Guidance

Stage 1: defining your function

Published 28 March 2017

1. Overview

The investigation process should always start with defining your library service’s future function. You should do this before you start to consider the preferred delivery model and legal form for your service. Form follows function! The diagram below demonstrates the thought process you should undertake to arrive at your preferred legal form and status, with the stage process outline within this toolkit supporting you to arrive at both.

How to arrive at your preferred legal form and status

By developing the service’s function (usually in consultation with the council, staff, library users, community groups, Friends Groups and other relevant stakeholders), the library service has the opportunity to demonstrate how it will deliver the library strategy.

An important lesson was that you need to be clear about what your new organisation will do before you can determine what type of organisation and legal form would be most appropriate. We did a lot of work to define the purpose and operation of the new organisation before we even started to look at structure. Many stakeholders will want early clarity on legal form but it’s important to resist taking a position too early before you’ve got a thorough understanding of what your organisation will do.

Libraries Unlimited

It is worth differentiating between a library strategy and the delivery plan for the library service. The library strategy will most likely be developed and shaped by the council and will define the council’s duties to be met through the library service and the value of libraries. The delivery plan should demonstrate how the service will deliver this library strategy.

The Libraries Strategy was an overarching strategy which included the option to consider alternative operating models amongst many other aspects of service development. Consultation of the alternative delivery model mainly came through the budget consultation when the alternative model was linked to hard cash savings. This enabled the process to move forward and for investment in development of the approach.

Inspire Culture, Learning and Libraries

By understanding the library service’s intended future function, the service and council will be well placed to identify the preferred delivery model (during the options appraisal stage) and legal form (during the business planning stage).

There are so many different forms and it can be overwhelming, so don’t think about the legal form. The important thing is clarity of purpose and vision. Knowing what you want to achieve will inform which legal form is right for you.

York Explore

The risk of deciding on form before function is that you select a structure which doesn’t allow you to deliver your strategic objectives effectively. This is because of the specific characteristics of each legal form. Each legal form offers certain opportunities and restrictions, in terms of commercial flexibility, stakeholder representation and the required use of assets (not an exhaustive list). By selecting a legal form before fully defining the library service’s function, you may be storing up problems for the future. Therefore, we strongly recommend that you always consider function before legal form.

2. Needs analysis

A library strategy is usually informed by a comprehensive needs assessment. At local level, councils need to take a strategic, long-term approach to transforming their library service to strengthen its organisational and financial resilience. Decisions should be made based on an assessment of need as defined by the community and library professionals.

Our public consultation in 2014 gave us a clear steer that we would benefit from finding a way to bring the passion and commitment of our staff and communities into the governance of our organisation. The mutual concept fitted this - and there are various legal forms that allow you to be a mutual.

Libraries Unlimited

Our library strategy confirmed what the council’s legal duties were and why, and then went on to inform the specification to the new provider. The specification was informed by the consultation which preceded it in 2011 with an evidence base on what Suffolk people wanted.

The clarity of why libraries are where they are, what the framework is for deciding on a static or a mobile library and what they do was very helpful. The new organisation could then take these on and extend them.

Suffolk Libraries IPS

See planning public library services to meet local needs for more information.

The LGA published a guide entitled ‘Creating future libraries’ designed to provide a simple self-assessment tool aimed at councillors, corporate managers and library managers. It can help you undertake a review and successful change process in your library services based on the lessons from the Future Libraries Programme.

This link provides details on how to undertake the design and discovery stage in relation to assessing need and developing a library strategy.

A case study demonstrating how Hampshire County Council undertook an extensive needs assessment and consultation exercise to inform the development of a new library strategy can be found here.

3. Defining your function

Informed by the needs assessment, the library service should consider how it will deliver the library strategy. This is referred to as the library service’s function.

The diagram below shows several important issues that you should consider. While it may not be possible to develop a detailed understanding of all of these issues, it is important that you consider as many of the issues as possible when developing your library service’s function.

Issues to consider when looking at organisational form

Each issue is examined in detail below.

4. Services

4.1 Service profile

The service profile is informed by the needs assessment and the priorities in your library strategy. Identify which services should:

• continue as they are
• be redesigned to meet need more effectively or make better use of resources
• be reduced in their scope and scale
• be designed from scratch to meet emerging or anticipated needs

Use the service definition template to assist you in considering your future service profile,

4.2 Growth strategy

The growth strategy is informed by the financial constraints faced by the library service and the answers to the above questions. Consider:

• the level of new income that will need to be generated by the library service to offset reductions in funding
• whether there is sufficient evidence to confirm that growth in existing services or the development of new services will lead to increased income generation
• the potential level of revenue that can be generated from existing or future services

It is also worth considering how these services will be delivered:

• will they be delivered solely by the library service, or via a network of volunteers, delivery partners or sub-contractors?
• would a joint approach to delivery involving other public bodies or voluntary and community sector organisations help to deliver against the priorities outlined within the library strategy?

We have a 2020 strategy that outlines our plan to:

• continuously strengthen our digital offer, working on new content creation, services and partnerships
• continue to diversify our business, seeking out ways to stretch our brand, work in partnerships on new services which have a wellbeing, literacy or business focus
• make the library offer even more relevant to young people
• develop effective succession planning mechanisms, including leadership development at every level

Suffolk Libraries IPS

To help you develop your growth strategy, the following templates have been developed:

• customer market overview
• competitor market overview
• partner market overview

4.3 Operating model

The operating model is informed by the growth strategy - you should consider what changes need to be made to the library service’s operating model. You may find it helpful to think specifically about the following questions:

• would the current staffing structure enable the service to deliver your service profile and growth strategy?
• what changes would need to be made?
• will these changes result in staff being moved to different service areas, new staff being employed or staff being made redundant?
• will the service’s current premises footprint effectively support the delivery of services, or does this need to change?
• do the library service’s current back-office arrangements need to change to enable the service to successfully deliver against the priorities in the library strategy?

4.4 Branding

Important branding issues to consider include:

• how do you want your library service and delivery model to be perceived?
• are there important opinion formers/stakeholders for whom organisational form will be influential in forming a view of your new delivery model?
• could you gain a competitive advantage through your choice of legal form or status?

5. People

5.1 Staff

Transferring staff from the council to a delivery model must be done in line with TUPE regulations. This includes consulting staff on the proposed changes in advance of being transferred to the new organisation.

5.2 Ownership

Important ownership issues to consider at this stage include:

• do you want the new delivery model to be autonomous or will the council continue to have a stake (either in terms of governance or ownership)?
• who will own the new delivery model - potential owners may include library staff, the council, Friends Groups, library users, community groups
• what are the anticipated benefits of various stakeholders assuming some level of ownership or influence?

5.3 Stakeholder involvement

Ownership of a service is only one way of stakeholders being represented within an organisation. Important issues to consider include:

• do you want to involve other stakeholders (for example service users) in the governance of the new delivery model?
• what are the potential benefits associated with stakeholders being in a position to influence the strategic direction of the delivery model, possibly via the library service’s governance model?
• who might those stakeholders be and how will you involve them?
• do you want a democratic one-member one-vote structure or should there be the opportunity to invest more and receive more return/more control?

5.4 Organisational culture

Your case for change may have identified the need for the library service to develop a new organisational culture. Meeting the challenges facing your service will involve delivering differently on several levels. How staff and other stakeholders influence decisions and the way the service operates will be as important as deciding what type of legal form is assumed by the service. Important issues to consider include:

• how would you describe the culture you would like to create within your new delivery model?
• how will you involve the staff, Friends Groups, library users, community organisations and other stakeholders?
• what values will underpin your new delivery model?
• what is the intended future role of staff?

It’s important to consider organisational culture early on. Being outside a council as an independent organisation enables you to think differently about every aspect of your organisation. Early on, we did quite a lot of work with our staff and Friends Groups about what qualities we wanted to take with us from our existing service and what we wanted to leave behind. Unsurprisingly the general consensus was to take all the positive values that underpin our library service and to leave behind any necessary bureaucracy!

Those sessions were important in helping us build a shared vision of our future but of course building a new organisational culture takes time. It will be something we work consciously at in the coming months and years as we shape our new organisation.

Libraries Unlimited

6. Financial

6.1 Sources of income

In addition to the core contract held with the council, what other sources of income would you be looking to access? These sources may include:

• traded income, through the selling of services and/or products to third parties
• contract income, through successfully tendering to deliver services (for example to public bodies)
• external grant income (this may be restricted to certain types of organisations, for example social enterprises or charities)
• social investment

6.2 Use of surpluses

Should your library service generate surpluses or realise underspends in future years, you will need to make a decision about how these surpluses are used. If the library service has social enterprise or charity status, there will be restrictions on how surpluses can be used. Possible options for the use of surpluses include:

• reinvesting surpluses as a way of promoting innovation and needs led services
• enabling the council to claw back a proportion of the surpluses generated
• channelling a proportion of surpluses into a reserve account, thus helping to improve the sustainability of the delivery model
• distribution of surpluses to others, for example private individuals (to a limited extent)

The [next section](https://www.gov.uk/government/publications/libraries-alternative-delivery-models-toolkit/stage-2-the-case-for-change covers the second stage of the process - considering the case for change