My library have just started doing ebooks, on the cheap, very cheap. In fact, as far as I can tell, it just gives you a link to Project Gutenbergs homepage
I'll nip in the local library sometime and see if there is any more info there.
The council have just closed 5 libraries, making 7 staff redundant, total savings ~£900,000 per year, looks like libraries are expensive to run. You could certainly make a good case for having 1 online library for the entire UK instead of seperate council run ones.