Chapter III: Finance, Loans and Accounts

=27. The Library Rate.=--The general library Acts passed for Ireland, Scotland and England all limit the amount to be raised by rate for library purposes to one penny in the pound on the annual rateable rental of all properties within the areas, with certain exceptions or modifications as to gardens and agricultural lands. Great doubt exists as to what is meant by a penny rate and on what value it is to be levied. Some authorities maintain that the income from a penny rate can only represent the net sum realized by a penny on the rateable value, after all deductions have been made on account of empty houses and other irrecoverable items. Against this may be set the actual practice in several places, of paying over the full sum which a penny rate on the nominal rateable value would produce, without any deductions whatsoever. As the Public Libraries Acts have placed a limitation on the amount of the library rate, it may be assumed that the libraries were intended to benefit to the full extent of the rateable value. At any rate the Acts are silent on the point, and practice differs so much that it is fair to say that a public library, because of the present limitation, and because some places now give the full product, is entitled to the full amount which a penny rate would yield when calculated on the full rateable value of the town or district, without deduction of any kind, either for unproductive properties or cost of collection. It has been decided that no deduction can be made from the income produced by the library rate on account of the cost of collection, and as this rate is now collected as part of a general or other unlimited rate, it seems unfair to saddle it with any part of the cost of collection. If it were collected as a separate rate, or with rates similarly limited by Act of Parliament, the position would be different. The difference between the amount paid over to public libraries and the actual sums which would be produced were the rate charged on the full rateable value is sometimes considerable. The losses range from over 20 to 5 per cent., and thus a considerable limit is placed upon the book-purchasing power of a large number of libraries.

=28. Unexpended Balances.=--In some places the local authority has appropriated unexpended balances of the public library rate and applied them to other local purposes. This action is clearly illegal, and could only have been taken by those who are ignorant of the decisions of the Local Government Board on the point. It is true the Acts do not specify how unexpended balances of the library rate are to be dealt with, but it is equally true that as the money was raised under a special Act for a strictly defined purpose, it cannot be diverted to any other purpose, nor can it be carried forward as a portion of the library rate for a succeeding year. No doubt the wording of the Act is responsible for the interpretation which has been put upon the section entitled “Limitations on expenditure for purpose of Act.” It reads: “A rate or addition to a rate shall not be levied for the purposes of this Act for any one financial year in any library district to an amount exceeding one penny in the pound.” The Local Government Board have decided that any unexpended balances of the library income must be carried forward to next year’s library account, without prejudice to the next year’s library income. This decision has been upheld by all the district auditors of the Local Government Board, and it is difficult to understand the reason why a few places still cling to the belief that the library rate can be further limited by this illegal procedure of appropriating unexpended balances. Committees who are threatened with this action can always protect themselves against the injustice by taking care that there are no balances to appropriate; but it will prevent them from saving a little money for necessary book purchases, cleaning or other purposes. It should be pointed out, furthermore, that the section of the Act above quoted does not really refer to the total _amount_ to be raised by rate in a given year, but only to the _poundage_ or rate which may be charged for library purposes, namely, not more than a penny in the pound. The question of the _product_ of this rate of a penny is not mentioned anywhere in the Acts, and it is this lack of clear definition--the failure to distinguish the amount of a rate from the total amount which it will produce annually--which is responsible for many of the difficulties hitherto met with in administering the Libraries Acts.

=29. Annual Estimates.=--The Scotch principal Act is the only one which requires an annual estimate or budget to be prepared by the library authority for the information of the local authority. Section 30 of the Act of 1887 provides that “The Committee shall in the month of April in every year make up, or cause to be made up, an estimate of the sums required in order to defray the interest of any money borrowed, the payment of the sinking fund, and the expense of maintaining and managing all libraries and museums under its control for the year after Whitsunday then next to come, and for the purpose of purchasing the books, articles and things authorized by this Act,” etc. This estimate has to be submitted to the local authority, who “shall provide the amount required out of the library rate to be levied by it, and shall pay over to the committee the sum necessary for the annual expenditure by it in terms of its estimate.” By the standing orders of most local authorities yearly or half-yearly estimates have to be prepared and submitted by the various committees, and as practice varies everywhere, it will be well for the library authority to follow the local practice.

=30.= Local circumstances alter the conditions materially in every place, and hitherto there has been a lack of uniformity in presenting financial statements which makes any attempt to produce a model budget to be suspect. The form of the statement is often governed by the practice of the Borough Accountant, who arranges the order of items in accordance with his own views; but wherever it is possible to do so, it would be well if the form of annual estimate conformed with the order adopted in the report made by Professor W. G. S. Adams to the Carnegie United Kingdom Trust in 1915, _On Library Provision and Policy_, which would arrange in some such order as in the table on page 46.

Each of these items will probably need analysis, and the order given here may be inverted; indeed, the form shown is merely meant to be suggestive and to show the nature of the information which the Council usually requires when it is considering the annual estimates.

+--------------------------------------------------------------+
| PUBLIC LIBRARY COMMITTEE ESTIMATE, 1919. |
+--------------------------------------------------------------+
|_Expenditure._ |
+--------+--------------------------+--------+--------+--------+
| Actual | |Estimate| Actual |Estimate|
| 1917. | | 1918. | 1918. | 1919. |
+--------+--------------------------+--------+--------+--------+
| 1. £897|Books and Binding | £900 | £910 | £920 |
| 2. £300|Newspapers and Periodicals| £350 | £380 | £380 |
| 3. etc.|Salaries and Wages | .. | .. | .. |
| 4. |Rent and Loans | .. | .. | .. |
| 5. |Rates and Taxes | .. | .. | .. |
| 6. |Maintenance: | .. | .. | .. |
| 7. | Lighting | .. | .. | .. |
| 8. | Heating | .. | .. | .. |
| 9. | Cleaning | .. | .. | .. |
|10. |Balance | .. | .. | .. |
+--------+--------------------------+--------+--------+--------+
|_Income_ | | | |
+--------+--------------------------+--------+--------+--------+
| 1. |From 0d. rate | .. | .. | .. |
| 2. |From other sources | .. | .. | .. |
+--------+--------------------------+--------+--------+--------+

FIG. 1.--Form for Annual Estimates.

=31.= The distribution of the income over the various items is again subject to local circumstances; but, thanks to the inquiry of Professor Adams, a table of comparative distribution of income drawn from the figures of about 500 library systems throughout the kingdom has been published, which gives the best information at present available. It is qualified by the facts we have emphasized in the last paragraph, and still more by the changed conditions which result from the European War, which have increased such items as salaries, and reduced the book-purchasing (and indeed every other purchasing) power of libraries considerably. We give the table of percentages of expenditure for libraries with, and without, loans, merely remarking that it may serve as a rough guide by which library committees may work. Again, the librarian, in submitting his budget for the use of his committee, will analyse the items into general administrative, central, reference and branch libraries’ expenditure, and under each will show salaries as distinct from wages paid for unskilled service; and books will be divided into “new,” “replacements,” etc.; periodicals into those filed permanently and others; maintenance charges into building expenses, furniture and fittings, stationery, repairs to fabric and furniture, and so on. The Council as a rule does not require so detailed a statement.

CLASSIFIED PERCENTAGES OF LIBRARY EXPENDITURE

LIBRARIES WITH LOAN CHARGES.
+---------+--------+-------+-------+------+------+------------+-----+
| | | Peri- | | | |Other Items,| |
| | Books |odicals| |Rents |Rates | including | |
| Income. | and | and | Sala- | and | and |Maintenance |Total|
| |Binding.| News- | ries. |Loans.|Taxes.|of Premises,| |
| | |papers.| | | |Light, Heat,| |
| | | | | | | &c. | |
+---------+--------+-------+-------+------+------+------------+-----+
| £ | % | % | % | % | % | % | % |
|8000 | | | | | | | |
| & over| 19·06 | 4·96 | 37·5 | 15·46| 2·41 | 20·58 |99·97|
|4000-8000| 18·81 | 5·31 | 39·96 | 12·54| 1·81 | 21·55 |99·98|
|3000-4000| 17·97 | 6·07 | 41·74 | 17·42| 1·09 | 15·68 |99·97|
|2000-3000| 19·53 | 6·44 | 39·33 | 13·5 | 2·38 | 18·78 |99·96|
|1500-2000| 21·09 | 6·24 | 37·87 | 13·13| 2·3 | 19·01 |99·64|
|1000-1500| 19·07 | 7·43 | 37·18 | 16·47| 2·21 | 17·62 |99·98|
| 750-1000| 17·58 | 7·81 | 38·97 | 10·8 | 2·22 | 22·6 |99·86|
| 500- 750| 17·55 | 10·88 | 36·32 | 11·81| 3·10 | 20·22 |99·88|
| 250- 500| 13·12 | 10·25 | 38·9 | 15·09| 4·00 | 18·61 |99·97|
| 100- 250| 16·31 | 13·13 | 33·63 | 21·31| 3·14 | 12·45 |99·97|
|Under 100| 14·32 | 16·15 | 25·84 | 24·48| 2·66 | 19·52 |99·97|
+---------+--------+-------+-------+------+------+------------+-----+

LIBRARIES WITHOUT LOAN CHARGES.
+---------+--------+-------+-------+------+------+------------+-----+
| | | Peri- | | | |Other Items,| |
| | Books |odicals| |Rents |Rates | including | |
| Income. | and | and | Sala- | and | and |Maintenance |Total|
| |Binding.| News- | ries. |Loans.|Taxes.|of Premises,| |
| | |papers.| | | |Light, Heat,| |
| | | | | | | &c. | |
+---------+--------+-------+-------+------+------+------------+-----+
| £ | % | % | % | % | % | % | % |
|1000 | | | | | | | |
| & over| 19·93 | 6·37 | 39·22 | .. | 2·03 | 32·43 |99·98|
| 750-1000| 25·4 | 7·95 | 44·17 | .. | 3·16 | 19·29 |99·97|
| 500- 750| 20·31 | 9·98 | 45·49 | .. | 3·86 | 20·23 |99·97|
| 400- 500| 18·48 | 10·07 | 40·90 | .. | 5·81 | 24·6 |99·86|
| 300- 400| 15·9 | 12·31 | 46·91 | .. | 2·9 | 21·9 |99·92|
| 200- 300| 17·13 | 13·25 | 42·98 | .. | 4·00 | 22·61 |99·97|
| 100- 200| 16·2 | 15·66 | 45·1 | .. | 2·54 | 20·47 |99·97|
| 50- 100| 20·16 | 15·82 | 34·29 | .. | 5·68 | 24·02 |99·97|
|Under 50 | 28·65 | 21·85 | 36·46 | .. | 2·26 | 10·75 |99·97|
+---------+--------+-------+-------+------+------+------------+-----+

FIG. 2.--Returns compiled from Professor Adams’ Report on Library Provision and Policy [Carnegie United Kingdom Trust], Sec. 31.

=32.= We must consider in some detail the principal expenditures to which library committees are subject.

=33. Loans.=--The Libraries Acts give fairly full instructions as to loans for public library purposes. In England under the principal Act “every library authority, with the sanction of the Local Government Board . . . may borrow money for the purposes of this Act on the security of any fund or rate applicable for those purposes.” In parishes the regulations for borrowing prescribed by the “Local Government Act, 1894,” are to apply. As a preliminary to borrowing, an inquiry is held locally by a Local Government Board inspector, who receives evidence as to proposed buildings, sites, amount required, etc., and also hears objections to the proposal. The Local Government Board print bills announcing the inquiry, and these must be posted and paid for by the library authority. At such inquiries full particulars should be prepared as to income, date of adopting Acts, etc., as well as particulars of the proposed scheme. After the inquiry is held it is generally about three months later before the sanction of the Board is received. This states the amount sanctioned and for what period the money can be borrowed for sites, buildings, furniture or books, as the case may be.

The security for loans is declared by the “Public Health Act, 1875,”