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A Project Overview
A Project Overview"The IT revolution and the information age is a reality and it is going to affect the way every business operates and the way everyone of us leads our lives"
"As an Information Society, the UK has a lot going for it ... the UK should be a world leader of the Information Society"
"People in Britain are eager to use new technologies, but are being held back by a lack of access to them"
As we experience a revolution as profound as the invention of printing the gulf between the information-rich and the information-poor is growing. This has no place in a democratic society. Just as learning to read was a passport out of poverty and oppression in the past, so being 'IT-literate' will be the key not just to success but to survival in the future. It was on the principle of free access to information and knowledge that Britain's free public library system was founded in the last century.
It is to close this gulf and to make the UK a world leader of the Information Society that Information for All urgently seeks funding from the Millennium Commission for the connection of public libraries to the Internet to create a national for which suppliers are in place, in order to ensure Millennium Commission objectives. A financial appraisal network of Millennium Libraries. This application sets out how a national framework will be organised, using proven technology demonstrates how this can be set up and sustained.
The Millennium Libraries will be living monuments to our celebration of the new millennium in 4,200 locations in villages, towns and cities throughout the UK.
It will be the role of the Millennium Libraries to provide access to information and knowledge delivered electronically to all sectors of society in every part of the UK, from remote rural areas to the inner cities. Public libraries are the key cultural institutions used by the widest cross-section of people by age, class and ethnic origin, with staff trained to help people find the information they need. They will buy access to information sources for their users just as they buy printed journals and reference books (and will continue to do so).
The current provision of Internet access in libraries is small scale and piecemeal, through lack of finance. Information for All will work with local authorities to deliver a comprehensive national service which will enjoy benefits of scale not available to localised initiatives. By creating a large new market, it will give the UK information industry a springboard to success in the global IT market. There will also be opportunities for cooperation with the UK publishing industry in the licensing of electronic information and it will provide a new marketplace for network suppliers. None of this will happen without the catalytic effect of substantial central funding of an initiative conceived on a national scale.
The Millennium Library will be a multimedia facility which will combine new forms of information with traditional ones. We visualise:
Information for All will use proven and familiar technology to make this a reality. Connection will be to the Internet, an existing worldwide computer network, because it is the most cost-effective and efficient method of creating a national network. Information for All will develop:
With a Millennium Commission grant, matching capital
and long-term funding is available either in existing public sector
budgets or through public/private sector partnerships which such
a network would encourage.
The Information for All initiative will generate
tremendous social, economic, educational, cultural and democratic
benefits. It will create opportunities for lifelong learning on
which a successful society will increasingly depend. It will make
it possible for Millennium Libraries to deliver the commercial,
technological and economic information that must underpin competitiveness
in world markets.
It will improve communication with citizens at local,
regional, national and European levels. It will make culture and
heritage more accessible to all and it will promote a genuine
equality of opportunity for everyone. Equality of opportunity
- the cornerstone of any free society - depends on equal access
to knowledge.
That cornerstone will be laid by Information for
All in partnership with the public library service. It will be
built into a sustainable asset of major value to the nation, a
source of knowledge and skills which will grow massively as we
enter the new millennium and which will be crucial to individual
opportunity and quality of life as well as national prosperity.
This is an initiative which will truly change the face of the nation and equip us to face the challenges of the 21st century.
"The explosion of new technologies, the rolling out of the superhighway, is a revolution on a scale to match that of the first industrial revolution." Michael Heseltine, Conservative Party Conference 1996. M
In the United Kingdom the public library network has the potential to achieve a level of connectivity for ordinary people unsurpassed in the world. It will lead to a major change in the way that government agencies can ensure that across the country information in support of democratic choice is made available to all.
Open access to networked information resources will significantly enhance the work being carried out at regional and sub-regional levels in providing new structures for learning, training, and economic regeneration. Funding from programmes such as ADAPT and Single Regeneration Budget have already been targeted by local authorities. Regional Development Plans and Regional Information Society Strategies can be developed in the knowledge that the basic infrastructure is in place. The strengths of regional library co-operation will provide a base on which to develop networked initiatives. Already, Project EARL has set up special interest groups to develop policy guidelines, training and management, and access strategies for business, community and European information.
Networking of all public libraries including the smallest branches will ensure that there will be an equality of access to information whether in an inner city or a remote rural area. Millennium funding will guarantee access in smaller communities to those who would not otherwise be included. Local access to information enables people to stay in their locality leading in turn to support for local businesses such as shops and increasing activity in small towns or villages. Access through the local library (an environment that is familiar and welcoming) will help to sustain the viability of town centres. People with limited opportunities for travel - the elderly and the young and those with disabilities - will benefit from the proximity of the new facilities.
By the year 2000, 60% of jobs will require a working knowledge of information technologies. Society as a whole will benefit from a national network that enables everyone to have access to information and develop the skills to use it.
Public support for the Millennium Libraries project is being sought in the following ways:
Commitment to the project is being expressed by the public, by libraries and local authorities, by information providers and many others. Information for All is continuing to seek support which is already proving to be countrywide and enthusiastic.
Local authorities have mentioned the following benefits from a successful bid:
A senior representative of one authority, with a
policy to connect all outlets to the superhighway, stated that
"Without external support, I fear it is a goal which we will never achieve."
In Scotland, a Convention of Scottish Local Authorities' survey of Chief Executives reveals that two-thirds have already pledged support at this stage, and the project has the support of the Scottish Office.
Other support has come in writing from a variety of agencies. Universities and colleges which have a special interest in serving their local communities recognise the gap between networked information resources in this sector and those available to the public at large, which they see as a barrier to lifelong learning. Others - including (as examples) health agencies, the local authorities associations, and database providers, all support the concept of universal access to the Internet in public libraries.
The public too has a voice - one quotation will
suffice:
"Information for All will transform the information service given by public libraries from one of variable local quality to a top quality national service delivered locally."
Growing demands for information - sixty million library enquiries are logged each year - means that people will increasingly expect that information is delivered to them in electronic form.
Parliamentarians too have expressed support: to date over 130 MPs have expressed interest and support for the Millennium bid.
Annex 6 lists the organisations and individuals who have written to express support for the Millennium Libraries to date.The Information for All web site at http://ukoln.ac.uk/informall/ will contain up to date information on the project, and will record levels of public support as the project proceeds.
The design and implementation of a network that embraces 4,000 libraries will require the most modern techniques and equipment available, the creation of specially designed software and systems engineering of the highest order, and will harness the talents of a whole range of individuals and organisations to:
Users will come from all sections of the community - 60% of the population covering the whole range of employment, age and ethnic characteristics already use libraries. The number of users are estimated to be in the order of 10 million people each year, making 100 million separate uses of the facilities. Research in Hertfordshire has revealed that there is an unmet demand for new and innovative services from existing non-library users, and Millennium Libraries will attract many people who currently do not use their local library.
Because the statutorily funded library service covers the whole of the United Kingdom, Millennium Libraries will reach all people in all communities including British and foreign residents abroad.
By providing local access to information resources normally only found in the largest libraries, networked libraries reduce the need to travel - when it is forecast that there will be a crisis in traffic congestion in the early years of the next century. Unlike buildings or roads a nationally distributed network does not disturb the landscape and remains an invisible, non-polluting national asset. A networked local library will support teleworking in rural, suburban and inner city areas.
Employment opportunities derive from:
The initiative is led by Information for All, a not-for-profit company limited by guarantee. When the project starts (with Millennium Commission funding), Information for All will become a registered charity and will set up a trading subsidiary to manage the grant funding. Information for All is chaired by Sir Charles Chadwyck-Healey, Chairman of Chadwyck-Healey Ltd and a Commissioner of the Library and Information Commission.
Other Board members are: Professor M.W. Collier, Lady Cooksey, Mr R. Craig, Mr L. Dempsey, Mr L.H. Graves, Mr G. Hare, Dr B. McKee, Mr M. Messenger OBE, Rabbi Julia Neuberger, Mr N.J. Russell, Mr R.M. Shimmon, Mrs V.L. Taylor and Mr W.G. Williams.
A well-known industrialist has been invited to join the Board of Information for All when the application goes through to long listing. A leading accountant will also be invited to join the Board at that time.
Information for All will be responsible for overall planning, cash management and reporting, and will act as the library authorities' main contact with the Millennium Commission. It will agree with the Commission the detailed rules for qualifying capital expenditure and establish the milestones for payment. It will vet their expenditure and act as payment agent in partnership with local authorities.
Information for All will bring together the necessary expertise to ensure that the project is properly managed and delivered. This will include ensuring a voice for local authorities during the development and roll-out phases, formal project management methods (e.g. PRINCE), accountancy, communications and research and development. It will negotiate an outline agreement with suppliers and will draw on other library initiatives to develop content and services, and establish a training, quality and marketing programme.
Each library authority will plan and manage its own implementation for each library, and will be advised to appoint a project manager to oversee the programme. The local authorities will agree with suppliers what facilities are required, how each public access operation should be run, and how other local authority networking should be integrated. This allows maximum autonomy for the local authorities while working towards a common goal. Some local authorities may combine management resources and plans with neighbouring authorities; they may have joint initiatives underway in related areas, such as IT in schools and TECs, and may wish to build on existing working arrangements.
The private sector will supply service based on a nationally agreed framework arrangement with standard terms and conditions. They will supply the infrastructure and, in agreement with individual local authorities, may also manage operations within the libraries, and may supply the financing to match the Millennium grant to pay for the capital expenditure. Depending on what each local authority decides to do, a Millennium Library could be set up and managed entirely by the authority which contracts with a number of suppliers to provide components of the infrastructure it needs. Or a Millennium Library could be set up and managed entirely by a single private sector operator, handling both installation and operations, under a Private Finance Initiative concession agreement with the local authority. The authority may choose to combine the Millennium Library initiative with other existing initiatives.
Local authorities will select from a number of possible management arrangements, depending on local economic and social conditions, preferences and priorities. They will then be approached by Information for All with proposals within guidelines set out by the company. Details of this process and the rules will be agreed with the Millennium Commission during the negotiation stage.
Information for All was set up to manage this bid by its equal main funders: the Library and Information Commission and the Library Association. The Library and Information Commission is an advisory body funded by the Department of National Heritage to co-ordinate activity in the library and information community, to work internationally, and to sponsor research. The Library Association is the professional body representing librarians and information managers with a membership of over 25,000. Under its Royal Charter, it is required to promote and encourage the adequate and appropriate provision of library and information services.
Information for All has received further funding from the Scottish Library and Information Council and the Library and Information Services Council (Northern Ireland). Information for All has board representatives from the four bodies mentioned above, plus the Library and Information Services Council (Wales), the Society of Chief Librarians, UKOLN (the Office for Library Networking), the Society of IT Management (for local authorities), and the Advisory Council on Libraries. Lady Cooksey sits in a personal capacity.
As well as having financial and technical advisers, Information for All is advised by Public Private Partnerships Programme Ltd (part of the new Local Government Association).
There will be over 200 local authorities in England,
Scotland and Wales and five Education and Library Boards in Northern
Ireland to implement the Millennium Library programme. Within
each authority is a library department which manages between four
and 100 public libraries which are subject to this application.
Libraries vary in size from large city centre libraries to small
rural branch libraries, and have staffing which matches their
sizes. A useful way of classifying public libraries is by opening
hours. The number of libraries subject to this Millennium bid
will be:-
| Hours per week: | > 45 | 30-44 | 10-29 | < 10 |
| Library numbers: | 730 | 1,598 | 1,656 | 260 |
Total: 4,244
Management of library information technology is usually shared by the library department and central IT departments of the authority. Facilities management contracts supply much of the support.
Suppliers will be selected by each local authority by normal competitive tendering rules or under a framework agreement for IT commodity items such as the Government's own supplies catalogue. An authority may deal with a number of suppliers, or it may select one lead supplier which subcontracts to others. The lead supplier may itself be a consortium.
Potential suppliers vary from the large multinational corporations to local dealers. They may include companies specially created to service this opportunity, originating from within the three industries which together make up the multimedia industry (media, telecommunications and computing) or they may be facilities management companies or publishers.
Many examples exist of suppliers successfully providing the products and services that the libraries will need. In providing public access to their network libraries do not need to rely on unproven technology.
An important consideration for a local authority is the possible supply of private sector management and financing (to match Millennium grant funding). The authority may decide that the private sector should undertake the procurement risks associated with the fast changing technology of the information superhighway. A private sector company may provide all the matched funding for a library, eliminating the need for a local authority to find its own matched funds.
Following a decision in principle to proceed, a local authority's project timetable will depend on the number and size of sites involved, and will typically be eleven months for a whole procurement cycle including contract and initial installation. The first contract may be for a batch of libraries within an authority. Subsequent negotiations for the remaining sites would take less time.
The procurement cost and timetable will be produced by Information for All negotiating with leading suppliers to produce a framework agreement for services. With a draft agreement suppliers can offer a local authority a standard level of service with pricing which can then be modified to suit each library. Key features of a Millennium Library, such as the level of free Internet access, would be included. A local authority will feel less exposed to uncertainty and risk, and the detailed contractual negotiations will be easier and less costly.
Other than for the provision of the Millennium Commission grant, the timetable is largely dictated by local authorities' own circumstances. Some authorities will draw up early plans conditional on a successful Millennium bid. They would be in a position to proceed quickly and will be the first to implement Millennium libraries. Others need more time before they can organise their plans.
The overall time plan for the implementation is as follows:
Information for All expects to complete installations
by the end of 2000. From current knowledge of local authority
plans, and assuming a Millennium Award at the end of 1997, Information
for All predicts the quarterly roll-out of library installations
as follows:
| Q1 | Q2 | Q3 | Q4 | Total for year | |
| 1998 | 150 | 300 | 450 | 525 | 1,425 |
| 1999 | 600 | 525 | 525 | 450 | 2,100 |
| 2000 | 350 | 250 | 119 | 0 | 719 |
| Overall total | 4,244 | ||||
Information for All will be responsible for ensuring that local authorities meet capital expenditure rules on what constitutes a library installation for public access according to Information for All's detailed agreement with the Millennium Commission. It will only release Millennium grant funding against proof of completion of installations vetted against pre-agreed criteria.
Information for All will appoint a quality manager reporting to the Board who will be responsible for QA within Information for All. He or she will develop a quality plan and will be available to co-ordinate quality assurance across the implementation project.
The direct quality control and assurance of suppliers is for local authorities to manage. Each supplier will have to manage its own quality in order to deliver its contractual commitments. The principal way of doing this is the service level agreement which includes a tariff structure which penalises under-performance. Local authorities are highly experienced in purchasing against quality goals and themselves operate within the public sector charter scheme.
Quality risk is further reduced by seeking ISO 9002 from subcontractors, and by using standard proven technology. The provision of a nationally available service will drive the standardisation of facilities which will have a major impact on quality.
Local authorities deal regularly with private sector suppliers and have procurement procedures in place to meet EU directives. The supply of Millennium Library infrastructure currently comes under services supply contracts in the Public Services Regulations.
For the time scale of this programme, we expect EU directives to become consistent with WTO (GATT) requirements. The threshold for local government supplies and services contracts will be 200,000 SDR (Special Drawing Rights) worth ECU 228,000, or £180,500. For the publicly financed case, individual library contracts will be below this level. Contracts for a whole local authority will be above. For the privately financed case, assuming no net cash is paid by the local authority, EU tendering regulations are inapplicable.
The total capital cost of the Millennium Libraries is £139.0m .
The capital cost per library will vary according to its size and local situation. Information for All has produced costing models for a range of library configurations, in which the key parameter is the number of terminals available to the public.
Typical numbers of terminals per library are:
| Large central | Medium town | Branch | Very small branch |
| (> 45 hrs/wk | (30-44 hrs/wk | (20-29 hrs/wk) | (< 10 hrs/wk) |
| 25 | 10 | 3 | 1 |
Averaging across the costing models gives the following capital costs per library, for an average of 10 terminals:
| Section F key | ||
| Hardware | £16.9k | F3 |
| Software | £3.4k | F3 |
| Communications | £1.0k | F2 |
| Furniture | £3.2k | F3 |
| Local integration | £2.4k | F4 |
| Initial local training | £0.4k | F4 |
| Total | £27.3k | |
| Total for 4,244 libraries | £115.7m |
Predicted project management costs over the life of the project
implementation are:
| Local authority management | £8.0m |
| Information for All management | £1.6m |
| Additional fees and charges | £2.0m |
| Bid costs | £0.4m |
| Total project management | £12.0m |
Funding costs, the cost of capital, depend on whether the funding
balance is provided by the public sector or by the private sector.
If by the private sector, then the cost of capital depends on
the financial risks, the debt/equity split, and the circumstances
of the supplier. If the whole funding balance is from private
sources the funding costs are estimated to be £11.3m, based
on a net external cash funding requirement for over four years
and peaking at £39.4m. If the whole funding balance comes
from local authorities the total matched capital funding of £77.7m
(net of capital charges) has to be found from borrowing, capital
receipts or revenue, costed at prevailing treasury rates, currently
9.1%. The public sector funding cost is more difficult to predict
than for the private sector, but it has a higher capital requirement
compensated by lower interest rates and we therefore take the
private sector position:-
Funding cost of capital £11.3m
The total capital cost of the Millennium Libraries is therefore
£139.0m
With the roll-out of library installations shown above under Development
Timetable, the quarterly phasing of capital expenditure in £m
is:
| Q1 | Q2 | Q3 | Q4 | Total for year | |
| 1998 | 4.9 | 9.8 | 14.7 | 17.2 | 46.6 |
| 1999 | 19.6 | 17.2 | 17.2 | 14.7 | 68.7 |
| 2000 | 11.5 | 8.3 | 3.9 | 0 | 23.7 |
| Overall total | £139.0M |
Total Millennium Commission funding of £50m
represents 36% of the total capital spend. Following the timetable
above and ignoring cash management delays, the quarterly phasing
of contributions in £m is:
| Q1 | Q2 | Q3 | Q4 | Total for year | ||
| 1998 | 1.8 | 3.5 | 5.3 | 6.2 | 16.8 | |
| 1999 | 7.1 | 6.2 | 6.2 | 5.3 | 24.8 | |
| 2000 | 4.1 | 2.9 | 1.4 | 0 | 8.4 | |
| Overall total | £50.0m |
The effect of not having Millennium Commission funding is described in Annex 3.
Each local authority will decide whether to manage and run an installation itself or agree for a private firm to do it under PFI, or to do something in between. Either the local authority will provide matched funding or the private firm will. Information for All has modelled both cases.
In the case of local authority matched funding, although a significant part of operating costs will come from revenues earned by charging members of the public (see section E below), the average authority will need to pay a net operating subsidy. Consequently all the matched capital funding will require further subsidy to be raised by its own management.
To cover £21.0k per library (£89.1m total), the authority can look to a number of sources (see Annex 4 for the latest estimates of qualifying expenditure by local authorities):
A number of authorities will, by the time of installation,
have some networking equipment in place for their own use which
can be shared for public access. From knowledge of current and
planned networking installations Information for All predicts
10% of capital costs can be matched in this way.
In the case of private sector matched funding,
a positive net income is expected from revenue operations by charging
members of the public (see section
E below). A case can
be made for private sector capital investment based on market
projections, and the risks associated with this type of project.
Early revenues will contribute to capital spend. The contribution
varies as the take-up increases:
| 1998 | 1999 | 2000 | |
| Matched funding required | £29.9m | £44.0m | £15.1m |
| Revenue contribution | £13.3m | £19.2m | £14.0m |
| (% of matched funding) | 44% | 44% | 93% |
| Net private financing | £16.6m | £24.8m | £2.4m |
| (% of matched funding) | 56% | 56% | 7% |
Very large suppliers may decide to use their own funds for capital financing. Otherwise financing will be a combination of debt and equity, depending on the levels of perceived risk. The money raised will vary according to the library contracts won by each supplier, and also the level of income achieved in the early stages.
There are no direct financial commitments associated
with this bid. Indirectly there are networking arrangements being
put into place by library authorities, some of which can in due
course contribute to the facilities needed for public access under
this bid.
Information for All's cost of making this bid does not imply a
financial commitment for Millennium funding.
The geographical coverage is wherever public libraries can be found throughout the United Kingdom. The capital assets will comprise a number of public access workplaces per library and the infrastructure to support them.
Each workplace will have a chair and a worksurface on which there will be a personal computer or equivalent, equipped with a minimum configuration of screen, keyboard, mouse and control unit with floppy disk drive. The computer will have 'user-friendly' software to give Internet access.
The workplace will be equipped either for simple Internet information retrieval only or for more sophisticated office applications plus Internet, or for multimedia plus office and Internet. Access to the Internet will be via an Internet Service Provider. The multimedia workplaces will be capable of H.261-based video-conferencing using 2B or 6B ISDN.
Each library will have at least one office workstation with CD player, one monochrome printer and the option to use a telephone.
The number of workplaces will vary from library to library according to the size of the library, the space available, the opening hours, the normal use of the library by the community and the proximity of other places providing network access.
The exact technical configuration will depend upon suppliers. Taking the current most likely technology in order to predict costings, typical configurations are (see Annex 5):
The workplaces will require a suitable site in the library, with adequate comfort and design, security of the building, direction signs, fire extinguishers and ongoing provision of light, heat and power. Ten workplaces require between 25 and 40 square metres of floor space.
The public libraries are owned by Local Authorities.
The assembly on each library site will follow agreement with the local authority to proceed. A meeting with the librarian and a site survey will enable a full plan to be developed for each library, identifying actions, timescale, layout, project management, training and responsibilities. Suppliers will be approached for specific quotations and after internal approval by the Local Authority these will be submitted to Information for All to check for eligibility for funds. Assuming this is granted, everything will be installed and fully tested before being made available for public use. Only after this has been achieved and documented will the claim be processed by Information for All against agreed criteria on behalf of the Millennium Commission.
The actual assembly on site will involve:
In each library changes will be required to existing rooms, furnishings, fittings etc., to make room for, and properly accommodate the new equipment.
Rather than seek prior consent at this stage, it has been established that libraries will choose from a range of implementation approaches, ranging from making space by internal rearrangement to creating purpose built environments or even adding additional accommodation to existing libraries. The choice will depend on the library and the local authority, and they will arrange planning consent where necessary.
A small number of libraries and many local authorities have existing IT provision from preferred vendors ranging from local contractors to multi-national companies.
So far, the minor penetration of public access Internet services in libraries is either by local ad hoc arrangements, by local authority IT staff or, in a few large libraries, by a commercial company, sometimes with an operating contract lasting for a few years.
Under public sector financing the local authority retains all ownership of the facilities funded under this bid.
Under private sector financing, the supplier owns the facilities, at least for the period of the concession contract that the supplier agrees with the local authority. Ownership at the end of the service contract, after say seven years, depends on the terms of the contract. Some examples of similar contracts allow for the equipment to be transferred to a new operator or, on default, to the local authority, for a value depending on the market value at the time. Other examples only require that equipment transfers to the local authority.
Information for All will appoint a project manager and oversee the project. It will act as the national public sector body which:
Further information on Information for All is in sections B1 and B2.
Local library management depends on who funds the installation.
For public sector funding, the local authority will contract for installation and operational services such as telecommunications. A project manager is expected to manage the installations throughout the authority. The local head of a library will normally manage the operation. The local authority may possibly contract out the local library operational management.
For private sector funding, the supplier will undertake to both install and run the service, under the concession agreement it makes with each local authority. The supplier will arrange for all the subcontracts it needs. It will deal with Information for All for Millennium funding via the local authority.
Revenue costs depend on whether the public or the private sector finances and runs the operations. The private sector will spend more money on staffing to sell the service it can charge for. Information for All's costing model predicts the following revenue costs, for an average of 10 terminals:
| Public Funding | Private Funding | |
| Staffing | £9.6k | £20.5k |
| Communications | £7.3k | £7.3k |
| Hardware upkeep | £4.2k | £4.2k |
| Software upkeep | £0.3k | £0.3k |
| Consumables | £0.8k | £0.8k |
| Accommodation | £2.3k | £2.3k |
| Training | £0.2k | £0.2k |
| Total | £24.7k | £35.6k |
| Total for 4,244 libraries | £104.9m | £150.9m |
| Central management | £0.2m | £8m |
| Total revenue costs | £105.1m | £158.9m |
Revenue costs allow for a continuous refreshment of technological assets for long-term sustainability. Local authorities may also maintain their IT investments by re-leasing, further capital investment and by attraction of external further funding. Experience has shown that initial investment acts as a catalyst to maintain and grow technology. For example, initial open learning experiments have been expanded and funded to provide a wider range of support to the independent learner.
For the public funding case, charges are expected to bring in some 73% of the costs, requiring 27% as a revenue subsidy to be made up by the local authority, approximately £28m in total, or £6.6k per library.
In the private sector funding case all revenue costs are made up by charging users for other services, apart from free Internet access.
With the roll-out given in the development timetable in section
B, Information for All's calculations for total annual revenue
costs are:
| Public Funding | Private Funding | |
| 1998 | £12m | £18m |
| 1999 | £61m | £91m |
| 2000 | £99m | £150m |
| 2001 and beyond | £105m | £159m |
The main way of meeting these revenue costs is by charging users (see below). For the public funding case, charges are expected to bring in some 73% of the costs, requiring 27% as a revenue subsidy to be made up by the local authority, approximately £28m in total, or £6.6k per library. The authority will make up the subsidy from the same sources as it would for capital funding described in section C3.
In the private sector funding case all revenue costs are made up by charging users. Small sites will probably be unprofitable and the local authority can come to an agreement with the supplier to subsidise them with the profits of the larger sites.
Added value services may be charged for. Examples are:
Information for All has analysed the market for these
services to predict national future volumes and values. This
market analysis provides the source of income projections. A publicly
run operation will bring in £18k on average. The private
sector's more commercial approach will bring in £44k on average.
Nationally, Information for All predicts annual income from user
charges:
| Public Operation | Private Operation | |
| 1998 | £12m | £32m |
| 1999 | £48m | £111m |
| 2000 | £72m | £164m |
| 2001 | £78m | £184m |
| 2002 | £76m | £186m |
Predictions for 2003 and beyond depend on increasing demand through the availability of new services, on reduced communications charges, on increasing competition from, for example, home interactive TV's, and on what the libraries do next. It is reasonably safe to predict that overall levels of library income will not change substantially, even though the components of income will vary.
A typical charge is £5 per hour for general terminal usage, more for specialist functions.
Surplus funds from public run sites will go to subsidise unprofitable sites within a local authority's boundaries. The same will apply to privately run sites, except that the private sector expects an overall net profit to justify its investment and to make a return to its shareholders commensurate with the risks. The private sector can expect an operating profit around £6k per library on average, or £26m pa in total, which will go towards repaying capital and be sufficient to justify the investment.
For the case of possible excess profits, Information for All will investigate whether a profit claw back is suitable. This will be discussed with the Millennium Commission in order to decide whether it ought to be negotiated at the national or local levels.
An endowment fund is not needed.
Public appeals are not generally expected for capital financing. They may instead be used for specific projects using the network, i.e. for content, which is outside the scope of this bid.
None is anticipated.
(All figures £m)
| F1 | Cost of assets | 0 |
| F2 | Cost of external works | 4.0 |
| F3 | Construction/development cost | 99.7 |
| F4 | Cost of other supplies, products, services | 12.0 |
| F5 | Professional fees | 12.0 |
| F6 | Funding cost | 11.3 |
| F7 | Non recoverable VAT | 0 |
| F8 | Total capital cost | 139.0 |
| F9 | Committed amount | 0 |
| F10 | Partnership contribution | 89.0 |
| F11 | Capital funding | 0 |
| F12 | Millennium Commission contribution | 50.0 |
Revenue costs are provided for both public and private
funded cases, to show the range of possible operating conditions.
| public | private | ||
| F13 | Annual running cost | 105 | 159 |
| F14 | Post project funding cost | 0 | 0 |
| F15 | Total annual revenue cost | 105 | 159 |
| F16 | Annual income from charging | 77 | 185 |
| F17 | Annual income from partners | 28 | 0 |
| F18 | Annual income from endowment | 0 | 0 |
| F19 | Net annual income/deficit | 0 | 26 |
| F20 | Annual Millennium Commission grant | 0 | 0 |
| F21 | Total annual revenue cost | 105 | 159 |
![[Why...?]](../../images/whybut.gif){kind=small}
| ![[Bid Info]](../../images/bidbut.gif){kind=small}
| ![[Surf Family]](../../images/surfbut.gif){kind=small}
| ![[Future Libraries]](../../images/futurebut.gif){kind=small}
| ![[Kids 2000]](../../images/kidsbut.gif){kind=small}
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© Information for All
For questions or comments, please contact informall@la-hq.org.uk
URL:http://www.ukoln.ac.uk/informall/bid/directors/dempsey-lorcan.html
Last revised 13th November 1996
Website by Sarah Ormes and Isobel Stark of UKOLN