REPORT ON THE PUBLIC LENDING RIGHT SCHEME

1999-2000

BY THE SECRETARY OF STATE FOR CULTURE, MEDIA AND SPORT

INCORPORATING THE REGISTRAR'S ANNUAL REVIEW

Presented to Parliament pursuant to section 3(8) of the Public Lending Right Act 1979

December 2000

The Secretary of State's Report is © Crown Copyright, 2000.

(Applications for reproduction should be made in writing to The Copyright Office, HMSO, St Clements House, 2-16 Colegate, Norwich NR3 1BQ.)

The Registrar's Annual Review is the copyright of the Registrar of Public Lending Right.

(Permission is hereby given to reproduce pages or sentences of the Annual Review provided the source is acknowledged and the Registrar notified.)

First published December 2000

ISBN 0-952-52916-5

ISSN 1461 5592

Published by: Registrar of Public Lending Right Richard House Sorbonne Close Stockton-on-Tees TS17 6DA

Telephone: 01642-604699 Facsimile: 01642-615641 E-mail: [email protected]

Copies of this Report are available from the Registrar at the above address at a cost of £2.80 including postage.

CONTENTS

Page

REPORT BY THE SECRETARY OF STATE FOR CULTURE, MEDIA AND SPORT ON THE PUBLIC LENDING RIGHT SCHEME 1999-2000 1

REVIEW OF THE PUBLIC LENDING RIGHT SCHEME BY THE REGISTRAR

1. INTRODUCTION 3

2. REVIEW OF PERFORMANCE 1999-2000 5

Table 1 Five Year Comparisons 1995/96 - 1999/2000 8

3. SERVICE TO AUTHORS 9

(a) PAYMENT CALCULATION AND DISTRIBUTION

(b) IMPROVING THE SERVICE

Table 2 How authors learn of PLR’s existence 12

4. LOANS SAMPLING 14

(a) DATA COLLECTION

Table 3 Sample Library Authorities July 1999 - June 2000 15

(b) SUPPORTING THE LIBRARY SERVICE

Table 4 Loans of Registered Books by Category 20

5. ADVISORY COMMITTEE AND REVIEW OF THE SCHEME 21

6. INTERNATIONAL DEVELOPMENTS 26

7. ADMINISTRATION 29

(a) CORPORATE PLANNING (b) STAFF, TRAINING AND DEVELOPMENT (c) INFORMATION TECHNOLOGY (d) ACCOUNTABILITY (e) OFFICE ACCOMMODATION (f) GREEN ISSUES

ANNEX 1 SUMMARY FINANCIAL STATEMENT ANNEX 2 STAFF COMPLEMENT ANNEX 3 ADVISORY COMMITTEE ANNEX 4 AUDIT COMMITTEE

REPORT BY THE SECRETARY OF STATE FOR CULTURE, MEDIA AND SPORT ON THE PUBLIC LENDING RIGHT SCHEME 1999-2000

Last year, we celebrated the success of the first 20 years of the PLR Scheme and, in preparing my fourth report, I have been impressed with the number of positive developments which have taken place this year to enhance the Scheme even further.

I am pleased that my Department has been able, over the past few years, to find extra funding to provide modest increases in PLR’s grant-in-aid which have helped maintain and increase the rate per loan. We realise how important PLR payments are to many authors, even when the sums involved are relatively small. The PLR Scheme fosters both creativity and excellence, and supports my Department’s overall objectives for the encouragement of the creative economy. With this in mind, my Department seriously considered the representations it received both from authors and the PLR Advisory Committee to increase the PLR Fund to take account of inflation over the first 20 years of its operation. Following the Departmental Spending Review, I was pleased to announce on 25 July 2000 that my Department would be increasing the PLR Fund to £7 million with effect from April 2002. I hope this increase will provide a secure basis upon which the Registrar and the Advisory Committee can plan for the future expansion of the Scheme.

I remain grateful to the Advisory Committee for its efforts during the year and would especially like to thank Michael Holroyd, who retired as Chairman of the Committee. Under his chairmanship, there were some extremely successful developments including a thorough review of the Scheme and subsequent recommendations to Ministers on how the Scheme might be made more efficient and cost effective. I was delighted, however, that Clare Francis agreed to take up the reins as Chairman on 7 August 2000 and I very much look forward to working with her.

I was pleased to learn that the PLR Advisory Committee is taking a leading role in implementing the extension of the UK Scheme to authors throughout the European Economic Area to encourage wider recognition of lending rights internationally and to facilitate the development of reciprocal arrangements. I am very supportive of the Registrar’s efforts which enable the UK scheme to take a leading role in the future development of PLR internationally and contribute to what could be one of the most important changes in PLR’s history.

1 PLR has also taken some important steps towards the realisation of its e-business plans during the year including the launch of its international web-site and the provision of e- mail facilities for authors wishing to communicate electronically with the PLR office. PLR’s own web-site was also developed to include information and application forms in three languages in support of the extension of PLR eligibility to European authors from 1 July 2000.

I have been greatly impressed with the way in which the Registrar and his staff have completed a series of major projects this year. Most notably, PLR successfully relocated to Richard House in November 1999. The new office was officially opened by the Arts Minister Alan Howarth on 3 February 2000. PLR has also completed the installation of an upgraded IT system and achieved Investors in People accreditation. Each project has contributed to a thorough overhaul of PLR’s infrastructure aimed at improving the effectiveness of the service it provides for authors. I would like to thank the Registrar and his team for ensuring that this period of considerable upheaval was completed smoothly and without any detrimental effects to the annual rate per loan calculations.

The Rt Hon Chris Smith MP Secretary of State for Culture, Media and Sport

2

REVIEW OF THE PUBLIC LENDING RIGHT SCHEME BY THE REGISTRAR

1. INTRODUCTION

This Review describes the work of the PLR office and the operation of the PLR Scheme during the period 1 July 1999 to 30 June 2000. We had the satisfaction of bringing to a successful conclusion a number of major projects which have occupied our attention over the last three years. In some cases this was achieved in the face of serious problems in the final stages of the projects. That we were successful in the end is in large part due to the hard work and professionalism of PLR staff.

The highlights of the year were undoubtedly the move to new office accommodation in Richard House, and the announcement by Ministers at the end of the year that PLR is to receive a substantial increase in funding from April 2002. There was much disappointment in June last year when our original plans to move collapsed at an advanced stage in negotiations with the landlord. However, alternative premises were found soon after at Richard House and the move went ahead in November 1999. There is general agreement among staff and visitors that the new offices provide a pleasant, secure and functional working environment for our administration of the Scheme.

PHOTO 1

PLR’s new offices at Richard House, Stockton-on-Tees. (Gary Walsh Photography.)

3 It has also been a fruitful year for the PLR Advisory Committee whose report on the future development of the Scheme was submitted to DCMS. The Committee’s two principal recommendations - that the PLR Fund be increased to £7 million and that the Scheme be extended to authors throughout the European Community - both proved acceptable. Ministers’ willingness to allocate an extra £2 million to PLR following the recent government spending review, and the commitment that this demonstrated to PLR, was particularly welcomed by the Committee.

Happily, the announcement of PLR’s new funding came before Michael Holroyd stood down as Chairman of the Advisory Committee. He had worked tirelessly in making the case to Ministers for increased funding, and in raising public awareness of the importance of PLR for authors.

Other achievements described in this year’s Review include completion of the up- grading of the PLR computer system, the resolution of millennium date problems, and the award of Investors in People accreditation.

These and other developments in the operation of the Scheme are described more fully below.

4

2. REVIEW OF PERFORMANCE 1999-2000

We set ourselves the following corporate objectives for 1999-2000:

Management of the Scheme

(i) Maximising the PLR Fund

To manage the PLR Fund efficiently, economically and in line with statutory and audit requirements; additionally, this year, to budget for the costs of replacing PLR’s IT system, and relocating the PLR operation to new offices.

We anticipated being able to free £4,267,000 for distribution to authors and to increase the Rate Per Loan on which payments are based.

Largely Achieved

(As a result of problems outside PLR’s control, completion of the IT project and the move to new offices were delayed, resulting in some higher costs to the Fund. However, the Rate Per Loan was increased to 2.18 pence (2.07 pence in January 1999), and £4,206,345 was distributed to authors. A summary of the payment figures, along with comparative details from February 1996, are provided in Table 1 below.)

(ii) Registering Authors and Books

To administer the Scheme’s eligibility provisions efficiently and accurately, aiming at all times to provide authors with a fair and responsive service.

Achieved

(By the annual 30 June (1999) deadline we had processed all 15,816 applications for book registration, taking the total number of registered authors to 30,674. No complaints about the service were received.)

5 (iii) Collecting and Managing Loans Data

To manage PLR’s library sample and loans data collection procedures in an efficient, cost effective and timely manner with due regard to the legal requirements of the Scheme.

Achieved

(We collected 10.8% of UK loans from our sample of 375 branches in 30 library authorities. Preparations were completed on target to allow eight new authorities to join the sample on 1 July 1999. We further developed the direct electronic transmission of loans data from sample authorities to imp rove efficiency and reduce costs.)

(iv) Calculating and Distributing Payments

To undertake payment calculation, notification of authors of sums due and distribution of payments in a timely, accurate and cost-effective manner.

Achieved

(All loans data collection and annual ‘grossing-up’ procedures were completed successfully and by the specified target dates. Re-designed A4-size payment notifications were dispatched to authors in January 2000, and payments distributed as planned in the first week of February. 17,407 payments were made; of these 96% were made through the BACS system of direct transfer to authors’ bank accounts.)

Getting the Infrastructure Right

(v) Upgrade PLR’s IT System and Achieve Millennium Compliance by 31 July 1999

Achieved

(Millennium compliance was achieved by the target date of 31 July, but due to delays on the part of contractors, completion of the IT system upgrade was postponed until 31 October. However, all PLR’s key business systems were fully operational in time for the end-of-year calculations and payments to authors.)

6 (vi) Relocating the PLR Office

To identify new office accommodation for PLR by 31 March 1999, and to relocate the PLR operation by 31 December 1999 without detriment to the annual payments cycle.

Achieved

(New premises were identified by 31 March but the landlords withdrew their offer of accommodation at an advanced stage in negotiations. Alternative premises were located and the move took place in November.)

(vii) Investors in People

To complete a review of our training, appraisal, planning and other staff development policies with a view to achieving IIP accreditation.

Achieved

(Accreditation achieved in December 1999.)

Planning for the Future

(viii) With the Advisory Committee, agree a strategy with Ministers for the future development of the Scheme

Achieved

(The Committee’s recommendations were presented to the Arts Minister in May last year. They were subsequently given wide publicity by DCMS and feedback was sought from interested parties. Plans were agreed with DCMS to take forward recommendations that were acceptable to Ministers.)

(ix) Finalise PLR’s new 3-year Funding Agreement with DCMS, and implement monitoring and reporting procedures

Achieved

7

Table 1 Five Year Comparisons 1995/96 – 1999/2000

(Fuller details of 1999-2000 expenditure are provided in the summary of PLR’s audited accounts in Annex 1.)

13th Year 17th Year

Payment Date February 1996 February 2000

Expenditure Government Funding £4,936,000 £5,051,000 Operating Costs £606,000 £845,000Å Payments to Authors £4,330,000 £4,206,000 (rounded to nearest thousand) Rate Per Loan 2.00p 2.18p

Registrations Authors (total) 25,503 30,674 Book Interests (total) 243,798 304,769 Interests Registered to ‘New’ Authors 3,658 4,729 Interests Registered to ‘Old’ Authors 13,286 11,087

Sample Book Loans Total UK Loans 550.5m 480.4m Loans Sampled by PLR 24.6m 52.1m (As % of UK Loans) 4.5% 10.8% Registered Loans (estimated) 244m 215m (As % of UK Loans) 44.3% 44.8%

Authors Earnings £5,000 - £6,000 141* 138* £2,500 - £4,999.99 229 241 £1,000 - £2,499.99 647 578 £500 - £999.99 733 747 £100 - £499.99 3,745 3,455 £1/£5 - £99.99† 14,602 12,248 Total Recipients 20,097 17,407 NIL 5,406 13,267 Total Registered Authors 25,503 30,674

Amount Redistributed Due To Maximum Limit (£6,000) £544,290 £470,949 Minimum Limit £797 £15,206

Å Includes the extra costs this year of replacing PLR’s computer system and relocating the PLR office. * Includes payments to 101 authors in 1996 and 102 authors in 2000 where the maximum threshold applied. † A minimum payment of £1 was applied in 1996; increased to £5 from 1998. 8

3. SERVICE TO AUTHORS

(a) Payment Calculation and Distribution

In February 2000 some £4.2 million was distributed to 17,407 authors whose books had been borrowed from public libraries during the year July 1998 to June 1999.

Payments are based on a Rate Per Loan that is calculated annually. The first stage is for the loans data collected from PLR’s sample libraries to be ‘grossed up’ to provide an estimated total figure for loans of registered books nationally. This figure can then be divided into the money left in the PLR Fund for payment to authors after the Scheme’s running costs have been deducted. This calculation produces a Rate Per Loan, which for the February 2000 payments was 2.18 pence, the highest to date.

At a time when all DCMS-funded bodies are being asked to consider how they are contributing to Ministers’ overall aims for the encouragement of the country’s creative economy, it is particularly satisfying to see such a large proportion of the PLR Fund being distributed in amounts that can make a difference to authors’ livelihoods. This year some 73% of the Fund was paid out in sums of £500 or more, and a further 20% was distributed in payments of over £100.

We are at pains to make clear that PLR is not a State hand-out to authors, distributed to those felt to be most in need of financial support. The Scheme exists to remunerate authors for the free use made of their work in libraries by the public. However, PLR does include a safeguard – universally accepted by authors - in the form of a maximum payment threshold to help ensure that the most-borrowed authors do not ‘scoop the pool’. The threshold is currently set at £6,000, and this year 102 authors had their books borrowed sufficiently often to earn the maximum payment. As a result, some £470,000 was clawed back into the Fund to supplement payments to other writers.

At the other end of the scale, the Scheme requires that payments falling below a fixed minimum payment threshold are not paid out. The threshold has stood at £5 for the last three years. Its main purpose is to relieve the PLR office of the administrative and financial burden of making a large number of small payments. Most authors accept the reasoning behind the threshold, but we recognise that some see the non-payment of their PLR earnings as unfair, regardless of how

9 small the amount. As part of its annual review of the payment cycle the PLR Advisory Committee considered the small number of complaints on this subject that had been received. However, Members reaffirmed their support for the threshold. Given the smallness of the sums involved, and the disproportionate costs of paying these out, the Committee felt that it was in the interests of registered authors generally to retain the threshold.

(b) Improving the service

The upgrading of PLR’s IT system during the year provided new facilities which we were able to harness to improve the service we provide to authors. It has enabled us to take back some IT functions that have in the past been contracted out unsatisfactorily. A case in point is the production of the payment statements (or notifications) that are sent annually to all registered authors providing them with details of their registered books, and any loans and payments arising. We have taken the opportunity to introduce some design modifications to make the statements easier to understand. The notifications were successfully printed, packed and despatched by PLR’s Author Services Team. A further modification this year was to copy the notification information onto a CD Rom to facilitate printing duplicate statements when requested by authors, and to avoid the need to store paper copies of all 30,000 notifications.

We made further progress in standardising the layout of the various computer print-outs that are sent to authors, principally the Confirmation of Registration document, despatched whenever a new book is registered. These have been redesigned and are now produced on A4 paper. The advantages for PLR staff include better quality printing on Laser printers, and ease of handling; for authors the documents are now simpler to read and to file. All information sent in paper form to authors is now in a consistent A4 format. The new IT system has facilitated a more general move away from the production and retention of hard- copy records and towards the storage of such information in electronic format.

We are also aware of the Modernising Government agenda, including the (relaunched) Citizen’s Charter programme, with its emphasis on harnessing the latest developments in information and communications technology to make public services more accessible. We noted in our last major survey of authors’ views the growing interest among new authors in the potential for e-mail communication with the PLR office and on-line registration of their books, and in the possibility of direct access to their loans and payment information on the PLR computer. Our new IT Strategy (see Section 7 below) embraces all these issues, and we remain alert to developments in the reliability of ‘digital signatures’ which will be required before we can allow on-line registration. 10 In the meantime we have taken a number of significant steps forward. This year saw the establishment of a PLR web-site (www.plr.uk.com) providing information about the Scheme and its rules; details of recent and forthcoming developments, staff contact details, a version of the PLR application form that can be printed off and completed by authors seeking to register their books; and links to related sites such as those operated by the Authors’ Licensing & Collecting Society (ALCS), the Society of Authors and our sponsoring department, DCMS. ALCS provided much-needed technical assistance in the early stages of designing and launching the site. Other developments have included the introduction of e-mail facilities for all members of staff.

But at the same time we are aware from our regular surveys of authors’ views that there are those who do not have access to a PC or the Internet and who remain comfortable with the more traditional methods of written communication. We shall continue to cater for their needs.

We see the new web-site playing an important role in helping to publicise the existence of the PLR Scheme among new authors. In recent years we have taken a number of initiatives to improve awareness of PLR among authors. As a means of monitoring our success in publicising the Scheme, the PLR registration form now asks first-time applicants how they learned of PLR’s existence. We analysed the responses provided in a sample of 500 forms received between August 1999 and March 2000. The results are set out in the table below.

11

Table 2 How Authors Learn of PLR’s Existence

Source of Information % of Authors

Publisher 28.0 Fellow authors 19.0 Friends, relatives 12.0 ISBN agency 11.0 Authors’ organisations 8.0 Miscellaneous 6.5 Published sources 6.0 Agents 6.0 Local library 3.0 Internet 0.5 100%

The results above highlight the reliance of new authors on word-of-mouth contact with fellow writers and friends, and on information provided by their publisher. Given that publishers provide the most direct route to writers, we targeted many of the largest publishing houses last year and asked them to pass on PLR information leaflets and application forms to their authors. The success of this initiative is reflected in Table 2 where the 28% figure represents a 30% increase in the number of authors hearing from their publisher about PLR compared with the results of a similar survey conducted two years ago.

Equally important is maintaining contact with authors who have already registered for PLR, keeping them informed of new developments in the operation of the Scheme and taking account of their views on how well it is working. Our location in the north-east of the country restricts the opportunities for authors to visit the PLR office and so we are happy to attend gatherings elsewhere to provide information about PLR and to gather feedback. We were therefore pleased to be able to accept an invitation to address the annual authors’ summer school at Swanwick in Derbyshire when Evelyn Relph of PLR’s Corporate Services team spoke to an audience of 300 authors about the Scheme and our plans for its future development.

12 Unusually this year two opportunities arose to invite authors to the PLR office. We hosted a meeting of Authors North (northern -based members of the Society of Authors) at the PLR office in October, and we welcomed authors from all over the north of England who joined PLR staff and Members of the Advisory Committee at an evening reception in March to mark our move to new offices.

13

4. LOANS SAMPLING

(a) Data Collection

Under the PLR Scheme we are required to collect book loans data from a sample of public library authorities drawn from every region of the United Kingdom. Currently 30 library authorities provide loans data and for the last four years our policy has been to collect details of book loans from several library branches in each authority. During the period 1 July 1998 – 30 June 1999 375 libraries across the 30 authorities participated in the sample, supplying us with information on over 52 million book loans, the highest loans figure to date. Five of the 30 were new authorities.

The loans data supplied by our sample libraries represented 10.8% of book loans nationally and met our target of collecting the equivalent of 10% of public library loans. The data from the 1998-99 sample provided the basis for the payments made to authors in February 2000.

For the period covered by this review (1 July 1999 – 30 June 2000) we introduced a number of new library authorities under the Scheme’s rotation rules. Of these, Essex, Warwickshire, Sheffield and Bradford had participated previously, and we are grateful to colleagues in all four authorities for their willingness to return to the sample. Flintshire, Southwark, Stockton-on-Tees and West Lothian all joined for the first time. It was particularly pleasing for us to mark the Millennium by the inclusion of Stockton, our own ‘home’ authority. The loans data collected from these authorities will be used to calculate payments due to authors in February 2001. A full list of the 1999-2000 sample authorities is given below in Table 3.

14 Table 3 Sample Library Authorities July 1999 – June 2000

England Cheshire Somerset Cornwall Staffordshire Cumbria Stockton -upon-Tees Essex Suffolk Hertfordshire Surrey Kingston-upon-Hull Warwickshire Northamptonshire

Metropolitan Districts Birmingham Sheffield Bradford Wakefield Liverpool

Greater London Boroughs Barking and Dagenham Ealing Bromley Southwark

Wales Flintshire Newport Gwynedd

Scotland Glasgow West Lothian Highland

Northern Ireland North Eastern Education and Library Board (NEELB) Southern Education and Library Board (SELB)

15 With a statistical sampling system of this sort, the size, breadth and rotation of the sample must be seen to be providing a representative picture of borrowing activity across the country if authors’ confidence is to be maintained. We therefore monitor this part of the Scheme’s operation continuously. We have been at pains in recent years to increase the number of branches per authority to improve the chances of payment for authors of books of more local interest, and to maintain the sample size at a level that is statistically relevant. However, it is five years since we last reviewed in detail the Scheme’s data collection arrangements. At that time we had introduced ‘multi-site’ sampling into most of the library authorities in the PLR sample, and we wanted to be sure that the new procedures were proving effective by providing coverage of a wider range of book loans. The review confirmed our expectations and ‘multi-site’ sampling has formed the basis of our approach since then.

Five years on, there have been a number of developments in the public library sector, for example in the size and distribution of library authorities following local government reorganisation. These have pointed towards the need to review both our sampling arrangements and the rules in the Scheme that determine the size and composition of the sample, the distribution of sample authorities across the United Kingdom, and the annual rotation of participating authorities. It may be that the Scheme should be adapted to allow us to take a more flexible approach in our choice of sample authorities, for example to take advantage of partnership arrangements between authorities where IT facilities are shared, or to retain the services of particular authorities for longer periods to help reduce the costs of rotating the sample.

With the assistance of the Chief Statistician at the Department for Culture, Media and Sport we have commissioned an external review of the Scheme’s sampling arrangements. The project is managed by Carolyn Gray and is being jointly undertaken by the Office for National Statistics and Southampton University’s Department of Social Statistics. A draft report is expected to be ready for discussion by the PLR Advisory Committee in November 2000.

The review will concentrate on what might be described as the technical side of PLR’s loans data collection operation. But what we collect is just as important as how we collect. The review of the Scheme that the Registrar and the Advisory Committee undertook last year (and the results of which are described in more detail in Section 5 below) considered this issue: should PLR continue to be restricted to loans of printed books?

16 The Committee looked at the scope for extending the Scheme into new areas of public library activity to take account of the different use now being made of authors’ works, and the range of media now available to library users. Over the last year the Committee has focused on audio cassettes (‘talking books’) and reference books, and has commissioned further work on the implications for rightsholders of library use of e-books.

Audio books

Loans of audio material by public libraries fall outside the scope of the PLR Scheme and as a result of changes to UK copyright legislation in 1996 authors must seek remuneration through copyright licensing arrangements. As reported last year, the Advis ory Committee sought discussions with DCMS on the implications for libraries and rightsholders of licensing the lending of non-book material generally. Given the complexity of the subject, Ministers took the view that the matter should be referred to Re:s ource, the newly-created government advisory body on libraries, museums and archives, for further consideration. However, Re:source’s existing commitments have precluded further work in this area. In the meantime the Authors’ Licensing & Collecting Society (ALCS) has initiated discussions with organisations representing the other rightsholders involved in the production of audio cassettes, and with the library community with a view to establishing licensing arrangements.

Reference books

The Committee revisited the question of reference books usage in public libraries. The scope for remunerating authors of books which are held in reference collections – and therefore not loaned out – had been investigated during the PLR feasibility studies undertaken by the government in the early 1970s. But no satisfactory method of monitoring public use was found, and reference books were left out of the 1979 PLR legislation. In looking again at this issue, Committee Members and Ministers were sympathetic to the case for finding some means of remunerating authors of reference books. However, any recommendation to extend the Scheme to cover reference books would of course require a change in PLR’s primary legislation, and there seemed little likelihood of parliamentary time being made available in the near future for an amendment to the PLR Act.

Nonetheless the Committee asked the Registrar to establish whether recent advances in library technology provided any new possibilities for measuring the use made by the public of reference books. Members were particularly interested in any developments that might provide more accurate information than the Swedish PLR model previously recommended to them which involved allocating to each book in 17 reference stock an average number of notional ‘loans’ based on issues of books in lending stock.

The Registrar reported back on the practice in some libraries of staff using hand-held scanners to record details of reference books in use by members of the public on library premises. This was felt to provide only a partial solution, however, as well as involving library staff in much extra work on PLR’s behalf.

Given the pace of technological change in libraries since the Committee’s last review of the reference books question in 1995, Members now felt that the use of printed works could no longer be treated in isolation from the many new electronic sources of information available to library users. Any recommendations from the Committee – particularly any that required changes to the Act which might take several years to come to fruition - needed to take account of the wider picture. The Committee therefore asked the Registrar to undertake further work on the rights issues associated with the whole range of reference sources now available to library users – printed as well as electronic - to help it formulate its advice to Ministers.

E-books

An important issue to be resolved in discussions over remuneration for rightsholders in the context of electronic media in libraries is whether public use is to be covered by copyright law or PLR. How far can the traditional concept of ‘lending’ be applied to use of the new technologies in libraries? A particular case in point is the potential for provision of e-book facilities. Although public libraries in the UK have yet to adopt this technology, a number of university libraries and internet businesses in the United States are compiling ‘libraries’ of texts in digitised form and offering them to public libraries. It is only a matter of time before libraries in the UK begin to explore the potential of making texts available to users to be read on hand-held ‘readers’. The benefits for libraries in providing readers easy access to out-of-print fiction or to reference sources that are exp ensive to purchase in printed form are obvious. And a number of British publishers are now establishing their own e-book imprints which libraries may want to provide as an alternative to printed works. Of the many issues that e-books use will raise in the public library sector, it is the matter of remuneration to the author that concerns the Committee. We shall be looking at this over the next year in consultation with collecting societies, copyright licensing organisations and the library community.

18 (b) Supporting the library service

Readers of previous Annual Reviews will be familiar with the statistics produced annually as a result of the PLR operation. These throw light on the authors and books that are proving most popular in public libraries up and down the country. (A summary of the most recent subject classification of books borrowed is provided below in Table 4). We remain willing to provide this information to our sample libraries and to agencies undertaking research into public library issues. We know from library authorities such as Hertfordshire and Lancashire that PLR’s listings of the most-borrowed books provide a useful checklist to ensure that the authority is stocking in sufficient numbers the books proving most popular nationally.

However, we are conscious that there is scope to do even more with the information that we generate on borrowing trends as a means of supporting DCMS’s aims for encouraging the creative economy in general and the work of public libraries in particular. We need to develop a more coherent strategy here by identifying where we can help and harnessing the potential of our new computer system to meet those requirements. This will form an essential part of a Communications Strategy that we aim to develop over the coming year.

Wider use of PLR loans data to help library authorities achieve the new standards set out in the recent DCMS consultation paper, Comprehensive and Efficient – A Standard for Modern Public Libraries, has been suggested by the House of Commons’ Culture, Media and Sport Committee in its report on public libraries. (Sixth Report of the House of Commons Culture, Media and Sport Committee on Public Libraries, HMSO, May 2000.) The Committee suggested that the PLR data on borrowing trends might be used in helping to determine book stock that all library authorities should acquire, and we have indicated to DCMS our willingness to help where we can should Ministers wish to pursue this proposal.

19

Table 4 Loans of Registered Books by Category

1988/89 1998/99 % % Adult Fiction General Fiction 17.8 22.2 Historical 3.5 2.6 Mystery & Detection 12.8 13.0 Horror 0.7 0.4 Science Fiction 0.8 0.9 War 1.8 1.3 Humour 0.7 0.2 Light Romance 14.1 10.5 Westerns 1.2 0.7 Short Stories 0.5 0.2

53.9 52.0

Adult Non-Fiction

Science and Technology 1.3 1.0 History 3.5 2.5 Travel & Foreign Countries 2.9 2.4 Social Sciences 2.5 1.8 Religion 0.9 0.8 Nature & Country Life 1.5 1.0 Domestic & Leisure 4.7 4.0 Health 1.7 1.7 The Arts 1.2 0.9 Biography 2.6 2.4 Humour 0.7 0.2 Literature 0.9 0.7

24.4 19.4

Adult Total 78.3 71.4

Children's Fiction 17.5 22.2

Children's Non-Fiction 4.2 6.4

Children's Total 21.7 28.6

TOTALS 100 100

20

5. ADVISORY COMMITTEE AND REVIEW OF THE SCHEME

Recent Annual Reviews have described the extensive work undertaken by the Committee and the Registrar and his team in reviewing the operation of the PLR Scheme over the last three years. The review has been the Committee’s main priority in this period. Recommendations for the future development of the Scheme were presented to Ministers last May.

This year has been taken up by discussions with DCMS over the recommendations, a public consultation exercise undertaken by the Department on the main proposals, preparation of a formal response by Ministers to the recommendations, and progress towards implementation of agreed proposals.

The review has represented a change in focus for the Committee. The Committee remains an advisory body, its brief being to provide the Registrar and the Secretary of State with expert advice on the operation of the Scheme. But in the first ten years of the Scheme’s existence much of the Committee’s time was spent dealing with anomalies or perceived unfairnesses in the Scheme’s rules. In most cases the Committee’s advice led to changes in the Scheme’s provisions or helped create precedents for eligibility decisions that the Registrar has been able to apply in other similar cases.

It is only natural that the Committee’s role, and the advice sought from it by the Registrar and Ministers, should evolve to reflect the bedding down of the Scheme and the diminishing number of eligibility queries arising from its day-to-day operation. Increasingly the Committee is taking the lead in anticipating future developments in the publishing, library and intellectual property fields that may have an impact on PLR, and in providing advice to the Registrar and Ministers that will help them plan the development of the Scheme in these new circumstances.

Under the chairmanship of Michael Holroyd the Committee met twice during the year, at the Society of Authors in November 1999, and at PLR’s new offices in Stockton-on- Tees in March 2000. The vacancy on the Committee left by the retirement of Linda Hopkins was filled by the Secretary of State’s appointment on 1 February 2000 of Terry Turner, Director of Cultural Services, Norfolk County Council. In anticipation of Michael Holroyd’s impending retirement as Chairman, the Secretary of State announced the appointment of Clare Francis as his successor with effect form 7 August 2000. Two other Committee Members were also due to reach the end of their appointments in August 2000: Hilary Mantel, who has accepted reappointment for a 21 further three-year term, and Claire Tomalin who is to be succeeded by Dr Maggie Gee, writer and academic.

The Committee’s principal recommendations for the future development of the Scheme were described in detail in last year’s Review. Following wide consultation involving interested organisations in the publishing, library and copyright sectors, the Arts Minister and officials from DCMS met the Registrar and Chairman to discuss the Committee’s various proposals. The following is a summary of the Minister’s responses and actions taken:

(a) PLR funding to be increased to £7 million per annum

At the core of the Committee’s strategy for the future development of the Scheme was its case for a substantial increase in government funding. Members saw it as essential that the Fund be increased to £7 million to take account of inflation over the first 20 years of PLR’s operation and to provide a platform that would enable the Registrar to take forward the Committee’s other plans for the development of the Scheme. The Committee was particularly concerned that no action had been taken by successive governments to maintain the ‘real’ value of the Fund since the last increase, to £5 million, in 1993-94. The present government had provided for a modest increase in funding to £5.05 from 1 April 1999 but the Committee felt that this fell well short of what was needed to support the future growth of the Scheme. The Committee therefore asked the Registrar to prepare a fuller business case in support of their call for more money. This was presented to Ministers in August 1999.

The Registrar’s case summarised the Committee’s position as follows:

In operational terms the Scheme has fully met authors’ expectations, and it is widely considered to be working efficiently and cost-effectively. Even in its 20th anniversary year, PLR still retains a symbolic importance for British authors given their long struggle to get PLR on the statute book. But the failure of the Fund to take account of inflation and to keep pace with the numbers of new authors registering for PLR is now threatening to devalue that importance. For what would be a relatively small outlay of funding for DCMS, Ministers could restore the credibility and financial value of a PLR system that provides government with the most direct and cost-effective method open to it of channelling financial support to the country’s authors.

At a presentation for the media held at the Royal Society of Arts in June, Michael Holroyd, Clare Francis and Miranda McKearney set out the Committee’s future plans, and expanded on the case for increased funding. The Arts Minister, Alan 22 Howarth MP, also attended and spoke on PLR’s contribution to the achievement of DCMS’s objectives. The Committee’s funding case attracted widespread media coverage and support from authors, and national bodies such as the Royal Society of Literature, PEN and the National Book Committee.

Ministers found the case ‘clear and convincing’ but felt unable to alter existing levels of PLR funding which they regarded as fixed until March 2002 under DCMS’s existing 3-year funding settlement from the Treasury. However, they undertook to consider the case for increased funding from April 2002 as part of the forthcoming government Comprehensive Spending Review.

[The results of the Spending Review were announced in Parliament on 25 July by the Secretary of State. PLR funding was increased to £7 million with effect from 1 April 2002, with a further increase to £7.2 million from April 2003.]

PHOTO 2

Speakers at the presentation at the Royal Society of Arts, June 2000: (left to right) Miranda McKearney, Clare Francis, Alan Howarth MP (Arts Minister), Baroness James of Holland Park, Jim Parker and Michael Holroyd. (William de la Hey Photographer.)

23 (b) Extend the Scheme to authors resident in all European Community Member States

In terms of PLR’s future direction, the Committee gave priority to extending eligibility to authors throughout the European Community to help encourage the recognition of lending rights internationally and to facilitate the development of wider reciprocal arrangements.

Ministers accepted the Committee’s recommendation and Parliament approved the required amendments to the Scheme to take effect from 1 July 2000.

Under the new arrangements, authors living in all 15 EC countries, as well as those resident in Iceland, Norway and Liechtenstein, qualify for payments for loans of their books from public libraries in the UK. One result of this change to the Scheme is to extend eligibility to expatriate British authors who had previously been excluded from PLR.

This extension is arguably the most important change to the Scheme’s coverage in PLR’s 20-year history. Ministers’ support for the Committee’s proposals, which enable the UK scheme to take a leading role in the future development of PLR internationally, has been warmly welcomed by the Registrar and Committee Members.

In preparation for the July start date much effort has gone into publicising the new arrangements through authors’ organisations, copyright collecting societies, publishing houses, national PLR offices and other agencies in each of the countries concerned. PLR’s web-site has also been redesigned with the wider constituency of authors in mind. New developments have included the provision of application forms and information leaflets in the major European languages which can be accessed through the web-site.

The Registrar has begun working with ALCS towards exploring the potential for building reciprocal arrangements with other European PLR systems on the lines of that which currently exists between Germany and the UK.

(c) Reduce the duration of PLR after an author’s death from 70 to 20 years

The Committee took the view that the Scheme’s primary purpose was to support living authors by providing them with payment for the use of their books in libraries. Members felt that the extension in July 1997 of the period during which payment continued after an author’s death from 50 to 70 years worked against this principle. The extended period had been introduced to bring PLR into line 24 with EC copyright legislation. They sought Ministers’ help in reversing this decision by reducing the posthumous eligibility period to 20 years. This was felt to reflect the majority view of authors who wished to retain the option of leaving their PLR payments as a means of support for their immediate family. The Registrar was also concerned about the future operational and cost implications of administering authors’ posthumous PLR over a 70-year period.

Ministers welcomed the Committee’s efforts to simplify the administration of the Scheme but felt unable to support a reduction in the 70 year period because of the implications for public libraries. Were PLR to end 20 years after an author’s death, loans of the author’s books for the remaining 50 years of the copyright period would become subject to licensing requirements. Ministers felt that the administrative and cost implications for libraries ruled out any change in the Scheme. However, they did suggest that the Registrar look at other options for simplifying posthumous arrangements, such as making it easier for authors to leave their PLR payments in the Fund after their deaths for the benefit of other authors.

(d) Other recommendations

The Committee sought discussions with the Department on the matter of remuneration for authors for loans of non-book materials falling outside the Scheme, and these are described in more detail above in Section 4 of the Review.

To supplement PLR funding, the Committee asked the Registrar to explore with DCMS the potential for amending the rules relating to National Lottery funding so as to make PLR eligible for support. DCMS recognised that the current rules for use of Lottery cash rule out PLR as a possible recipient. However, if the Committee wished to pursue the matter it should provide a fuller case for how Members would wish to see Lottery money used to supplement the PLR Fund.

In fulfilling its advisory role for Ministers the Committee has been aware of the need to take account of recent government guidelines on the propriety of Members’ conduct in matters such as possible conflicts of interest. In consultation with DCMS the standard government Code of Conduct for holders of public appointments was modified to reflect the Committee’s functions and terms of reference, and all Members signed up to the Code during the year. The Committee also reviewed the government report, QUANGOS: Opening the Doors, which set out a number of proposals aimed at making non-departmental public bodies such as advisory committees more ‘open, accountable and effective’. Members concluded that all the proposals relevant to its functions and responsibilities were covered by the Committee’s existing procedures and that no further action was required. 25

6. INTERNATIONAL DEVELOPMENTS

International PLR developments are increasingly relevant to the work of the PLR office and the Advisory Committee. The leading role taken by the Committee in implementing the extension of the UK Scheme to authors throughout the European Community from 1 July has been discussed already. But the Registrar has also been active on other fronts in co-ordinating the activities of the International PLR Network and in promoting the Network’s role as a source of expertise on PLR matters that can be made available to countries seeking to set up their own lending right system.

The Network was set up in 1995 at the first international conference convened in Britain. To help promote awareness of its work we launched an international PLR web-site (www.plrinternational.com) earlier this year. It offers opportunities for comments and feedback; provides contact details of PLR administrators; newsletters and conference reports; and supplies up-to-date news on recent developments. An explanatory leaflet is also now available.

The centrepiece of Network activities over the last year has been the third international PLR conference, organised by the Canadian PLR Commission, and held in Ottawa in November 1999. Over 100 delegates from 18 countries attended the three-day event which focused on the opportunities for promoting authors’ lending rights in the Americas (currently only Canada has a PLR programme), and the challenges for PLR presented by the growing use of new media in libraries.

The Conference also provided a welcome opportunity for delegates to learn of developments in each of the existing national PLR systems. The PLR community of nations continues to grow, with 15 countries now having working PLR schemes. A further eleven countries have recognised authors’ lending rights in their national legislation, but have yet to set up payment arrangements. A key factor has been the EC’s 1992 European Directive on Lending and Rental Right, which created a new copyright-based lending right for authors within the Community.

Most activity over the last year has been taking place in Ireland and France. In the former, a Copyright and Related Rights Bill which will give effect to the Directive is currently before Parliament. It is not yet known what categories of publicly-funded libraries, if any, will be covered by the draft legislation’s PLR provisions. Under the 1992 Directive, it is open to governments to exclude certain types of library from any obligation to make PLR payments to authors, and in Portugal, Spain and Italy governments have chosen to exclude public libraries from PLR.

26 In France the Culture Ministry is working on plans for a PLR scheme which will reward both authors and publishers, and the Registrar has provided information on the operation of PLR systems elsewhere to government officials, and to representatives of the library and author communities, to assist with these preparations. Enabling legislation has been in place since 1957 and preparations for the proposed scheme are now understood to be at an advanced stage.

Elsewhere in the Community, Belgium and Luxembourg have recognised the Directive but are awaiting secondary legislation. Denmark, Finland and Sweden have derogated from Directive’s provisions for a copyright-based lending right and have implemented ‘cultural’ schemes aimed at encouraging authors to write in the native language of each country. Germany, Austria, the Netherlands and Greece have adopted copyright-based legislation in line with the Directive, although the last has not yet set up an organisation to negotiate licenses collectively on behalf of authors and other rightsholders.

As part of their preparations to seek membership of the EU, several countries in eastern and central Europe are reviewing their copyright and related intellectual property right legislation and are showing increasing interest in implementing the Lending Directive’s provisions on PLR. Through the PLR Network a number of these have been in touch with the Registrar seeking advice and assistance towards identifying a PLR approach that will best meet their requirements. Both Lithuania and Slovakia now have legislative frameworks for copyright-based PLR schemes in place and are finalising operational details. Estonia and Latvia have plans to implement schemes, and the Czech Republic and Slovenia have set up copyright-based PLR systems for non-book materials.

In May the Registrar was invited to address representatives from authors’ organisations on PLR developments at a copyright seminar in Pecs in southern Hungary. The meeting, an annual event, was funded and organised by the Norwegian government as part of a wider programme of overseas technical assistance. Some ten countries were represented, including Croatia, Serbia, Bulgaria and Romania, and on the basis of the interest expressed at the meeting we look forward to future PLR developments in this part of Europe.

As a means of providing a more co-ordinated approach to assistance through the PLR Network, the Registrar has been working with colleagues at the Danish PLR office with a view to organising a PLR training seminar in Copenhagen for former eastern bloc countries. With the generous support of the Danis h Culture Ministry invitations have gone out to officials in appropriate government departments. Initial reaction to the proposal has been very encouraging, and a provisional date of January 2001 has been set.

27 Europe continues to be the focus for most new PLR activity, but the biennial international conferences provide opportunities to promote PLR in other parts of the world. For example, authors’ groups from the United States were represented at the Ottawa conference. The next conference, in 2001, is to be held in Australia and may serve to encourage the recognition of lending rights in a new range of countries: Mauritius has now made provision for PLR in its copyright legislation and this may be a catalyst for others.

28

7. ADMINISTRATION

(a) Corporate Planning

Our main objectives for 1999-2000 were agreed with DCMS and incorporated in a Funding Agreement signed by the Registrar and the Secretary of State. The Agreement aims to provide a clear statement of the policy context in which PLR operates and of the results we aim to achieve with the funding provided by the Department. A review of our success in achieving PLR’s 1999-2000 objectives may be found above in Section 2. Increasingly Funding Agreements are focusing on the contribution expected from sponsored bodies towards the achievement of Ministers’ overall objectives for the cultural sector. DCMS’s Quality, Efficiency and Standards Team (QUEST) has been working on a framework for future Funding Agreements that will facilitate this process. We anticipate that the new form of Agreement will provide more scope to emphasise PLR’s wider role in supporting the creativity and livelihoods of the country’s authors and the work of the public library service.

(b) Staff, Training and Development

A full list of staff members is provided in Annex 2. While overall numbers remained broadly in line with last year, an increasing percentage of staff (30%) are now taking advantage of PLR’s flexible working arrangements providing for reduced or variable working hours that match each individual’s circumstances. Two long-serving colleagues departed during the year: IT manager Nigel Moffatt retired after 18 years service with PLR, and Marylyn Marshall, a member of the Author Services Team, left to pursue a new career in teaching.

Following the introduction of team-based working during 1998-99 we set ourselves the objective of gaining Investors in People (IIP) accreditation. This was achieved in December. While staff training and development has always been taken seriously at PLR, the IIP framework has been extremely useful in ensuring that training is focused on the achievement of corporate objectives, and that the staff training implications of any new initiatives are given a high priority. A Training and Development Plan setting out the staff training required to support the achievement of our 1999-2000 objectives was drawn up and monitored by the Registrar and Team Leaders. As a result of the Plan an

29 average of 9 days per employee was spent on training and development, including external courses, in-house coaching and self-learning.

The Registrar has responsibility for the pay and grading of PLR staff. Following negotiations with the Public Services, Tax and Commerce Union, a pay settlement providing an average 5% increase for staff with effect from 1 April 2000 was agreed. The settlement recognised the considerable contribution made by members of staff to the achievement of PLR objectives. Thanks to savings made during the year, the settlement added only 2.5% to PLR’s overall salary bill and was therefore in line with the government’s public sector pay policy.

PLR employees are members of the PLR Staff Pension Scheme, a ‘pay-as-you- go’ statutory unfunded pension scheme which is analogous to the Principal Civil Service Pension Scheme (PCSPS). The costs of pensions are charged to the PLR Fund as they arise. During the year we began an investigation, led by Julie Ramsey, into the feasibility of staff transferring from the PLR scheme to PCSPS as part of a wider Treasury initiative to relieve government bodies such as PLR of the burden of accumulating pension liabilities.

(c) Information Technology

During the year we successfully completed the first stage of our IT development project. We installed a new server, upgraded the UNIX operating system and INGRES database software, and introduced a Windows office automation system. As part of the project we also reviewed all our systems for potential millennium date problems and took remedial action where required. Millennium compliance testing was completed by July 1999, and no problems have been encountered since 1 January. The new system is faster, more efficient and more reliable than its predecessor and is enabling PLR staff to provide an improved service for authors.

The new system also provides a basis for taking forward plans for future developments, particularly in the area of e-business. As part of the second stage of the project we have developed and introduced a new IT Strategy in line with the government’s Corporate IT Strategy. The Strategy incorporates the principles set out in the Modernising Government White Paper and provides details of plans for electronic service delivery. We aim to meet the government’s targets that 25% of services will be capable of electronic delivery by 2002, and 100% by 2005. A key part of the project will be the conversion of existing PLR system applications to a Windows format. This work is being undertaken by Darren Scrafton, PLR’s in- house IT specialist.

30 Steps towards the realisation of our e-business plans during the year included: the launch of the international web-site; development of our own web-site to include information and application forms in three languages in preparation for the extension of PLR eligibility to authors resident in member states of the European Economic Area from 1st July 2000; the provision of e-mail facilities for those authors wishing to communicate electronically with the PLR office; the transmission of 50% of sample library loans data electronically to the PLR computer, which has reduced costs and improved speed of delivery.

(d) Accountability

PLR systems and procedures continue to be the subject of internal audit by staff from the Newcastle-upon-Tyne office of Deloitte & Touche, Chartered Accountants. The audit this year also provided assurance for an analysis that we have been required to undertake of how the PLR Fund has been spent in support of individual DCMS objectives. The results will be incorporated into Schedule 5 of DCMS's published accounts.

In line with the provisions of the PLR Act, PLR’s accounts were audited by the National Audit Office prior to being laid before Parliament.

During 1999-2000 both audit teams set out to work together more closely to eliminate any unnecessary duplication in approach. This was felt to have worked well, allowing NAO to place greater reliance on the findings of the internal auditors and thereby reducing their investigative work and associated costs to PLR. Following their 1999 - 2000 audit visits, Deloitte & Touche reported that PLR had a ‘sound system of controls which were consistently applied’.

Under the chairmanship of Mike Paterson of the Royal Commission on Historical Manuscripts PLR’s Audit Committee met twice during the year. (See Annex 4 for details of the Committee’s membership.) The Committee continues to review PLR’s audit needs, checking that audit recommendations have been implemented and providing continued assurance to DCMS and the Registrar on the robustness of controls within the PLR office. The Committee welcomed the implementation in January by DCMS of a revised Financial Memorandum setting out the rules and procedures governing the Registrar’s management of PLR’s grant-in-aid. The Memorandum confirmed the Registrar’s status as Accounting Officer. Under the Treasury’s new Corporate Governance procedures (described in last year’s Annual Review) the Committee expressed itself content for the Registrar to sign the necessary Statement of Internal Financial Control. This was included in PLR’s published accounts, a summary of which can be found at Annex 1.

31 The Audit Committee also considered the implications for PLR of the Turnbull Report on Corporate Governance. The Turnbull recommendations require organisations to develop a risk management framework to identify risks, assess their likely impact and introduce controls which can be monitored on an on-going basis. From 2002 risk management will be one of the issues to be covered by the Registrar’s Statement of Internal Control in PLR’s published accounts, and will therefore come under the scrutiny of the Audit Committee.

(e) Office Accommodation

As reported last year, we were obliged to abandon plans to relocate the PLR operation from Bayheath House to Dunedin House in Stockton’s Teesdale Business Park, on the south bank of the River Tees. Fortunately, we were able to find alternative accommodation soon afterwards at Richard House on the same site. The new first-floor offices required extensive redesign, redecoration and fitting out, but the work was completed under the supervision of Janine Armstrong within three months of our first viewing the building. The move to Richard House took place in November, and the new premises are proving well suited to our needs. The office was officially opened by the Arts Minister, Alan Howarth, on 3 February.

(f) Green Issues

In line with the Greening Government Initiative, we began work on a Green Strategy for the PLR operation. This is due to be submitted to Ministers by September 2000 and will set out PLR’s policies on issues such as energy conservation and waste reduction. Future Annual Reviews will report our progress in these areas.

32

ANNEX 1

SUMMARY FINANCIAL STATEMENT

FOR THE YEAR ENDED 31 MARCH 2000 PUBLIC LENDING RIGHT CENTRAL FUND

SUMMARY FINANCIAL STATEMENT

FOR THE YEAR ENDED 31 MARCH 2000

Foreword

The financial results for the year ended 31 March 2000 are summarised on pages 3-5.

This statement has been produced following the guidelines of the Companies (Summary Financial Statement) Regulations 1995. It is a summary of information in the 1999-2000 accounts of the Public Lending Right's Central Fund distribution of activities which are prepared in accordance with Section 2(6) of the Public Lending Right Act 1979.

This summarised statement does not contain sufficient information to allow for a full understanding of the results and state of affairs of the Public Lending Right Fund. For further information the full annual accounts and the auditor's report on those accounts should be consulted.

The auditors have given an unqualified audit opinion on the accounts of the Public Lending Right Fund.

A copy of the full account - which contains detailed information required by the PLR Act 1979 and best practice guidelines - together with the Certificate and Report of the Comptroller and Auditor General can be obtained free from Public Lending Right, Richard House, Sorbonne Close, Stockton-on-Tees TS17 6DA.

Payments to Authors

Despite higher then usual project costs, it proved possible to increase the level of the Rate Per Loan for the February 2000 payments to authors to 2.18 pence, the highest figure to date (2.07 pence in 1998- 99). A total sum of £4,206,345 was paid out to 17,407 authors. 73% of the Fund was distributed in payments of £500 or more and feedback from recipients indicates that PLR continues to play an essential role in supporting their livelihoods and creativity.

Future Developments

The Advisory Committee’s recommendations for the future development of the Scheme were presented to Ministers in April 1999. The principal recommendations were that PLR funding should be increased to £7 million to take account of inflation on the Fund since the inception of the Scheme, and that eligibility for PLR should be extended to authors living throughout the European Community. The second of these was accepted by Ministers and the Scheme will be extended with effect from 1 July 2000. Ministers will review PLR’s funding as part of the government’s Spending Review 2000 and a decision is expected in July.

Dr J G Parker Registrar of Public Lending Right PUBLIC LENDING RIGHT CENTRAL FUND

STATEMENT BY THE COMPTROLLER AND AUDITOR TO THE HOUSES OF PARLIAMENT

I have examined the summary financial statement on pages 3 to 5 which has been prepared in the form and on the basis set out on page 1.

Respective responsibilities of the Registrar as Accounting Officer and the Auditor

The summary financial statement is the responsibility of the Registrar as Accounting Officer of the Public Lending Right Central Fund. My responsibility is to report to you my opinion on its preparation and consistency with the full financial statements and the foreword.

Basis of opinion

I conducted my audit in accordance with the Auditing Guideline ‘The auditor’s statement on the summary financial statement’ adopted by the Auditing Practices Board.

Opinion

In my opinion the summary financial statement is consistent with the full financial statements and foreword of the Public Lending Right Central Fund for the year ended 31 March 2000 and has been properly prepared on the basis set out on page 1.

John Bourn National Audit Office Comptroller and Auditor General 157-197 Buckingham Palace Road 14 July 2000 Victoria London SW1W 9SP PUBLIC LENDING RIGHT CENTRAL FUND

SUMMARY FINANCIAL STATEMENT

FOR THE YEAR ENDED 31 MARCH 2000

Summary Income and Expenditure Account

Notes 1999-00 1998-99 HMG Grant 1 4,868,623 4,747,244 Other Operating Income 92,888 58,365 PLR to Authors (4,206,345) (4,158,527) Operating Costs 2 & 3 (749,389) (683,277) Operating Surplus/(Deficit) 5,777 (36,195) Interest Receivable and Sundry Income 15,497 13,873 Corporation Tax (2,281) (2,015) Notional Cost of Capital (11,601) (5,935) Surplus/(Deficit) after Notional Costs 7,392 (30,272) Reversal of Notional Cost of Capital 11,601 5,935 Surplus/(Deficit) for Financial Year 18,993 (24,337) Retained Surplus/(Deficit) Brought Forward (31,820) (7,483) Retained Surplus/(Deficit) Carried Forward (12,827) (31,820) The fund has no recognised gains and losses other than those above.

Summary Balance Sheet - as at 31 March 2000

1999-00 1998-99 Fixed Assets 231,567 186,264 Current Assets 78,762 71,833 Creditors (83,748) (97,987) Net Current Assets (4,986) (26,154) Total Assets Less Current Liabilities 226,581 160,110 Represented By: Accruals and Deferred Income 231,567 186,264 Provision for Liabilities and Charges 7,841 5,666 Capital and Reserves (12,827) (31,820) 226,581 160,110

Dr J G Parker Registrar of Public Lending Right PUBLIC LENDING RIGHT CENTRAL FUND

SUMMARY FINANCIAL STATEMENT

FOR THE YEAR ENDED 31 MARCH 2000

Summary Cash Flow Statement

1999-00 1998-99

Net Cash Inflow/(Outflow) from Operating Activities 4,090 (28,062) Net Cash Inflow from Returns on Investment and Servicing of Finance 11,403 9,593 Corporation Tax Paid (2,015) (2,342) Capital Expenditure and Financial Investment (140,724) (187,649) Net Cash Inflow from Pensions Account & Financing 133,701 206,921 Increase/(Decrease) in Cash 6,455 (1,539)

Reconciliation of Net Cash Flow to Movement in Net Funds Increase/(Decrease) in Cash 6,455 (1,539) Net Funds @ 1 April 71,065 72,604 Net Funds @ 31 March 77,520 71,065

Notes to the Accounts

NOTE 1 HMG GRANT

1999-00 1998-99

£ £ Grant for PLR (Class X, Vote 1) 5,051,000 5,000,000 Less: Registrar's Costs (52,785) (50,070)

Grant to Central Fund 4,998,215 4,949,930 Less: Transfer for Capital Expenditure (129,592) (202,686)

4,868,623 4,747,244

The Registrar's Costs comprise the salary and National Insurance payments of the present Registrar, and pension payments to his predecessor. The Registrar's pension scheme is unfunded, and is administered in the same way as the PLR staff scheme.

The Registrar's contract was renewed for a period of five years from 1 August 1996.

The Registrar's total remuneration was 44,279 42,339 All capital expenditure (£129,592 in 1999/00) is financed from HMG Grant. The Grant apportioned is treated in the accounts as a deferred credit. A proportion is transferred annually to the Income and Expenditure Account over the estimated useful life of the assets as Other Income to cover depreciation.

NOTE 2 STAFF COSTS

1999-00 1998-99

£ £ Salaries 274,835 262,923 Employer’s National Insurance 17,642 17,186 Superannuation [Note 2(i)] 44,219 45,631 Exceptional Costs [Note 2(ii)] - 16,000

336,696 341,740

2(i) Includes an amount of £34,837 paid as a lump sum to an employee who retired during the year.

2(ii) Relates to a severance agreement with an ex-employee.

2(iii) Average weekly number of full time staff employed in the year was 15 16

2(iv) Employees receiving remuneration over £40,000 0 0

NOTE 3 OTHER OPERATING CHARGES 1999-00 1998-99

£ £ Administration 125,154 104,258 Accommodation 100,937 72,628 Computer Operating Costs 20,905 34,020 Local Authorities 43,034 45,884 Consultants 38,374 31,430 Disposal of Assets 6,613 -

335,017 288,220 Depreciation 77,676 53,317

412,693 341,537

ANNEX 2

STAFF COMPLEMENT (AT 30 JUNE 2000)

Registrar

Registrar James Parker

Personal Assistant Susan Ridge

Corporate Services

Team Leaders Julie Ramsey Evelyn Relph

Team Members Janine Armstrong Julia Coxon Rachael Downing Darren Scrafton Adam Storey (student placement)

Author Services

Team Leader Carolyn Gray

Team Members Sarah Beamson Jamie Edmundson Janice Forbes Joanne Gayford Louise Hatton Angela McArdle Dorothy Watkins

ANNEX 3

ADVISORY COMMITTEE

Michael Holroyd Chairman*

James Parker Registrar of PLR

Theresa Breslin Author

Hilary Mantel Author

Miranda McKearney Library Marketing Consultant

Roger Palmer Publishing Consultant

Claire Tomalin Author

Terry Turner Director of Cultural Services, Norfolk County Council (appointed 1 February 2000)

* During the year Clare Francis was appointed by the Secretary of State to succeed Michael Holroyd as Chairman of the Committee with effect from 7 August 2000. She attended the Committee’s meeting on 29 March.

Assessors

Members of staff from the PLR office, Department for Culture, Media and Sport, Society of Authors, Writers’ Guild of Great Britain and Authors’ Licensing & Collecting Society may attend Advisory Committee meetings as Assessors. The following attended during the year in this capacity.

Jacob Ecclestone Writers’ Guild of Great Britain

Carolyn Gray PLR

Mark Le Fanu Society of Authors

Dafydd Wyn Phillips Authors’ Licensing & Collecting Society

Julie Ramsey PLR

Evelyn Relph PLR

Susan Ridge PLR

Emma Scott Department for Culture, Media and Sport

Becca Wyatt Public Relations Consultant

ANNEX 4

AUDIT COMMITTEE

Chairman Mike Paterson, Director of Central Services, Royal Commission on Historical Manuscripts

Members James Parker, Registrar of PLR

David Bothamley, Head of Finance, British Library

In Attendance Staff from the PLR office, the National Audit Office and Deloitte & Touche (Chartered Accountants) may attend Audit Committee meetings. The following attended the two meetings held during the year 1999-2000.

Warren Edge, Deloitte & Touche

Richard Gardner, National Audit Office

Carolyn Gray, Team Leader Author Services, PLR

Julie Ramsey, Team Leader Corporate Services, PLR

Evelyn Relph, Team Leader Corporate Services, PLR

Susan Ridge, Secretary, PLR

Clive Robinson, Deloitte & Touche