liberated from bureaucratic control and will release entrepreneurial spirit.

“Social enterprises are, however, offering much more than books and computer access – the mixed-use community hub, argues Dunn, is the library model for the next 30 years: “We’re open longer now than when the local council ran the libraries. I really believe that there’s a wider range of services that we offer from our libraries now… There are things that the local council do well, no question. But they are unable to move quickly and introduce new services quickly when the community asks for it.” The reason why social enterprises can, he says, “is that we are the local community – there is no them and us.” Eco Communties, quoted in the Guardian, April 2013.

“Ministers seem to view mutualism as some kind of magic formula that will improve services, cut costs, bring services closer to the user and extend the principles of civic involvement whilst simultaneously empowering former public sector workers and releasing their frustrated entrepreneurial spirit. None of these is seen as either problematic or potentially in conflict with one another.” (Mutual Benefit?)

“A social enterprise … [gives] … communities the power to deliver sustainable library services, creating a new kind of community resource that can help rebuild confidence, encourage social cohesion and contribute to local growth and well-being.  Too often in the past libraries have been perceived as being in communities but not of communities.  For neighbourhood libraries to survive they must become more central to the lives and needs of local people” (Libraries in Transition)

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