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We have been organising this cooperatively within the Foursite Consortium of Somerset, North Somerset, Bath, and South Glos (now renamed LibrariesWest with the addition of Bristol) for some time. 

We get a regular report from our systems officer of fiction items with 20 copies or more in the consortium, which reading groups can use as a picking list.

They can borrow freely within the consortium, provided that they stick to items which are more than 12 months old and do not have a waiting list.  If they want to reserve newer books, the current rule is that they  cannot cross authority boundaries.

Within my own authority we get round restricted numbers of copies by suggesting that they make up a set with other titles by the same author, or with a similar theme, and then compare notes within the group.