Sunday 4 January 2015

Will privatisation of Brent Council's Library Management damage the service?

There are so many proposals to cut and out-source services under consideration by Brent Council that it is all too easy to miss some important issues.

Labour Brent Council has closed six of the borough's 12 libraries. Now, as well as proposing to cut the amount spent on library stock the Council is also considering out-sourcing the management of the library service as a way of saving on rates. This is the proposal (ENS18) in the documentation that went to Cabinet last month LINK

To change the management of the library service to a trust arrangement. The exact arrangement will need to be determined. Within London, five authorities deliver their services in conjunction with other authorities, one delivers through a charitable trust established by the Council which also delivers other services such as leisure centres and seven have outsourced delivery to a social enterprise or a private sector provider. Elsewhere in the country, some library services have been outsourced to a staff-managed mutual or social enterprise, and larger library services have been commissioned to run smaller ones.  Charitable organisations are eligible for an 80% rebate on NNDR. Changes to rules on business rates in 2013 mean that 70% of the cost of this rebate is borne by Central Government with the remainder being covered by the local authority. Therefore the saving to the Council on business rates of transferring a library service to the charitable sector is 56% of the total rates bill - in Brent this amounts to a saving of approximately £160K. The exact level of savings would depend on the tenders received.
It will take approximately 12 months to complete this work and switch to a new management arrangement.
How would this affect users of this service?
There would have to be public consultation and a full impact assessment before proceeding.
There would be no direct impact on service users as there will be no reduction or significant change in service levels or quality.
The  last bullet point is likely to be challenged during the consultation. On his blog  LINK Public Libraries campaigner and member of Voices for the Library, Alan Wylie, explored the issue:
Only a year after being awarded the accolade of the 2017 'City of Culture' Hull City Council are proposing to set up a "leisure company" to take over the running of their leisure facilities, libraries, museums, park ranger and catering services. Now one thing strikes me straight away about this; why are libraries part of the bundle, after all they are statutory and they aren't in my opinion solely a leisure service? 

The answer to the above question probably lies in the fact that most councils place their library services in 'Culure & Leisure' directorates, that someone including the LGA has been perpetrating the myth that libraries are non-statutory, that we have a government and a Secretary of State who fail to intervene to stop library cuts and closures and that we have a chasm in the leadership and promotion of the national service. Libraries have become easy to offload.

So what is a 'leisure company' or 'leisure trust' and what are some of the issues with this model of privatisation?

"What a Leisure Trust means in practice:
  • Leisure services are outsourced to a separate organisation/company. 
  • The Council retains ownership of the facilities, which are leased to the Trust.
  • Virtually all the savings come from rate reductions and VAT savings, which are much smaller initially because of the high set up costs. 
  • Direct democratic control of the service will cease - elected member representation on a trust is limited to less than 20% of the board.
  • Company law requires that Board members must put the interests of the leisure trust before those of the local authority. 
  • After a year the Trust will usually cease to use council services and will be responsible its own procurement and contracting or corporate and other services."

Unison Scotland have also raised concerns;

"UNISON is concerned that large sections of public service delivery are being shifted off to arms length bodies with very little research into the effectiveness of such change."


Recently in Renfrewshire there have been protests against plans to pass the running of similar services to Renfrewshire Leisure Limited (RLL).

And there are similar plans being proposed by Angus Council and Unison have yet again raised concerns; LINK
 “Unison is not convinced that farming out leisure facilities to arm’s-length trusts improves the service for the public or the staff.

“They are not an alternative means of community ownership of public assets. In fact the policy tends to be used to save local authorities tax.
“Our experience so far is some trusts perform satisfactorily after the initial separation but the promised savings, extra funding and other benefits tend not to materialise. 

“There is no evidence the public see an improvement in the service nor will the trust see a higher rate of private donations, which are often the reasons put forward.”

For more on leisure trusts see LINK
I hope that the Scrutiny Committee and Unison will look at some of these issues in detail and make representations before the Council adopts a move that has the disadvantages outlined above.


Anonymous said...

The issue will have to be fought on the financial aspects, I fear. Nothing else carries any meaning for the current national barbarians and their self-serving, self-preserving little local helpers.

Anonymous said...

Is Ben Spinks post been deleted.

From my understanding Ben Spinks was drafted in to develop the ideas of spinning out services into mutuals ?

Martin Francis said...

As far as I know consultations on the senior management restructure are still going on. It was proposed to delete the post but the Corporate Risk Register is quite strong on the risks involved in terms of the department's responsibilities.

Anonymous said...

If the main purpose is to transfer rates costs to Central Government, sooner of later Central Government will notice and change the regulations to send the costs back to local councils.

Anonymous said...

Hey. Cutting the tax that the local authority is hemorrhaging to the government is not such a bad idea. Although, it is possible for the government to change the rules again and move the current 70-30 split to 50-50. What then?
Also it's not clear how much setting up and running the Trust will cost (one-off and ongoing).
If those costs can't be counted as savings, I guess there isn't really £160k of savings in the proposal.
Final point, don't forget that attached to this, there is a very innocent £100k cut to the books!
I hope the council rejects both.