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

Detailed description of the problem

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

Detailed description of the solution strategy

Riverside County decided to solve library problems by transferring a part of the operations it was in charge of. Therefore, it offered a new contract in a competition open to both public and private bidders. The contract for USD 5.3 million annually was signed with LSSI company (Library Systems and Services Inc.) to run the county‘s 25-branch library system. LSSI, which offers a variety of library services (cataloguing, purchasing, automation etc.), promised 25% increases in library hours and in the book purchasing budget. By 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 costs. Moreover, if the county‘s administration was able to afford to run into debt, LSSI cannot – it can generate its profits only by keeping its costs lower than the USD 5.3 million contract payment.

Description of the results

Within a year, the circulation – the number of books and other items lent out – has 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, were also made. 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