Draft Public Bodies (Abolition of the Registrar of Public Lending Right) Order 2013
The Committee consisted of the following Members:
† Ellis, Michael (Northampton North) (Con)
† Hemming, John (Birmingham, Yardley) (LD)
† James, Mrs Siân C. (Swansea East) (Lab)
† Jarvis, Dan (Barnsley Central) (Lab)
† Jones, Graham (Hyndburn) (Lab)
† Jones, Mr Marcus (Nuneaton) (Con)
† Kwarteng, Kwasi (Spelthorne) (Con)
Lammy, Mr David (Tottenham) (Lab)
† Leech, Mr John (Manchester, Withington) (LD)
† Macleod, Mary (Brentford and Isleworth) (Con)
† Morgan, Nicky (Loughborough) (Con)
† Morrice, Graeme (Livingston) (Lab)
† Neill, Robert (Bromley and Chislehurst) (Con)
† Nuttall, Mr David (Bury North) (Con)
Shannon, Jim (Strangford) (DUP)
Smith, Mr Andrew (Oxford East) (Lab)
† Vaizey, Mr Edward (Parliamentary Under-Secretary of State for Culture, Media and Sport)
Grahame Danby, Committee Clerk
† attended the Committee
Sixth Delegated Legislation Committee
Wednesday 17 July 2013
[John Robertson in the Chair]
Draft Public Bodies (Abolition of the Registrar of Public Lending Right) Order 2013
2.30 pm
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr Edward Vaizey): I beg to move,
That the Committee has considered the draft Public Bodies (Abolition of the Registrar of Public Lending Right) Order 2013.
It is a pleasure to serve under your chairmanship, Mr Robertson, sporting a new summer haircut. [ Laughter. ]
The Government are proposing to use the powers in the Public Bodies Act 2011 to abolish the registrar and transfer its functions—the public lending right functions—to the British Library. Both the registrar and the British Library are non-departmental public bodies of my Department.
The 2011 Act, which received Royal Assent in December 2011, was the legislative vehicle that resulted from our review of all public bodies, which we undertook in 2010. The aim of that review was to increase transparency and accountability, cut out duplication of activity and stop unnecessary activities. In conducting individual reviews of their own public bodies, Departments were first asked to consider the overarching question of whether a body needed to exist and whether its functions needed to be carried out at all and, following on from that, whether it met specific tests that would justify its retention.
My Department’s view was that the PLR functions were essential—they are required by law in any event—but that it was not necessary for the registrar to be retained as a stand-alone public body to carry out those functions. Therefore options for a suitable and more efficient and economical home were explored.
I shall give some background, which I know colleagues will welcome, on the public lending right scheme and the public body currently managing it, formerly known as the Registrar of Public Lending Right. The position of registrar was established by the Public Lending Right Act 1979, which gave authors a legal right to receive payment for the free lending of their books by public libraries. Under that Act, funding is provided by central Government and payments are made to eligible authors and other rights holders in accordance with how often their books are lent out. That is worked out by taking a sample of UK public libraries.
The registrar is a corporation sole and is appointed by the Secretary of State for Culture, Media and Sport to maintain a register of eligible rights holders and books and to supervise the administration of the scheme. Some 23,000 rights holders, otherwise known as authors,
receive a PLR payment each year, up to a maximum of £6,600. So only a modest contribution is made to J K Rowling’s income.The registrar receives grant in aid from the Department to fund both the administration costs and the payments to authors. Given the current economic climate, the decision was taken in October 2010 to reduce the resource grant in aid budget for PLR by 15% in real terms over the spending period—a cut that was lower than the overall cut to our Department, I hasten to add—and the proportion of grant in aid used to administer the scheme was capped at £756,000.
With the registrar currently operating at near-maximum efficiency, and given the limitations and efficiency savings a body of its size could make, we had to do some radical thinking for the PLR scheme to operate within its new budget. Transfer of the PLR functions to the British Library emerged as the preferred option for various reasons: it fulfils the aims of maximising the efficiency, economy and effectiveness of the PLR scheme; it reduces the number of public bodies; and it transfers the PLR to a much larger organisation that is nevertheless still focused on the same group of stakeholders.
The transfer offers greater efficiency savings than would be achieved by the PLR operating on its own. We estimate that it will save £750,000 in real terms over 10 years, which will have a real impact, because the more money that is saved, the more money that can be allocated to authors under the public lending rights scheme.
The transfer, which is low risk, will retain the operation and work force in Stockton-on-Tees. They are working well at present and are highly valued by the people who responded to our consultation. The increased efficiency and economy of the scheme will benefit PLR rights holders. Furthermore, the transfer will not only ensure continuity of efficient systems and processes, but will develop a more solid infrastructure, which the larger organisation enables.
Subject to Parliament’s approval, the abolition of the registrar and the transfer to the British Library are expected to take effect on 1 October 2013. The current postholder of the registrar appointment will be contracted by the British Library from the transfer date for a transition period, which is likely to last until March 2015, to ensure a smooth transition to the new arrangements. I pay tribute to the registrar, Dr Jim Parker, whose reputation is of immensely high standing particularly with the author community for which the PLR is designed.
I will dwell briefly on the scrutiny that the order has received. It was laid before Parliament on 9 May. Such orders have a maximum of 40 days scrutiny, which a Committee of either House may extend to 60 days. Several Select Committees have discussed the order: the Culture, Media and Sport Committee, the Secondary Legislation Scrutiny Committee and the Joint Committee on Statutory Instruments. None of those Committees triggered the optional 60-day extended scrutiny period.
The Culture, Media and Sport Committee raised several concerns in a report published at the end of June. First, it pointed to the volume of responses to the public consultation and the opposition that was expressed. The majority of respondents believed that the operation should remain unchanged in case the service was disrupted. I share respondents’ confidence in the administration of
the PLR, and I agree that the PLR office provides an effective service for authors. It is important to note that at the consultation stage, we were not yet able to set out how and where the British Library would operate the PLR, which raised concerns about the future of the office in Stockton-on-Tees. We have since made it clear that, first, all PLR staff will transfer to the British Library at the transfer date on TUPE terms and, secondly, the PLR operation will continue at Stockton-on-Tees for at least the next five years, at the end of which the British Library will be able to review the effectiveness of the arrangement. We agree that the PLR office currently works well as a small and dedicated body. We consider, however, that by keeping the operation in Stockton and transferring the management role from the registrar to a new head of the PLR only after an 18-month transition period following the transfer, we will be able to maintain the effectiveness of the running of the scheme and achieve the efficiencies that we seek.There will be a handover period between the registrar and the new head of the PLR, during which any management and operational issues will be worked through. We think that the new management role at the British Library will ensure that the PLR is represented in British Library management but retains its identity as a dedicated function carried out by experienced and knowledgeable staff. Several significant advantages come from being part of a larger organisation. For the PLR, those will include, for example, a more solid infrastructure, which will help to future-proof the running of the scheme.
Some respondents to the consultation asked why the Government wanted to change the status quo. The proposal to transfer the PLR function to the British Library is motivated by the increasing demand for the registrar to deliver efficiency savings and the limitations for a body of its size on doing so. The Committee also noted that the registrar had successfully kept operating costs below the cap that we set for the spending review period and reduced running costs to £687,000 from 2014-15 onwards, which represents a 9% saving. By transferring the function to the British Library, however, we will achieve an additional saving of 24%. In effect, that will reduce running costs by a third below the cap that we have set and bring them down to slightly more than £500,000 from 2018 onwards. Such savings in running costs are not insignificant for a body of the size of the PLR, and it is prudent to pursue them for the benefit of authors.
The Secondary Legislation Scrutiny Committee reported on the draft order on 23 May, and it was satisfied that the order met the four tests set out in the Public Bodies Act, noting in particular the strong case of increasing economy. The Act states:
“A Minister may make an order…only if the Minister considers that the order serves the purpose of improving the exercise of public functions,”
having regard to four elements, one of which is securing accountability. We think that the order does that by amending the British Library Act 1972 to stipulate that the annual report will include a report on the PLR scheme. The second element is efficiency, which the order achieves by enabling the more efficient running of the PLR scheme through a larger NDPB, with all the advantages of shared back office services and economies of scale. The third is effectiveness, which will be maintained
because authors will continue to receive the same high-quality service already provided by the PLR scheme. The fourth is economy, which I have laboured over already in my remarks.The Committee recommended that the Department should carry out a review of the effectiveness of the post-transfer arrangements in the spring of 2016, which is within a year of the transition period’s end. Lord Gardiner was pleased to confirm in a debate in the other place that the Department will carry out the review in spring 2016.
My Department remains fully committed to the public lending rights scheme. It is a source of valuable income for many authors and other rights holders. The value that I and my colleagues place on the PLR was shown in the Chancellor’s spending round. First, he made it clear that he would extend the PLR to on-site loans of e-books and audiobooks, on which authors have long campaigned, with effect from July next year. This was perhaps not noticed enough, but in a round where Departments had to make further spending reductions to tackle the deficit, the PLR received a cut of 0%. Its funding was maintained at 2014-15 levels in cash terms for 2015-16. That is an excellent result and illustrates the commitment of my Department and the personal commitment of the Chancellor to this important scheme. The PLR will, of course, have to continue to evolve with technology advances in public libraries. We are committed to ensuring that the scheme continues to be managed as efficiently and economically as possible, for the benefit of authors.
In challenging economic circumstances, the transfer offers the best means of safeguarding the future of the scheme and maximising the proportion of available grant in aid to be distributed to authors, thereby supporting and rewarding their creativity while offering maximum value for money to the taxpayer. It is therefore right that the functions should be transferred to the British Library, and I commend the order to the Committee.
2.42 pm
Dan Jarvis (Barnsley Central) (Lab): It is a pleasure to serve under your chairmanship, Mr Robertson. I thank the Minister for his opening remarks. I join him in paying tribute to the work of the registrar, and I welcome his confirmation that the Department will review the decision in 2016.
I am pleased to have the opportunity to highlight the work of the registrar and the importance of the public lending right, which ensures that authors receive remuneration for the loans of their books from public libraries. The registrar and his nine members of staff deliver those payments to the more than 23,000 writers, illustrators, translators and editors whose work has contributed to the library books that are taken out each year. In 2012, £6.5 million was distributed, equating to a rate per loan of just over 6p. Before reviewing the details and concerns about the abolition of the registrar, it is important to note that the PLR is a vital bridge between authors and the thousands of people who take out library books each day. It ensures that authors receive remuneration for their work. That is particularly important for those authors whose books are sold mainly to libraries and those whose books are no longer in print, but are still being read. The importance of the
PLR led to calls to extend it to cover audiobooks and e-book lending, and I welcome the Minister’s recent action on that front. In an increasingly digital world, it is vital that we amend the PLR to recognise the work of authors in digital, audio and hard copy formats.Following a useful meeting I had with the Minister last year, a review was commissioned and led by William Sieghart, and I am pleased that the Minister has chosen to implement his recommendations on extending the PLR scheme to e-book lending on site.
Governments of all colours must always strive to achieve better value for money from the public purse. It is right that this Government look to streamline or merge public bodies where it is sensible to do so.
During Labour’s time in office, we reduced the number of public bodies from 1,128 to 766—a reduction of almost a third. However, in this particular case, as the Minister knows, there have been some concerns about the abolition of the registrar and the transfer of the PLR functions to another body.
The public consultation received 1,015 responses of which 948 were against the proposal; 740 of those respondents were PLR holders. Although the abolition of the registrar will not be put to a vote today, I hope that the Minister can respond to the concerns about transferring the functions of the PLR to another body. At present the registrar operates with nine members of staff in Stockton-on-Tees. While the position of the registrar will be abolished, the remaining staff will be incorporated in the existing public body, the British Library, which will administer the PLR.
Concerns have been raised about the threat of a disrupted service and a delay in payments during the transition, owing to a potential lack of experience within the existing body. I am grateful for the comments the Minister has made to allay some of the concerns that people may have. He will be aware that the children’s author, Malorie Blackman, recently stated:
“The PLR office is a lean, mean, effective machine which does its job brilliantly with very few staff.”
The PLR currently operates with high efficiency because it is administered by a small, discrete body with a clear task focus. When that function is absorbed into the British Library, mechanisms need to be in place to guarantee that efficiency is continued. I am again grateful that the Minister said something today about how the system might work in practice, but there is still potential for some disruption during the transition while any new staff are trained and a new management structure is incorporated. The issue may be further complicated as the Government intend to extend the PLR to cover e-books, a move we strongly support.
The current registrar is extremely active in promoting PLR and increasing efficiency by running international schemes. Reciprocal arrangements with other countries where the UK is a net beneficiary need to be strategically and efficiently managed. We all have great respect for the British Library, but it does not seem to be contemplating replacing the registrar with a full-time, high-level successor; the necessary expertise and strategic direction risk being lost if the process is not managed in the right way. Can the Minister tell us what plans there are to minimise the disruption and ensure a successful transition and extension?
As has already been mentioned, the Culture, Media and Sport Committee and the Society of Authors have both raised concerns about transferring the functions to the British Library. The British Library is a world-class institution, which provides cultural and intellectual resources for the public. Every year, 6 million searches are generated through its online catalogue and there are nearly 400,000 visitors to its reading rooms. Its stated purpose is “advancing the world’s knowledge” and there are some concerns that this may lead to a conflict of interests in administering the PLR.
The current office exists to deliver a single function: administering the legal right in favour of authors. This gives it a focus that may be difficult for the British Library to achieve as it does not fit neatly within the library’s overall aims. Its position on widening free access to literary works may fall into conflict with the aims of the PLR to ensure that authors receive payment for the use of their copyrighted work. I am sure that all those issues can and will be resolved with the correct level of oversight. Clearly they are matters that should be considered when the Department reviews the decision in due course.
As the Minister said, the Government estimated that the transfer of the PLR function will result in a saving of £750,000 over a 10-year period. As identified by the Select Committee, the registrar currently operates at near maximum efficiency, with running costs below the £756,000 per annum cap and further identified savings that will reduce those costs to £687,000 by 2014. However, a combination of the inevitable costs of a transfer and the potential costs that may be incurred following the loss of the expertise of the registrar, and the additional volume of work following the extension to audio books and e-books, which we strongly support, raises some concern about whether the savings will be delivered.
The aim of reducing the number of public bodies should be to increase the efficiency and expertise of public functions—I welcome the reasoning behind the measure—but effective scrutiny must always be carried out to ensure that the aims of any change deliver the intended results. Without careful management, the Government’s plan to abolish the registrar and transfer the functions of the PLR may have the opposite effect to the stated purpose of increasing efficiency and expertise.
It is clear that the registrar and his staff are doing their jobs well. They are operating within budget and they received constant praise during the consultation. Therefore it is unfortunate that as the Government extend the PLR to audio and e-books, they are subjecting the function to such upheaval. I hope that the Minister will deal with the genuine concerns that have been raised—he has gone some way towards doing so already—and satisfy all Committee members that he will ensure that the PLR continues, unhindered, and with the same level of expertise and efficiency.
2.51 pm
Mr John Leech (Manchester, Withington) (LD): It is a pleasure to serve under your chairmanship, Mr Robertson.
I put on record my thanks to the registrar for doing a great job in keeping down costs at a time when everyone is expected to tighten their belt. I think that all Committee members accept that the body has done a great job of cutting costs in recent years. The transfer of responsibility should not be regarded as any reflection on its ability to
cut costs, because clearly it has done a good job in difficult times. However, I raise some concerns mentioned by the Culture, Media and Sport Committee, which originally considered the issue in March 2001, as part of an inquiry into funding the arts and heritage, before I was a member. At that time, the Committee considered that the Authors’ Licensing and Collecting Society was a far more appropriate body for the transferred powers.Although the ALCS is a non-statutory private sector body, the Select Committee recommended that legislative measures could be put in place that would allow the powers to be transferred to the ALCS. I should be interested to hear from the Minister why that was considered as an alternative and why the current proposals were considered better.
I put on record the Culture, Media and Sport Committee’s conclusions on its scrutiny of the draft order, published on 25 June, which made it clear that there was resounding opposition to the transfer to the British Library. The Committee said:
“We continue to believe that the British Library is not a suitable host organisation for the PLR function given its many responsibilities and the risk that these could take priority over the PLR function.
The success of the Registrar of the Public Lending Right is due to it being a small, discrete body whose purpose is focused on the authors and the rightholders which it supports. Much of its success must be attributable to the PLR workforce in Stockton-on-Tees and the way they have been led by the Registrar. We believe that introducing a remote management structure from the British Library’s base in Boston Spa could jeopardise this success.
Additionally, given that the scope for further efficiency, effectiveness and economy is limited, we do not believe there is a strong case for transferring responsibility of this PLR function to the British Library. Accordingly, we conclude that the Government should not proceed with this draft order.”
I am keen to hear the Minister say why the Department decided that it could not transfer the responsibility to the ALCS.
2.54 pm
Mr Vaizey: I thank the hon. Member for Barnsley Central for his contribution to the debate. He put forward some judicious points and emphasised the need to ensure that the transfer goes ahead smoothly and that people’s legitimate concerns are addressed. I also thank the hon. Member for Manchester, Withington for his contribution, particularly given his position as a member of the Culture, Media and Sport Committee.
One of the elements of our debate is the extension of the PLR to e-books and audiobooks. As the hon. Member for Barnsley Central pointed out, that came from the Sieghart review, when we asked William Sieghart and some notable colleagues to look at the question of e-lending. It is important to put on record that we accepted their recommendation. There is a school of thought in the wider world that suggests that PLR should be extended to e-lending however it takes place, whether on-site in a library or remotely to a member of the library service, but we followed the Sieghart recommendations. It is important to stress that the problem we asked William Sieghart to address was how to bring publishers on board with e-lending. People should remember that publishers, who obviously create
the books that are found in libraries, have huge concerns about digital transition. It is therefore important that their business models are not over-disrupted by the introduction of library e-lending, and we have to take that into account when considering the extension of PLR.I also take the point made by the hon. Member for Barnsley Central about the promotion of the PLR internationally. It occurs to me that one of the benefits of being part of the British Library will be the opportunity to promote PLR in different markets. The British Library is a hugely well-respected organisation across the world. It works closely with many nations and is seen as an exemplar of best practice. PLR can be part of the offer that the British Library is able to make to countries with which it is engaging and is a system that it could perhaps establish on behalf of such countries if they do not have a similar scheme already.
The hon. Gentleman pointed out that there could be an inherent contradiction between the British Library looking to widen free access and the PLR being a function that effectively brings in an income, but libraries are also about free access. It is important to point out that the British Library has worked closely, for example, with some private companies not only to ensure that it can digitise its content and make it free, but also to bring in private sector expertise and capital to help make that happen. The British Library is capable of promoting the widening of free access while ensuring that authors get an income from the books they write.
To address the two points made by the hon. Member for Manchester, Withington, we of course considered all possible solutions for a transfer of PLR functions. It is certainly the case that the Authors’ Licensing and Collecting Society came into our thinking and was potentially interested in the proposal. However, one would then be going around in a circle, because for the ALCS to carry out what is in effect a statutory function it would have had to become a quango. I was attracted in principle to the idea of putting authors in charge of PLR, but the bureaucratic obstacles would have been too great. I hasten to add that that is not to say that the British Library is a second choice; we examined all options in parallel and looked at the pros and cons of each, but the British Library came out clearly on top.
As to our decision to proceed, it is important that we ended any uncertainty around our decision on the future of the Registrar of Public Lending Right and that we made a clear decision and put it into effect as rapidly as possible to minimise disruption, which is what most people are concerned about. That gives me an opportunity to pay tribute to Dr Jim Parker and all his staff. He has worked as the Registrar of Public Lending Right for 22 years and by the time he finishes it will pretty much be a quarter of a century. He has given exemplary service, as have his staff, and I can only add my thanks for the exemplary way that he has helped us to effect the transfer we want to make.