The fallout from the collapse of Carillion has hit the UK’s already beleaguered library sector, with several London authorities making moves to part ways with the bankrupt outsourcing firm – including Croydon council, which has announced it will start running its libraries itself after years of what it has called unsatisfactory service.
Carillion, which went into compulsory liquidation on Monday, was responsible for scores of government contracts, including the management of library services in several London boroughs with a non-profit arm called Cultural Community Solutions. Hounslow, Ealing, Croydon and Harrow outsourced their library services in 2012, to a company called John Laing Integrated Services, which sold the contracts on to Carillion in 2013. Hounslow terminated its contract with Carillion in July 2017.
On Tuesday, Croydon council announced it would immediately terminate its eight-year contract with Carillion, which was set to run the borough’s 13 libraries until 2020, and take on the responsibility itself, rather than outsourcing to another firm. All 73 staff positions were guaranteed, it said.
Councillor Timothy Godfrey, cabinet member for culture, leisure and sport, said that the council had been considering parting ways with Carillion for years, and claimed that the firm had failed to provide a satisfactory library service. “They hadn’t fixed the issues flagged when Hounslow left. They hadn’t been paying paper suppliers and photocopier engineers. Their annual library plan was always behind schedule. It’s been really unfair on the staff on the front line because they were the poor souls holding the service together, and they had no managerial support. There were staff paying out-of-pocket for things like for craft materials for activities with kids.”
Libraries update: staff doing an amazing job behind the scenes sorting out IT issues, taking back our buildings and starting to sort out the issues that Carillion failed to sort out - like the heating at Norbury Library. Still lots to do, but great drive to do this right!
— Cllr Timothy Godfrey (@timothygodfrey) January 16, 2018
The cost to the council to take on the borough’s library service would be slightly higher than paying Carillion, because Croydon council was a living wage employer, admitted Godfrey. “But broadly speaking, it will be the same cost,” he said.
The situation in Harrow and Ealing is complicated by a termination fee negotiated with Carillion: each council would have to pay the firm £485,000 and £639,000 respectively for ending the 10-year contract before 2023. As of Wednesday, both councils continue to recommend that library services remain outsourced. According to their last estimates, it would cost Harrow council £12.7m over five years to run the borough’s six branches and home and school library services in-house, compared with £10.5m if outsourced. Ealing estimates it would cost £5.9m a year to bring its 13 libraries in-house, but £2.05m if outsourced.
But in a Tuesday night cabinet meeting, Ealing proposed to hand extra authority to Keith Townsend, the council’s executive director of environment and customer services, allowing him to transfer or terminate the contract in the event Carillion suddenly withdraws from its libraries. A council spokesperson said it had “robust contingency plans” in place, adding: “Ealing’s libraries continue to operate as normal and we will work closely with the official receiver and any potential new contractors in order to secure the most efficient and high quality library services in to the future.”
Harrow council is set to consider its future plans for its six library branches at a cabinet meeting on Thursday night, but a council spokesman said that it was business as usual, and maintaining consistency for residents and staff was its priority. Under Carillion’s care, no problems in the library service had been reported to the council, he continued, and while the current contract was working, it expected to need a new provider after Carillion’s liquidation.
“It is not that outlandish an idea that we could lift and shift that contract and continue on as we are now,” the spokesman said. “We’re looking at all the options.”
Both Ealing and Harrow councils reported that they expected to avoid the hefty termination fee because of Carillion’s financial circumstances.
The collapse of Carillion means that no public library in the UK remains in the hands of a commercial firm, with not-for-profit company Greenwich Leisure Limited being the biggest service provider in the UK. It is estimated that 500 of the UK’s 3,850 libraries are now run by local volunteers.
Library campaigner Tim Coates said: “The government and local councils have been trying to delegate library services to for-profit and not-for-profits and trusts for 15 years. It has been a complete waste of time and effort and it was never going to work. Libraries don’t make money – the whole point is that they’re free. Councils palming them off to someone looking for some kind of gain is a waste of time and doesn’t make for a great library service.”