The Good Library Blog

Dear Perkins,

I think you may be mistaken about the previous inclusion of capital charges within the figure which is generally regarded as the 'Cost' of a library service.

The Audit Commission has always regarded the cost of a service (when requiring a base figure for 'Cost per Visit' etc.) as being the CIPFA column headed 'Net Expenditure excluding Capital Charges'. These are the figures which went into CPA scores and seem to be the best cost comparator that we have - bearing in mind all the vagaries in accounting practice and accuracy of data which inevitably creep into exercises of this kind.

Philip, thank you I am corrected.

Perhaps what I meant to say was that Capital Charges have been excluded from the Gross cost, or appear to have been, last year. Or the convention for calculating it was changed.

I agree with you that consistency is the most important thing, both for watching historical trends and for making valid comparisons.

However I also think that the proper cost of the library service is the Gross cost. The reason why libraries charge fees and fines is to supplement to grant they receive from their council. That total money is used to operate the service and that is the measure of how much it costs. That is what the public pay for the service, either through taxation or in the charges they occur as library users. When we talk of what portion is spent on books or staff, the total is the gross cost.

What we should see is a consistent measure of the Gross Cost in order to make sensible comparisons. The Audit Commission are wrong, in my view, to use Net cost as a measure.

Mind you, this year I am looking out closely to see how much of the gross is returned to the council as 'recharge' or support services. In some councils that amount has risen dramatically in recent years. Whenever one asks what does it comprise and how is it calculated, the answers are very unsatisfactory. It appears to resemble unmanaged council overhead on a very large scale. I am sure that libary managers will be sympathetic to this anxiety, however, in corporations where this practice of allocating overhead is normal, it is and should always be challenged rigorously, as that is the proper way to control overhead.

More on this when we see the figures!

Loved your entry from April 23, 2006 called
The Cost of your library service. Have you thought of doing an updated entry on current costs?

Ed- thanks for that- yes as soon as the CIPFA figures come out there will be lots to say.

i should have mentioned, in the previous comment that Capital Charges, when they were properly recorded in CIPFA library data were the only attempt at reflecting the cost of the occupancy of most libraries. A few libraries pay commercial rents but most of the buildings are owned by councils. Capital Charges were intended to act as a nominal rent or opportunity cost for the rent of the building. Without them we are hiding a significant part of the true cost of the service. Even though Capital Charges were a low valuation, they at least were something.