The final proposal on the Library strategy, Option B+, states that it will save Derby City Council £648,000 per year, by
- converting 10 of the 15 libraries into Community ( Volunteer) managed libraries (CML),
- moving the Central Library to the Council Offices ( Riverside library)
- reducing the Central library footprint by about 50%.
- increasing opening hours for the Council run libraries
There are many significant flaws with the case, missed opportunities, and expensive, unassessed, risks.
1 Central Overhead savings / Cost of Property ownership
The original Option A was to close 11 libraries, completely, and save all costs of owning the buildings. In Option B+ the Council retains the buildings, and all costs of ownership ( maintenance etc, but not utilities) although this was not factored into the business case analysis. This represents an on-going risk, which is not quantified.
“Continuing, and possibly increasing costs of property maintenance at the Central Library, and CMLs.” (Cabinet report 21/6/17)
Of the £648k saving, ~£150k relates to the reduction in overhead costs not allocated to specific libraries e.g. buildings maintenance, cleaning, books, software licensing, IT network and wi-fi, stationery and computer consumables. If all 10 CML’s sign-up to the Enhanced Support Packages on offer, which cover the provision of the IT/computer/book management infrastructure – then it’s unlikely that this £150k saving would be made.
The argument made by the Council is that the costs are not budgetted in the Libraries dept, and therefore not part of the case – which is a flawed position.
The savings are potentially over-stated by at least ~ £150k.
2 Citywide savings
The staff in the 10 libraries which are due to become CML’s, currently cost ~ £300k per year in salaries. All of this will be saved in Option B+. Over and above this there are “Central / HQ” staff costing the council £441k, being
- Miscellaneous citywide libraries staffing £343k
- Delivery, co-ordination and engagement £77k
- Contribution to strategic management £21k
In Option B+ this remains unchanged – all of those jobs are preserved. A restructure of the library service must also reduce central staff costs; the case does assume that non-staff overheads will be saved ( above) – this is inconsistent. If there was just a 25% saving, then the next 2 popular libraries after Mickleover, being Spondon and Chellaston could be kept as Council run.
Why have no savings to Central ‘Citywide’ costs been targetted?
3 Opening Hours
Option B+ “saves” the Mickleover library by not increasing the opening hours of the Council run libraries by 50%; it proposes just a 25% increase. If there was no increase in opening hours at all, this would save ~ £70k which would allow Sinfin library to be maintained as Council run.
4 Business Case for Riverside
The capital costs of the changes to the Council House ground floor, relating to the Riverside library are £860k; the annual savings resulting from this, are quoted at £128k (within the £648k). This is on the assumption that the Library occupies the ground floor for free – and there are no incremental running costs. The business case states the assumption that:
“The premises costs of operating Riverside Library out of the Council House would be absorbed into the existing Council House budget.” (Cabinet report 21/6/17)
It is presented as an assumption, not an analysed fact. It seems most unlikely.
The £128k saving ( if indeed it is as much as that) for the next 7 years ( or longer) will be paying back the capital costs, not reducing the overall Council budget!
5 £1m Lottery clawback
The Allenton, Chellaston and Mackworth libraries were funded by a £2m Big Lottery Grant. One of the conditions is that they have to operate as libraries for 20 years – this ends 2029/2030. If they don’t, then the Lottery can claw the money back on a sliding scale. If, for example, on 1 April 2018, they are not operating as libraries, to the satisfaction of the Big Lottery then the Council will have to re-pay £1.12m!
This is a risk, and depends very much on the level of financial support from the Council and the agreement with the CML. The Council has stated that this is still an open issue. Perhaps a specific agreement with the Big Lottery should have been sought before proceeding with the plan.
6 Current Library employees – Transfer provisions (TUPE)
If the library,after the transfer to the CML, is fundamentally the same as the one before – which many would hope was the case, then TUPE regulations apply. The Council estimates the liability could be up to £550k. This is not included in the calculations on the basis that the
“At the present time the Council does not know the sort of business that might be conducted at any of the CMLs. Until it does it cannot be certain that TUPE will not apply to any of these transactions.”(Cabinet report 21/6/17)
It would be safe to say that they would be operating as a library, in some form, if not then the £1.12m Lottery clawback is a real risk.
7 Environmental Sustainability
If a lease is awarded to a CML to run the library ( a likely option in the circumstances) then it must be done before 1 April 2018.
“Leases awarded after this date will be subject to the Minimum Energy Efficiency Standard (MEES) under the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 which will affect any library with an Energy performance Certificate (EPC) that has a rating lower than E unless the council have carried out all cost-effective works to improve energy efficiency. This will need further consideration should leases be awarded after the implementation date. Further investigation will be undertaken on a library-by-library basis clarify the possible impact and cost implications of these Regulations on the CML proposals” (Cabinet report 21/6/17)
This is driving the urgency of the overall Library programme to avoid these undisclosed/unassessed costs being realised and which have not been factored into the business case.
The Council‟s financial position remains challenging. The Medium Term Financial Plan requires that £673k be saved from Libraries budgets, split between 2017/18 (£336k) and 2018/19 (£337k)……. Option B Plus has been designed to deliver the required savings (Cabinet report 21/6/17)
Except of course that the plan does not deliver the required savings. By 31 March 2018
- The Central Library will not have closed; Riverside will not be open until May 2018. ( per the plan) – 2018/19 will be the first year of saving £128k pa
- The 10 libraries to become CML’s will, at best, have only been transferred for a few months – the assumption being that all staff have left with no redundancy costs, no TUPE costs, no Lottery clawback
The required savings relate to a 12 month period. It is impossible for a full years saving to have been realised in 2017/18. Any savings will be immeasurably small.
The plan does not work. It will not achieve the financial targets.
It is being pushed through in unrealistic timescales without any notion of how it will be achieved beyond the transfer of the Central Library to the Council House . This is to deliver one of the 50 pledges confirmed at the Cabinet Meeting on 21st June – hence the forced urgency!
It was expected that the Library report would have been presented at the 21st June Cabinet. Cllr Raju, Cabinet member responsible, was asked by Cllr Matthew Holmes, whether it would be available by 11 July, for the Cabinet meeting on 12 July. Cllr Raju, cautiously advised, with a degree of reservation but with practical honesty:
“The report of the libraries….we’re still working on it. It needs a lot more work doing to it to make it very robust so, if it’s ready in time we will bring it to the July meeting.”
13 days later, on 4 July, before being approved by the Cabinet – it was published, publicly. It would seem, before the additional work had been completed, and before it had reached its “very robust” status.
Politically this had to happen, quickly…. this is clearly more about saving face, than saving libraries.
NOTE: All data is taken from Council published documents, or Freedom of Information requests