Privatization of library services

Short description of the problem: Privatization of  library services (Contract management) to increase their quality.
Country: USA
Type of local government: County
Name of local government: Riverside County
Years of operations: 1997 – present

Detail description of the problem

Riverside County had exactly the same problems that cause local authorities everywhere to cut back on service. Cash had been taken out of the libraries budget to meet the more electorally sensitive needs of the county. Book purchases and opening hours were being cut in order to save money.

Detail descriprion of the solution strategy

Riverside County decided to solve the libraries´ problems by transfering a part of the operations it had been in charge of. Therefore it offered a new contract in a competition open to both public and private bidders. The contract was signed with LSSI company (Library Systems and Services inc.) for 5,3 mil. USD annually to run the county´s 25-branch library system. LSSI which offers variety of library services (cataloguing, purchasing, automation etc.) promised 25% increases in library hours and  in the book purchasing budget. Signing the contract with a private company the county was expecting LSSI to do more with less money because it is more efficient and has lower overhead. Moreover, if the county´s administration could have afforded to run into debt, LSSI can not – they would generate its profits only by keeping its costs lower than the 5.3 mil. USD contract payment.

Description of the results

In one year time, circulation – the number of books and other items lent out – increased by 10%. LSSI has also expanded library hours by 34%, doubled book purchases, increased staff by nearly 50%, and maintained salary levels. Other improvements such as more Internet terminals at the libraries and better phone-up library reference service occured, too. The results proved the library service to be managed very effectively by private concerns without compromising its ethos and integrity.

Sources:
http://www.adamsmith.org/80ideas/index.htm
www.privatization.org

Peter Tóth

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