Overhearing a conversation about mutualisation, I realised the people three desks down were talking about our libraries. A possible staff buyout (or buy-in or spin-out, or something) was mooted. “A stalking horse for outsourcers,” one of them said. As well as the confusing possibility of another council running our libraries, as if we have lost the energy to run our own affairs. So I popped off and had a look on my phone to see if I could find anything published online that would go into more detail. A report had been published (apparently in March) but I hadn’t seen anything, and I had been looking.
Anyway, there is not much good news in the report. It is essentially a list of options with recommendations, though there is an in-house option (with ‘re-engineering’), and we can at least catch a glimpse of how our technocratic overseers see the world so we can have some idea what to expect. The report said March 2018 but the staff have not been allowed copies (up until very recently), and quite frankly the document is turgid and unapproachable. I don’t expect many people will reach the last of the sixty pages, but doom-laden rumours are flying thick and fast among librarians and library assistants.
It seems the preferred option is a PSM, or Public Service Mutual. There is much talk over whether it will have charitable or non-charitable status, but regardless, it is easier to think of the thing as a sort of charity. If this option passes, our library staff would no longer be council employees but would be transferred to what is a bit like a charity. They will retain their pay, terms and conditions. But the report cheerfully informs us that terms and conditions can be changed post-transfer by a consultation process.
Entertainingly, the report mentions twenty five times that a mutual (and another option, a joint venture) could save on business rates by achieving charitable status, in fact it is significant to how well the options are recommended:
“This option is forecast to realise operating surpluses each year over the 5 year period. The viability of the option is however heavily predicated on the assumption that the service would realise savings through 80% mandatory National Non-Domestic Rate (NNDR) relief. Should the service not benefit from this saving, it is forecast to incur operating losses during the first two years post-establishment”
Does this mean that the council would save money by, er… receiving less money from rates?
Now, I know I’m going to get comments telling me I’m a dullard who doesn’t understand tax law. But the fact remains that these options are attractive because they pay less tax. Or might do if they get charity status… If.
The rate relief is an option for two of the proposed options: mutual and joint venture. Regardless of the irony of such savings, failing to achieve charitable status, which is not at all certain, the report goes on to say:
“Such a situation obviously brings the viability of either option into question.”
“The scoring of the PSM (charity) and joint venture (charity) options is informed by the assumption that the new model would benefit from NNDR. Charitable status should not be automatically assumed, given the complexity of the application process and the strict criteria that any applicant is required to meet.”
It was late last year that full council agreed, with cross party support, to look at mutualisation. Of course, the right wing of the Labour party have been pointing out that that vote was not binding, but they did find it difficult to contain their glee at the interesting possibilities. After all, the mayor can pose the question: the people of Bristol have spoken through their representatives, who am I to get in the way of democracy? Privatisation or a spin off of Bristol libraries could then be blamed on everybody and not just him.
Likewise, if there is an effective wave of protest, the elected mayor can then point out that that is the point of having an elected mayor, to overturn the narrow interests of ward councillors and consider the needs of the entire city. This will make himself appear like he is listening. Win win, I would say.