- The UK Public Library Network will require a mix of funding solutions
to meet the different financial requirements associated with developing
the infrastructure, operating and managing the network, creating
content, and developing new services. Although central government will
need to play its part in funding, given its other priorities and
public-expenditure pressures it will be necessary to draw on as wide a
variety of funding sources as possible, and to seek to maximise the
possibilities of cross-sector collaborations and partnerships with other
public agencies and the private sector.
- Possible sources of funding include:
- local and UK-wide partnerships with the private sector;
- central government/National Lottery;
- partnership between central government and local government,
including library authorities;
- revenues from the users of certain added-value services;
- many other libraries which could potentially be considered as
partners - for example:
- the further education and higher education libraries, which are
funded through FEFC and HEFC;
- the school libraries, which are non-statutory;
- special libraries in commercial, public-sector and voluntary
- The sources of funding will in turn govern the procurement methods
that are possible - for example, it would be very difficult to procure a
core central infrastructure through local financing.
- The implementation of the network must be informed by the emerging
vision for the public library service and the core aims and values which
underpin it - particularly the key principle of equality of access. It
must therefore marry short-, medium- and long-term goals within a
strategic framework that avoids quick-fix solutions driven solely by
- To realise a UK framework that is concerned with maximising public
access to digital resources and ensuring no one is marginalised or
excluded, a UK solution is required. Such a solution will need to ensure
core funding to provide an agreed threshold of access provision in all
libraries. Additionally, it will provide a focus to inform, coordinate,
promote, facilitate and stimulate access to other funding opportunities
at local, regional, UK and European level. This will maximise
opportunities for collaboration, and will encourage innovative and
imaginative ways of developing added-value services that in turn will
help to sustain core services.
- Unless provision of the proposed network is seen as a public service
- if it is left to the private sector - there is a danger that the flow
of information will be controlled for commercial purposes. The librarian
must act as a disinterested broker - in certain instances ensuring that
the user has access to a range of information from a number of different
- The first task is to conduct an inventory and audit of current
infrastructure and services, so as to understand what is already in
place, what is currently planned, and what needs to be boosted. Let us
assume that we can then proceed by way of modular systems as follows:
- library authority networks of computer terminals in libraries, and
perhaps elsewhere, mainly to link libraries and to access information on
the Internet, but also to provide local tools such as educational
software, and access to new services - see (b);
- the provision of library-generated community information services on
Internet Web sites, however accessed - including possible access from
- the purchase of access by library users to subscription services
already available on the Internet;
- the scope to transact specified central government, local government,
utility and/or retail shopping business over the Internet - the precise
services to be selected by the library authority;
- the issuing of library cards, in whatever technological form,
uniquely to identify readers, and perhaps also to charge them for any or
all of the above uses.
- A central body should be appointed to:
- specify, procure and supervise the UK managed network service;
- specify the service levels and connection policy to the library
- set and monitor the standards for implementation of the network;
- coordinate procurement and direct the production of content;
- drive the overall implementation programme - including change
management, training and support;
- establish an arrangement to enable local procurement of standard
components such as PCs at standard terms, such that local areas benefit
from the total purchasing power of the group;
- ensure equity of service across the UK;
- coordinate distribution of development funding to library
- The following table illustrates the most appropriate source of
funding for the various elements envisaged. Note:
'Central' means existing or new government programmes or grants and
|Public Library Networking Agency
||Centrally negotiated,locally procured
|Consortia purchasing team
||Central/local and partnership funding(education
sector/DTI/government; local authority as information provider)
|Digitisation of rare and special collections
|Common information framework
|Training and development
|Training programme management
|Networked courses: delivery and accreditation
|Local training incentive fund
|UK 'backbone'/Public Library Network (PLN)
|Local library networks to PLN standards,plus associated kit
||Central/local or Central/local/partners(where metropolitan area
networks, distributed access to catalogues, etc. are in development)
- Funding for ICT projects could, in principle, take a variety of
forms, as follows.
Private finance initiatives
- In view of the extensive possibilities open to the private sector,
there should be scope for private finance initiatives (PFI). The most
- where an entire building or unit is built and operated by the private
sector and leased back as a managed facility to the library authority;
- where just the ICT facility - kit and network services - is operated
by the private sector and is leased back, for a fee, to a single library
authority or a group of library authorities.
- Whatever the sunk investment in ICT, or the scale and type of
provision, there is scope for a PFI project in funding a specified level
of service provision, over a specified contract life, with open
communication standards and suitable training, operating and maintenance
obligations. The more that appropriate risks can be transferred to the
private sector, the more likely it is that the higher cost of finance
incurred by a private-sector company rather than a public-sector body
will be outweighed by greater value for money over the life of the
contract as the private sector achieves better management of technology,
service flexibility and risk. Provided the library user gets the service
specified in the contract, there is no obvious reason why the library
authority needs to own the hardware by which the service is provided.
- Any mixed mode of funding might require some mechanism to ensure that
the service can be sustained if one of the sources of funding is
Central government funding
- Central government funding might be available - potentially as grant
finance (no repayments) or loan finance (repayments funded from income
according to a fixed schedule and interest rates), or even as some form
of launch aid (repayments according to a percentage of commercial income
above a threshold level, but no repayments if commercial income does not
reach that threshold), though this last option would be seen as one that
penalises the more successful operation. In view of the important role
that the UK Public Library Network will play in the National Grid for
Learning, it is important that funding for the National Grid for
Learning should embrace public libraries as well as schools.
- The key question for the library authority is whether the investment
project looks sustainable. The key question for central government is
whether seeking some form of return from early projects might help
restore the resources to fund later developments.
- In terms of distribution criteria, funding could be provided:
- on a formula basis (per head of population served, or based on the
size of the local library network);
- on a challenge basis - for example, the best new content proposals
for community information, say, drawing on a variety of partnerships
between library authorities and/or others;
- based on geographical considerations (urban/rural factors).
- It may be possible to secure funding from the National Lottery, if
central government sets suitable criteria for eligibility and
distribution. One possibility is for the Millennium Fund to be replaced,
after the year 2000, by a fund for connecting libraries, schools and
others to the information superhighway.
- One particular point to note here is that adequate revenue provision
must be found to cover the operating costs of capital investment funded
by the Lottery.
- One way of addressing this might be through a Lottery endowment
grant, where the funding is invested and the interest can be used as
revenue - to pay staff costs, for example.
- It should be noted that libraries are not currently eligible for
Lottery funding of their core activities. To use Lottery funding for
this purpose would require government intervention either:
- to change the eligibility criteria; or
- to identify this development as being such a significant enhancement
to libraries' current role that it is no longer seen as a core activity
and so falls within the Lottery's provisions.
Local government funding
- Local government might likewise contribute funding by obtaining
credit approvals (permissions from central government for the local
authority to borrow funds on the market). Basic credit approvals can be
used for a variety of purposes, and supplementary credit approvals can
be used on condition that the funds are put to a specific use.
- Credit approvals score as public expenditure, and affect the PSBR, so
central government will have views on the overall availability of
finance. Within this overall total, local authorities can exercise their
discretion on their own priorities, except where central government
imposes a view - perhaps by means of top-slicing credit approvals to
give greater priority to funding specific types of investment project.
New information providers
- There are new information providers who are required to reach
specific audiences. TECs and business development agencies have been
given a large amount of public money to do this - to brief small
companies on how to export, for example. Public libraries are frequently
seen as providing a useful channel for these agencies, and partnerships
have already developed in some parts of the UK. The library can continue
to act in the role of information broker and service provider. This
would be a natural extension of its core role of providing mediated
access to library services and resources, and would reaffirm the
fundamental position of the library as a key node in the public
- A situation could be envisaged in which certain services - such as
job search - were provided by franchisees within the library who could
offer supplementary services across the library network. One way this
might work is by the franchisee offering so many hours per week free to
selected categories of client in return for the facility, and then
charging for the service from there on. Additional revenues could also
come from allowing companies to advertise their services across the
library network. These examples show how added-value services may be
developed to help sustain core services.
- Clearly the cost benefits of such developments will depend on local
circumstances. These developments will not be viable in all areas, and
should not be regarded as a replacement for core funding, but where
opportunities exist or can be encouraged - for example via a consortium
approach, promoting models of best practice etc. - such partnerships
will provide a valuable resource to support and sustain basic levels of
access to networked services.
Other financial opportunities
- It is also worth noting that statutory or regulatory instruments may
be available to central government to affect the distribution of costs.
For example, where there is a public interest in obtaining Web-site
access to records of agendas, minutes and papers taken at meetings of
statutory bodies, effective cross-subsidisation could be imposed on such
bodies by legislating to require them to deposit such records with
libraries in electronic form. This might also be the case with local
government proceedings or issues.
- As a condition of their operating licence, railway and bus companies
could be required to deposit copies of their timetables and fare
structures with the library, in electronic form - though the commercial
benefits from making this information easily available to the public
make it unlikely that regulation would be needed in this area. There was
also talk, in the run-up to the recent general election, of
telecommunications companies being required to provide libraries and
schools with access to the information superhighway as a condition of
their operating licence. Such a requirement could provide the foundation
for a wider UK government information policy.
Financing knowledge provision
- The issues involved in financing the construction of Web sites
generated by the library sector to display information and resources on
the Internet are substantially different from those concerning the core
funding of the network. Again there are a number of different funding
mechanisms, which would all apply:
- central funds to establish a core set of facilities;
- a pool of funding to upgrade the less well equipped libraries to a
minimum level of facilities;
- pioneer funds (perhaps from the National Lottery), to enable
particularly innovative proposals to be taken forward.
- It will be important for the library to own the intellectual property
represented by the information on its Web site, and to establish
copyright where appropriate. If there is scope for a PFI project in this
area, it may be limited to digitising important or rare archive material
in return for a licensed period of exploitation under specified price
and other terms, at the end of which period full ownership of the
material must transfer back to the library. But, even this design,
build, operate and transfer (DBOT) approach may be less satisfactory
than a fully public-sector approach in which the library authority owns
and manages the whole project - albeit placing a (fixed-price) contract
with a private-sector company to build and manage the Web site to the
- As well as the capital costs of construction, account should be taken
of the revenue costs of keeping Web sites constantly and consistently up
- It would be appropriate for the Public Library Networking Agency to
issue guidance on the open standards to which Web sites should be
constructed. One model might be that adopted by the Cyberskills
Association, whose Cyberskills Exchange provides its members with a set
of tools to provide a standard architecture, a common look and feel, and
a structure for:
- holding 'libraries' of information;
- discussion forums;
- billable services.
- The Cyberskills Exchange also provides a support group for the
community of information managers that run the 'information hubs',
offering advice and guidance on best practice.
Purchase of access to subscription services
- It seems likely that, as with the printed word, different library
users will want to access different sources of information on the
Internet, some of which may set licence conditions or charge a
subscription fee. For example, a student may require access to an
economics journal, or a member of the public access to back issues of
New Scientist. As part of the normal operations of the
library, the library authority may elect to purchase access to these
subscription services for its readers, whether or not it passes on
charges to them.
- The obvious requirement here is for a UK initiative to form a
purchasing consortium to negotiate the very best terms for purchasing in
bulk, where this is appropriate. Given the proportion of the UK
population represented by library users - 58 per cent - the purchasing
power of this consortium should be considerable.
- There needs to be a consistent access policy, with perhaps some local
flexibility where charges are deemed appropriate. But there is a need to
ensure against situations whereby one authority charges and another
doesn't, thus compromising the principle of equality of access.
Financing the infrastructure
- This chapter is written on the basis of the recommendations made in
Chapter 4 - namely:
- a single UK managed network service to provide the core 'backbone'
- a standard connection to existing library authority networks;
- a central fund made available to encourage library authorities to
upgrade their existing networks and access devices where necessary.
- Different library authorities will start with different sunk
investments in ICT. Some may have well-developed internal systems -
perhaps even with links to other parts of local government, and perhaps
servicing most, if not all, the libraries in the area. The requirement
for these authorities may be to extend the network to all libraries, to
introduce some form of external gateway to the Internet, to upgrade the
bandwidth of telecommunication links to a more suitable open standard,
and/or to introduce security firewalls between the public and private
parts of the network to prevent hacking. Other library authorities may
have little sunk investment in ICT, and their local networks will have
to be substantially upgraded.
- If certain libraries wish to make available to their readers the
opportunity to conduct business transactions over the Internet, the two
main requirements are:
- an enhanced certainty that the reader is who he or she claims to be -
to ensure that the library is not party to fraudulent misrepresentation;
- being satisfied that the reader is both able and willing to fund the
costs of his or her transaction.
- These are discussed further below.
- Another opportunity for libraries may be the provision of suitable
software for a variety of off-line uses. Typical hobby uses may require
family history, gardening, computer-aided design or financial software.
Further ranges of software will be needed for children's education after
school hours or in the holidays, or for lifelong education programmes.
Some libraries might choose to offer business applications, but this
might be seen as beyond their remit and might impact upon local
companies offering services to small businesses on a commercial basis.
Alternatively, this is another area for potential partnership with the
- On the other side of the fence, the library may be able to secure
commission income from service providers who transact authorised
Internet business - for instance from the sale or purchase of stocks or
shares. Consortium negotiations may be needed to secure the best
- In deciding whether or not to provide such commercial services,
libraries will need to consider the impact such provision might have on
the conduct of normal business. There might be controversy if libraries
were seen to be stepping beyond the bounds of their public-service role
and competing with local businesses. In any case, it will be necessary
for library authorities to ensure that they are not undermining local
business potential through anti-competitive activities.
- Library cards currently fulfil a number of important functions, which
could be enhanced by the use of smartcard technology, including the
- membership details;
- borrowing status;
- items on loan;
- use of facilities available - levels of access, and whether free or
charged for etc.;
- approved charges for use of any library facilities;
- discretionary allowances - for example, for children and for those
- approved business transactions on the Web;
- residency status - to allow the potential for votes being registered
electronically, on local issues or in central referendums or elections.
No such services exist at present, but these could be envisaged in the
- In the case of establishing identity, it would be possible for
libraries to make use of a central-government-sponsored smartcard, if
one were introduced. Failing this, or while waiting for it to be
developed, the library would follow the procedures it currently uses
when issuing library cards to borrowers.
- One solution might be for libraries to make use of a smartcard
already in circulation, such as those which will be used for social
security benefits (which would enable certain groups to be targeted for
preferential or free access to key services, such as might help
unemployed people to find jobs). Or there could be some form of
prepayment card, like telephone cards.
- Once again, there will be virtue in library authorities acting
together to agree common standards for the issuing of library cards and
the obligation to make payment in respect of debts incurred. This would
facilitate out-of-area services being made available to professionals
away from base, or to the general public on holiday or visiting
- See paragraphs 5.55 to 5.60 for more on the subject of charges for
- All procurement will be via open tendering, to secure best value for
money. The EC Procurement Directives require advertising in the EC
Journal for contracts in excess of £180,500.
- All the usual public-sector disciplines will apply. Officers placing
the contract will be accountable for propriety, regularity and best
value for money, and will need to consider in advance the precise
mandatory and desirable user specifications put out to tender, the
appropriate degree of risk transfer, the scope for fixed-price or
incentive contracts, and the penalties to be triggered by breach of
contract terms or project milestones.
Risks and reward management
for ICT projects
- In a PFI project the private sector will take on the project risks -
both technical and business - but will expect to be rewarded
accordingly. The supplier will usually be responsible for designing,
implementing, running and maintaining the project solution, and also for
any technology update needed to keep it current.
- Many contracts specify a reward for the supplier based on how well
the system is used. It is important to agree the right balance here
between unit cost and level of usage, so that the supplier may incur
some penalty if the system is not used as well as had been predicted,
but gains extra revenues if it is used more.
- The critical issue in any PFI contract is for both sides to have an
agreed commercial deal at an early stage - each side has to understand
the other's position vis-à-vis the way in which costs
have been allocated. It needs to be made clear who bears the costs if
anything goes wrong.
- A risk register must be agreed that covers all areas, including
technology, usage and any vulnerability to changes in legislation. The
register must specify who is responsible for each risk, and both sides
must agree how the risks will be minimised and managed. If too much risk
is passed over to the supplier the costs may well soar, so the right
balance needs to be found.
- There needs to be a process of continuous review, monitoring how the
contract is being managed, and this too must be defined at an early
stage. It must be made clear what will happen if the requirements
change, if new applications are needed.
- An exit strategy must also be defined, specifying what will happen at
the end of the contract period, who owns any assets, and how the
contract will be rebid.
- Access to network services could be free at the point of use, even if
the library is required to make payment to a service provider, or could
be charged to the user. This crucial issue cannot be determined in
principle at this stage, since it will relate to the funding source of
the UK Public Library Network, particularly if public/private
partnerships are involved.
- There are a number of key factors which underpin and inform this
- The principle of free access (to a defined level of service) at the
point of delivery raises the question of how the service should be paid
for rather than what level of charge is appropriate.
- The emerging information and communication technologies are the new
literacy, and the successful communities of tomorrow will be those who,
given access, are informed and educated in the use of these
- Without such access, groups of people will be cut off from this
developing knowledge-rich world, and their ability to survive and
succeed in the information economy will be greatly reduced. This will
have knock-on effects in terms of social inclusion/exclusion, impact on
local communities and local economies, and a widening gap between the
information-rich and the information-poor.
- Conversely, establishing a threshold of free access within a UK
public library network will:
- ensure a basic equality of access throughout the whole country;
- provide a UK platform to facilitate the cultural change necessary
to encourage people to acquire and use the new information and
communication skills and to adjust more rapidly to the developing
- very quickly build up the critical mass of users that justifies
investment in the infrastructure;
- move the debate away from the bottle's neck to the bottle's
contents: the future of the network lies not in the technology but
in the content and services that can be made available.
- Investing in the skills base of the country now will both stimulate
demand for content and develop the necessary expertise to provide it.
Given the global nature of the developing information and communication
technologies, this will help the UK to gain market advantage and build a
more secure future for the country. Any charge will act as a barrier to
access. It will not affect the ultimate direction of change, but it will
affect the pace of that change. Where the threshold of access is
established will determine whether the country takes a quantum leap
forward into the information society or merely breaks the sound barrier.
- Having established the threshold of access that is free at the point
of delivery - and that may require a change to the legislative framework
- attention can shift to the development of added-value services that
may provide revenue streams to support and sustain the core service. For
example, just as today books are free but one pays to borrow CDs and
videos, a fiction library might be free but added-value services for
business might be charged for. One could charge a user to access a
commercial database or to book a holiday, or even rent 'virtual' space
out to a business on the library Web server.
- Charging according to use within this framework will not compromise
the principle of equality of access. Where resources are still scarce
initially, access to 'free' services may be time-limited to provide a
simple regulatory mechanism.
- Collaboration with other public- and private-sector bodies will be
vital, not only in terms of developing added-value services but also in
enabling maximum benefit to be derived from available resources - for
example, bending existing local ICT resources towards development of
integrated networks, realising potential economies of scale, cost
sharing, resource sharing and expertise sharing. A number of examples of
public/private- sector partnerships have already been outlined above.
While all have (potentially) a local application, much can be done at UK
level to facilitate such arrangements to ensure effective coordination
and exploitation of best practice.
- The proposed investment will result in a number of opportunities to
generate income which can be used to offset some of the costs or to
improve or diversify the service. These might include:
- new services which exploit the infrastructure and are offered on a
- sponsorship and advertising fees;
- charging for specialist training - which may be delivered through
- enabling commercial organisations to use the infrastructure - to
'rent' space on the library network, for example;
- charging for commercial use of content whose digitisation has been
funded through this initiative; this represents a major opportunity for
UK content and services as worldwide exports ;
- income from central government for the provision of electronic
- No attempt has yet been made to quantify the value of these
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