The average cost of borrowing a book in the central London boroughs in 2005/6 wasWhen it's costing £10/lend, it makes no sense at all. You can buy a hardback edition of the 1st Harry Potter for less than that. Even at £3.64, you can buy a paperback of a Jules Verne novel.
Tower Hamlets £9.90
And bear in mind, that's a BUY, not a lend. My last book, Harry Markopolous' book about Madoff was about £17, but I'll lend that to someone who will read it, meaning it cost no more than £8.50/read.
So, give people the money, let them buy books and lend to each other, or resell or give to charity. It's now a more efficient model than public libraries.