I’ve lived in towns that have libraries without late fees, and it’s worked out great.
@flo: “The reason people return books etc, is because they don’t want to be charged.”
I’ll defer to our resident ex-librarian penguin, but I would very much disagree with this. In fact, in my experience, when you live in a town with no late library fees, you are more likely to return the book on time (or even early) because the consequence of doing so means that someone could possibly be waiting for it. When there is a fee, in the back of your mind (somewhere) you understand that someone could be waiting for the book. But the immediate consequence of a fine takes precedent.
Late fees change the relationship you have with the other library users, and makes it feel as though your responsibility is to the library.
I could be wrong. My experience might be unique.