Brent library privatisation hits the front page and two men named James disagree about what it means

The Kilburn Times (above) puts the possible privatisation of Brent libraries management on its front page.  Management would be handed over to a charitable trust although details are not clear.

The story was first covered on Wembley Matters on January 4th LINK (Will privatisation of Brent Council's  library management damage the service?)  and I published an extract from a blog by Alan Wylie, veteran library campaigner, who made these points about the leisure companies or trusts:

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.

The move, ostensibly, is to save £160,000 in rates (trusts get charged 80% rather than the 100% the Council will pay), although this is a loophole that may well be closed.

Margaret Bailey, chair of Friends of Kensal Rise Library, told the Kilburn Times that privatising services often ends up costing more:

Savings made on the 80% (rates) rebate will be minimal   and certainly not enough justification for privatising the service. I wish local authorities would fight these cuts together - and harness the support of their communities to do this.

 I agree.

Cllr James Denselow, now in charge of libraries under his Stronger Communities portfolio claims its a change in management structure, rather than privatisation and  'saves us a huge amount of money with rate changes'.  He recognised the sensitive nature of the changes and said the Council would do 'only if we find it's the right thing for us, for our libraries..and our communities.'

James Powney, whose blog has become a lot more interesting since he left the Council, wrote a article on the issue on Thursday morning LINK

Cllr Powney of course was the lead member when half of Brent's libraries were closed. He said that the wording of the officers' report ('established trust') suggests an existing body and the obvious one is that which currently runs Ealing and Harrow libraries:

The phrase "transfer management" suggests something more ambitious.  Not just founding a Trust but having the management taken over by a private company as in Greenwich or Hounslow.  This would be a lot more complicated.  A full procurement would need specification of a contract and a full tendering exercise for what would be a sizable contract.  In itself that would be a substantial one-off cost.  The Localism Act appears to have made this whole issue even more complicated than it was before.  The redundancy of senior management is likely to make the whole process even more difficult. 

This option was discussed when I was on the Executive, and rejected.  The business rate saving was largely a piece of accountancy smoke and mirrors (I understand that the rules may have been partly changed since then), and it seemed to me that all the things a private firm could do to cut costs could also be done by the Council.  Of course, having direct employees also gives you more control and we wanted to ensure the success of the Libraries Transformation Project by having hands on management.  Therefore we only went for the Sports Centre part of the project. 

The two James clearly have different perspectives and it will be interesting to see how this pans out. Meanwhile library staff are rightly concerned about what these vague proposals mean for them, their working conditions and their pensions.  The public should be concerned about what it will mean for the quality of their library service when the number of libraries has been halved and the council are proposing to cut the amount spent on book stock.

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."

LINK

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."

LINK

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

LINK

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.