Privatized Libraries / Outsourcing library services

Six authorities have announced they are considering privatising their library services, at least in part - Cornwall, Croydon, Ealing, Wandsworth, Wokingham and Worcestershire.  Full details below. 

What do we mean by a privatized public library?

The American Library Association defines this as "Privatization is the shifting of library service from the public to the private sector through transference of library management and operations from a government agency to a commercial company".  However, critics of this line argue that, being the private company does not involve the transfer in ownership of assets, then really what is taking place is "outsourcing", not "privatisation".  The nomenclature is thus, as in so many things, politically loaded.  The word "privatisation" is, though, what most lay-people would understand the process to be and so it is used here, although with a nod to its imprecision.

The situation so far

Public libraries can be run by private companies on contract from the local authority.  Although there is currently only one privatised library service (Laing in Hounslow Libraries) in the UK, there are 18 such services (75 branches for 18 "clients" in six states) in the USA (Libraries Systems and Services, widely known as "LSSI", started its first public library contract in 1997 although it started as a company in 1981). Sweden has six outsourced branches in Stockholm while Civica operates some school libraries in Singapore and backroom tasks in Boroondara, Australia.  Integreon runs some specialist and legal libraries.  It is expected that more libraries will be considered for privatisation due to many authorities seeing privatisation as both ideologically and economically suited to their situation.  They will be encouraged in this regard by the financial and political views of the current government. Both Laing and LSSI have been bidding for contracts in the UK.
"The private sector in the U.K. is currently known to hold one contract, this being that operated by John Laing Integrated Services (JLIS) for Hounslow Council. The contract covers a range of leisure and cultural responsibilities, including leisure centres as well as libraries. The contract is in the third year of a fifteen year term and was let following the collapse of a Trust structure at Hounslow." Wandsworth council papers

Slightly differently, Slough Borough Council's library service is run by Essex County Council.  This is outsourcing, and the contract is presumably a commercial one, although it is interesting to note that this is generally not seen as a privatisation issue by campaigners and Slough boasts of improvements in its service.

LSSI

LSSI had expressed an interest in running 15% of the UK's Libraries within four years, although it  admitted (28.11.11) that it has had to scale back its ambitions. It is a family-run company (for instance it's executive chairman and it's press officer are related but it is worth noting that it is not family-owned) with a new chief executive whose background is in contract services.  Due to their role in the USA and to the recent relatively high profile of the company in the UK, much of the information in this article about private companies is about LSSI.  The company was established in 1981, based in Maryland and is majority-owned by Islington Capital Partners.  LSSI has just won it's first contract in Florida (30.12.11).  It has around $35 million in annual revenue and 800 employees (28.3.12).  It does not disclose its profits.

The company is still tiny in the UK, having currently no local authority contacts.  Indeed, the Express, reports that it is "operating from office space above a lettings agency in London and registered to a semi-detached home in suburban Liverpool. It was registered in the UK in 2008 with capital of £1,000 but is now shown on the Companies House register as a dormant company with the minimum £100 in its account."

The Canadian Union of Public Employees (CUPE) has written a seven page report on LSSI that is available here.   Although obviously from a biased source - trade unions hate LSSI - it contains extremely useful information, including on origins and political contributions, that is not available elsewhere.

The LSSI have put together an excellent summary for why they should be considered for British public libraries here.  

Legal issues 
There is no legal barrier to private companies running public libraries on behalf of a local council in the UK.  It does not constitute a contravention of the 1964 Act as long as the council merely subcontracts out the running to a private company rather than divesting itself of the service altogether.

Furthermore, it is worth noting that the Localism Bill, should it become law, will mean that privatisation will need to be considered as an option regardless of any council opposition to it. It contains a "right to challenge" for anyone who thinks they can run the service better.  Publicised as a chance for community groups to take over failing or inefficient services, in reality it may be private companies that use the legislation to force competitive tendering. Cllr Theo Blackwell of Camden Council has said that “we are in a slipstream of privatisation that will prove hard to stand up against. This bill is a one-way ticket towards privatisation. We would like to make a strong statement, ruling out private firms, but have been advised that when the new bill becomes law, this could actually be illegal.” .  The LGA calls the Localism Bill a "Centralism Bill" being it gives so many more powers to the Secretary of State including a direct power to interfere in the manager of local councils (e.g. by forcing the election of mayors) and in the way (not just the efficiency) of the way services are delivered.

The White Paper Open Public Services was launched on 10th July 2011.  This is widely seen as another highly pro-privatisation move by Government leading to comments such as "The Open Public Services agenda will almost certainly mean takeover of the Library Service by a private company" in open forums although remarkably no response as yet by any library organisation. 

Surprisingly, given its traditionally more free-market attitude, there is a significantly more comfortable playing field for privatisation of libraries in the UK than in some parts of the USA. California has recently passed a bill specifically to make it harder to privatise libraries.  It's key provisions are that councils must:

• pick a contract after a competitive bidding process.
• give four straight weeks of public notice before enacting a change, doubling the current requirement.
• prove through a broad analysis that a switch away from the free public library system saves the city or county money.
• show that the cost savings are not simply a factor of lower pay for the private company's employees.
• require an audit before hiring a library contractor charging more than $100,000 a year.
• ensure that the public employees don't lose their jobs.

The System Thinking Review argues that the following three warning signs are necessary to check on when  outsourcing services, which has been amended here to be more relevant to libraries:
  • Will the savings be made by "sweating the assets"?  That is, by not replacing the library counter/computer systems/furnishings/books as much as before.  This leads to a less attractive library, less attractive stock, more out of order machines and ultimately less usage.
  • Will the savings be made by "sweating the staff"?  That is, will staff  be paid less, be worked beyond efficient levels (overworked), replaced with less qualified staff, etc.  This leads to a less satisfactory customer experience and thus less usage.
  • Will the contract simply be based on number of transactions? "The number of times something happens is a terrible way to either assess quality or pay a contract. It is one-dimensional.". Will improvement be made only by paying the company more money?  Will be there be more complaints?
"It's almost science fiction to think that as a society, we'd start to privatize things like libraries and fire departments," said Assemblyman Das Williams, D-Santa Barbara, the author of the bill, whose district includes Ventura and much of Oxnard. "These are things set up to be the commonwealth of a community." Ventura County Star, 9/9/11

However, as is natural in a country with such polarised politics as the USA, this legislation does have its critics.

 UK councils considering library privatisation

Wokingham

Some councils have seen privatisation as a way out of the difficulties of the current financial situation.   Richard Alexander, libraries and information manager, Wokingham, which has announced that its libraries may be privatised from 2012, has said "we continually see news concerning library closures in the press and on TV, but it is a different story altogether here in Wokingham. We are pleased the council's decision-making executive will consider these proposals next week which would, we believe, help secure the continued future of the community's library service, and enable us to undertake improvements we would otherwise struggle to achieve.".  Wokingham is not definitely going to privatise its libraries but rather is asking all interested parties to tender for the job:
"What we have agreed is to use a European process called “Competitive Dialogue”. What this is is to ask interested parties to suggest ways of improving our library service within a given framework (including libraries cannot close). At the end of the response period the replies will be analysed and used to produce 2 key documents 1) Requirements Specification and 2) Business Case. Those documents will be reviewed and if not acceptable by the Executive then nothing will change. If they are then, and only then, will the normal tendering process start with a view to outsourcing the operation only (i.e. all assets will be retained by the Council)." Cllr Keith Baker, Executive Member for Transport, Wokingham (email to PLN 16 June 2011)
"Competitive Dialogue" is used for the "award of complex contracts, where there is a need for contracting authorities to discuss all aspects of the proposed contract with candidates" (OGC Guidance).  Barnet UNISON has produced some guidelines on how to proceed with this system.

The decision by Wokingham Council to outsource its libraries led to a 2300 name petition that forced the first ever petition-caused council debate there in history.  During that debate, the controlling Conservatives accused the Lib Dems (who backed the petition) of scaremongering, denied that it was privatising services and said that the petition was causing unnecessary worry to library staff, who the Lib Dems suggest would bear the brunt of the expected 10% cut in budget (plus, presumably, the extra cut caused by the unspecified profit for private company concerned). It was decided to continue with the outsourcing policy.

Further, in February 2012, the Council moved closer to privatisation for a five year term when they "voted in favour yesterday of moving to the tendering stage of the process after more than 20 companies submitted bids in June last year to take control."

Croydon and Wandsworth

Two other London councils, Croydon and Wandsworth, are considering a joint tendering of their library services to a private company.  The tests that Croydon consider important for the tendering process in their council paper on the subject are important enough to quote in full:

• Seeking to achieve good value for money
• Ensuring a competitive process
• Ensuring non-discrimination, with fair and transparent procedures, and
equal treatment of all potential suppliers
• Encouraging and ensuring continuous improvement in the delivery of
Council services through the application of value for money principles
• Incorporating effective and best practice procedures
• With clarity recognizing the need for clear and understandable rules
• Minimising risks and to protect the Council’s interests and reputation
• Ensuring controls and accountability, and always acting within the law
• Responsive to any weaknesses identified by internal/external audit
• Ensuring that regulations reflect the current procurement environment
• Supporting the delivery of direct services
• Setting out regulations which everyone complies with.

A highly pro-privatisation piece has been written by Wandsworth's deputy leader for the Guardian.   In this, he appears to suggest that all London's libraries should be privatised.  He also makes clear that the successful bidder will run both council's library services in tandem.

Civica has withdrawn from privatization tender, allowing in-house bid from Wandsworth Council to be reconsidered (21/5/12).

Others

Cornwall is considering jointly paying for libraries with "health organisations and the private sector", although the report categorically denies this is privatisation. Worcestershire and Kent are also considering privatisation along with every other option, including workers' co-operatives, Trusts and volunteers. Ealing has announced in a committee paper that it is considering privatising/outsourcing as it considers the Trust route is too dangerous due to likely changes to the charitable relief. Southampton is considering privatising/outsourcing all of its services by 2015, including libraries.  Oxfordshire are ruling out using LSSI in the short term due to their lack of UK experience but "the option could be revisited in the future".

Suffolk was considering options up to and including privatisation, although it has now decided to outsource its services to an Industrial and Provident Society (see page on Trusts) rather than outright takeover by an external private company
Pro
  • LSSI are also positive about putting in services which will generate income such as cafes, bookstores and IT, although of course many council-run library services already charge for these.
“We are very much aware of the depth of feeling for libraries and share that. We love libraries and that is why we are in this business. Libraries are what we do. Our business depends on getting our service right in every branch, every day.” Stuart Fitzgerald, Vice President LSSI (UK)
  • Although it has denigrated some of the working practises ("slacks and trainers") of librarians and reduces employment costs (pensions, salary, etc)  by around 15% compared to US state librarie, LSSI does continue to employ 100 qualified librarians in USA.  Riverside County (USA) expanded opening hours and bookfund/usage while cutting costs. LSSI also report that library usage increases when they take over a contract as they give the public what they want. LSSI CEO Frank Pezzanite was quoted last September in the New York Times, talking about "a lot of libraries" as saying "their policies are all about job security... You can go to a library for 35 years and never have to do anything and then have your retirement…You come to us, you're going to have to work." 
  • Private library companies will need to ensure that they continue to provide an effective service or they will lose the contract at the end of their fixed term, normally  three or five years.  Also, being there are at least two companies competing in the UK, there is competition even if the authorising council remains wedded to the concept of private enterprise running the service.  LSSI say their standards need to be high as USA councils give them annual contracts, meaning if they fail to succeed, they lose business. 
  • Expectations are very high of the improvement to be gained by privatisation.  In the case of Wokingham, the council expects the move to make a saving of £170,000 per year as well as ensuring no libraries close, that services and usage will be boosted and, presumably, there will be a worthwhile profit for the company involved.

“The alternative is libraries closing so we have to consider what they are offering,” cautions Mark Smith, chair of Norbury Green Residents Association which has fought a vigorous campaign to save its library run by Croydon Council. “It is a very divisive subject and feelings run high but our position is, if we can keep the library open and meet standards on staffing and service, let’s see what it brings. We have fantastic library staff who know most people by name and they may not stay. That is a big concern because their presence makes the library what it is, just as much as the books and the building do. We want to protect them but, ultimately, we are fighting to keep the library open. If we were in one of the nearby London boroughs, the library would have been closed and everything would have gone.” Sunday Express.


Con



Many people have a deep-rooted suspicion of the private sector using libraries.  While this may in some cases be merely prejudice (in the same way that those who consider the private sector as more efficient than the public sector are also prejudiced) there are many arguments to support the view that public libraries should remain under the control of local councils.  The anti-privatisation argument has much in common with a similar dislike in the state education/user sector for private companies entering their sphere.
  • Private companies cost more.  A well-run council can do everything a private company can do and avoid giving 5 to 15% of their money into profit to that company.
"...private contractors cost more in 33 of those 35 jobs. On average, the service contracts paid private employees 83 percent more than the government would pay a federal employee doing the same job (and that’s even taking into account health care benefits, pensions, and so on). There’s a long debate about whether workers in the private sector actually make less than their federal counterparts, but it turns out this is all beside the point. The POGO analysis found that private contractors working with the government make, on average, twice as much as a comparable private-sector worker." (Review of contracts in USA)
  • Private companies by definition aim to make a profit from the local authority.  This money goes to the company's owners and not to the council/users.  The suspicion is that the much-criticised high pay given to council managers would be perfectly acceptable if given to private company managers. Unlike in traditionally private sector trades, library companies do not take over any risk from the council and are in a "no lose" situation.
  • Private company are effectively given a no-risk monopoly in a given location. In this context, it worth pointing out that there are serious doubts in the USA as to if private public libraries deliver.  The "Show me the Money" report suggests that usage actually declines in privately run libraries and they can end up costing more.
  • Private public libraries are an intrinsic contradiction in terms. The basis of a private company is to make the most money from a good or service for their shareholders.  The basis of a public library is not to charge for its core good (book loans) and services (public space, librarian support).  In the furtherance of this argument, public services such as libraries are seen by many as being best under public control.  Privatising them (and thus taking them out of public ownership, albeit temporarily) undermines their purpose and reduces council/public influence over the service. 
"However, any private company to come in on a contract with the council would be looking to make a profit and if it hasn’t the control to close libraries then it will look for other ways to save money. This, I suspect, will mean reducing opening hours, increasing fines and fees and cutting staff wages or staff themselves. Any of these would result in an inferior service. If a company finds that a profit is impossible to make, it will walk away from the contract, leaving the council with an extra financial burden to take over it again.”  Henley Standard, 5th December 2011.

  • Libraries will lose both their unique selling point and their equally important neutrality.  Privatisation means that public libraries may become another commercial space in the High Street.  This argument is explored in some detail in this 2010 article.
  • Private companies reduce the numbers, pension, terms and conditions of its employees. When taking over a service, LSSI re-employs staff on new contracts.  Recent research shows it retains the minimum of qualified library staff.  It is worth noting that, for its size, 100 "qualified" staff it promotes as being employed by the company is fairly low when compared to the industry standard. Also, there is the question as to what level these staff are qualified to.  It appears that LSSI de-unionises its libraries in the USA.  "Lower salaries, paraprofessionals instead of librarians with master’s degrees, reduced benefits and a heavy reliance on volunteers for work and for fundraising is the consensus in a series of community reports." (Toronto News).  Having said that, one should point out that reducing library worker pay, if allied to no overall decrease in service quality, would be a strong positive for any council - although it is a hard ask.
"The number of professional librarians at Santa Clarita has been reduced from 14 to nine. Overall, LSSI has budgeted for 59 positions, or about 48-50 FTEs for the three branches, compared to the 99 positions that the county had budgeted for in FY10, or about 60 FTEs... The library workforce is no longer represented by a union... Ebook availability is more constrained under the new system...when asked to disclose salaries, for example, the company declined to release any information..." (Library Journal, 26/7/11)
    • US contracts appear to be written in favour of LSSI. There is a lack of legal definition of what a well-run library is and what it provides. LSSI oversees its own contract with the authority.
    • Public libraries increasingly run events/coffee shops etc inside them and do not recognise the "slacks and trainers" stereotype that LSSI suggests.  
    • There is also some disquiet, unarguably present regardless about what one thinks of its trace of xenophobia, about an American company taking over a British local government service.  Politically, this would seem to be the opposite of "localism" that is promoted in Government as there will be a loss of local community control.  The experience of LSSI in the USA is that they are deeply unpopular with library workers, unions and at least a significant portion of the public. So unpopular in fact that Californian legislation is currently being introduced to prevent privatisation without a public vote.

    • Privately run libraries will seek to charge as much as possible for their services, making social mobility more difficult - "Information is the key to social mobility. By privatizing public libraries, we are putting this key in the hands of companies whose raison d’être is to seek to monetize the right to information. Growth is imperative to a private company – the only way this can be achieved in the case of a public service like libraries would be to maximize revenue and minimize the service provided. Information is too important a resource to allow it to be reduced to a simple matter of profit. Lack of freely available information and advice would deal a serious blow to our democracy. Free access to information allows people to make informed choices. A well-functioning democracy needs well-informed citizens. So information must remain free and highly accessible. Information should not be allowed to become a mere commodity to be traded. Access to knowledge should be a right for every citizen regardless of their ability to pay." Towards a 21st Century Library. 
    • Allied to this argument is the one that Libraries are the last public space.  All of the other shops in town are there to make money.  The library expects no monetary return from its clientele and, indeed, lowers charges for those on lower income and often waives charges.  Private companies will seek to maximise return from their asset and thus further alienate the less-prosperous sectors of the community - “those who serve the disenfranchised all bow down at the altar of profit when managed by private companies".  Although, it is fair to say, employees of privatised public libraries dispute this.

    • LSSI has a poor record in the USA.  "In Santa Clarita, public officials made the decision to privatize their city libraries despite a public outcry from community members who wanted to maintain public control over their precious investments. So far, that city's taxpayers have had to cough up $12 million in extra expenses for a privatization scheme they were told would save them money. Other communities have seen experienced librarians replaced with less qualified staff and hours reduced. Elsewhere in the nation, the Linden, N.J., library terminated its contract with LSSI after determining the town could offer the same level of services for $300,000 less. Fargo, N.D., also terminated LSSI's contract after the company repeatedly requested budget increases and failed to pay bills on time." ((Molly Spore-Alhadef in Mercury News, USA)

    • Friends groups may withdraw support as may other groups.  Volunteers and other supporters may choose to cease support for a service whose primary aim is to make a profit for its shareholders.
    "I categorically do not believe that private providers are inherently better than public sector providers, and I would not support an approach to reform that implied that they were...I will take a hard line, too, against any attempts to replicate the mistake of skewing the market against public-sector providers." (Nick Clegg)
    "When I go into a library, I don’t have to worry about who is holding whose copyrights, why this book didn’t sell enough to continue to be available in any marketplace, how many other stories there are out there that I am missing because the storytellers don’t have the money or the property rights to tell them. In the library, I am in a space beyond the marketplace, beyond consumption, beyond the money censors, beyond the noise. I am in a place where librarians have accumulated the knowledge and the stories important to me and my community." Jeff Chang on Libraries and "Our Collective Imagination" - Racialicious (USA).
    "The greedy ghost understands profit all right. But that's all he understands. What he doesn't understand is enterprises that don't make a profit, because they're not set up to do that but to do something different. He doesn't understand libraries at all, for instance. That branch - how much money did it make last year? Why aren't you charging higher fines? Why don't you charge for library cards? Why don't you charge for every catalogue search? Reserving books - you should charge a lot more for that. Those bookshelves over there - what's on them? Philosophy? And how many people looked at them last week? Three? Empty those shelves and fill them up with celebrity memoirs. That's all the greedy ghost thinks libraries are for..." Philip Pullman
      Further reading

      Much of the evidence for this article comes from "Show me the money: Privatisation and the public library". See the blog "Stop the privatisation of UK public libraries" for comprehensive, if obviously partisan, coverage of the issue.  For similarly partisan - but this time American - coverage see Privatization Beast.

      UNISON have produced a report on The Rise of the Public Services Industry which gives a general overview and is impressively up to date, mentioning the proposed  privatisation of Wokingham.  However, it has only one paragraph on libraries.

      The American Library Association (ALA) have produced the report Keeping Public Libraries Public (June 2011) in response to the growing concern over privatising public libraries.  The report itself is not without its critics though - see The Annoyed Librarian. 

      American Libraries have produced an interesting survey Who's the Boss about librarian attitudes to privatisation that has been accused of innate bias towards LSSI (for example,"When asked to choose between two options—whether public library management should remain in the public sector to avoid a focus on profit or whether management should be privatized if it means providing better services at lower costs [my italics] —a full 87% of survey respondents agreed with the former.").

      Toronto in Canada is wishing to privatise its libraries, leading to the formation of the Our Public Library campaign website.  A thorough viewpoint from the Toronto Star on privatisation is Would privatizing Toronto's libraries really save money?
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