They have always had a dusty image – and never more so than now – but libraries are at the heart of our communities. With the axe about to fall, Bella Bathurst reveals just what we're about to lose

You can tell a lot about people from the kind of books they steal. Every year, the public library service brings out a new batch of statistics on their most-pilfered novelists – Martina Cole, James Patterson, Jacqueline Wilson, JK Rowling. But in practice, different parts of Britain favour different books. Worksop likes antiques guides and hip-hop biographies. Brent prefers books on accountancy and nursing, or the driving theory test. Swansea gets through a lot of copies of the UK Citizenship Test. In Barnsley, it's Mig welding and tattoos ("I've still no idea what Mig welding is," says Ian Stringer, retired mobile librarian for the area. "The books always got taken before I could find out.") And Marylebone Library in London has achieved a rare equality. Their most stolen items are The Jewish Chronicle, Arabic newspapers and the Bible.

But the figures show something else as well – that among all communities and in all parts of Britain, our old passion for self-improvement remains vivid. Unlike DVDs or CDs or Xbox games, books removed from public libraries have no resale value. Unless they're very rare or very specialist, even hardbacks aren't worth anything anymore. So the only reason to take books is to read them.

Even so, theft remains a sensitive subject. "If someone suggested the idea of public libraries now, they'd be considered insane," says Peter Collins, library services manager in Worksop. "If you said you were going to take a little bit of money from every taxpayer, buy a whole load of books and music and games, stick them on a shelf and tell everyone, 'These are yours to borrow and all you've got to do is bring them back,' they'd be laughed out of government." But theft – or loss, or forgetting – is not a new thing. During the 1930s, supposedly a far more upright age, 8.8m books vanished from the library system every year.

There are 4,500 public libraries in Britain, as well as almost 1,000 national and academic libraries. As local authority budgets are reduced by the government's cuts, up to 500 libraries around the country will have to close. Librarians – traditionally seen as a mild, herbivorous breed – are up in arms. Partly because public libraries are often seen as a soft target; partly because they say local authorities consistently undervalue the breadth of what they do; and partly because the cutting will be done during a recession, which is exactly when everyone starts going to the library again.

But the cuts also underscore a deeper confusion about what libraries are: what they do, who they serve, and – in an age where the notion of books itself seems mortally flawed – why we still need them. What's the point of buildings filled with print? Isn't all our wisdom electronic now? Shouldn't libraries die at their appointed time, like workhouses and temperance halls?

The old clichés do not help the cause, given that libraries are meant to be austere places smelling of "damp gabardine and luncheon meat", as Victoria Wood put it, and librarians are either diffident, mole-eyed types or disappointed spinsters of limited social skills who spend their time blacking out the racing pages and razoring Page 3.

In Worksop, Peter Collins radiates a love both of libraries and for the infinite variety of people who use them. He's 33 and "always defined myself by being a librarian. I'd say to girls: 'Guess what I do for a living?' Admittedly, they were the kind of girls who might be impressed when I told them I had an MA in librarianship, but I was just so proud of it, so in love with what I did. When I first met my future wife, she got a tirade about the magic of libraries."

Collins believes that libraries are just as vital now as they were during the 40s, when Philip Larkin complained of stamping out so many books in a week that his hand blistered. Even so, he spends much of his time in a ceaseless game of catch-up. "Libraries are always trying to prove themselves because what they provide is so intangible. How do you quantify what someone gets from a book or a magazine?"

Attempts to do so often end up in trouble. "The council once asked us for an assessment of outcomes, not output," says Ian Stringer. "Output was how many books we'd stamped out, and outcome was something that had actually resulted from someone borrowing a book. So say someone took out a book on mending cars and then drove the car back, that's an outcome; or made a batch of scones from a recipe book they had borrowed. It lasted until one of the librarians told the council they'd had someone in borrowing a book on suicide, but that they'd never brought it back. The council stopped asking after that."

The great untold truth of libraries is that people need them not because they're about study and solitude, but because they're about connection. Some sense of their emotional value is given by the writer Mavis Cheek, who ran workshops within both Holloway and Erlestoke prisons. At Erlestoke she had groups of eight men who so enjoyed the freedom and contact of the writing groups they ended up breaking into the prison library when they found it shut one day. Which authors did they like best? "Graham Greene," says Cheek. "All that adventure and penance. His stuff moves fast, it's spare and it's direct."

Greene might seem a surprising choice, but then what people choose to read in extremis often is. In London during the Second World War, some authorities established small collections of books in air-raid shelters. The unused Tube station at Bethnal Green had a library of 4,000 volumes and a nightly clientele of 6,000 people. And what those wartime readers chose were not practical how-to manuals on sewing or home repairs, but philosophy. Plato and his Republic experienced a sudden surge in popularity, as did Schopenhauer, Bertrand Russell, Bunyan and Burton's Anatomy of Melancholy.

Ian Stringer worked in Barnsley just after the 1980s miners' strike. "Library issues doubled during the strike, they were the highest they've ever been. A lot of ex-miners wanted books on law because they wanted to challenge the legality of what the government was doing. Or they needed practical self-help stuff like books on growing your own, or just pure escapism." The same thing is happening now.

Paul Forrest used to go out with the mobile library around the deprived areas of Edmonton, north London. "It was quite shocking how isolated people are sometimes. At times, books or talking books are the only connection to the world they've got. And the mobile librarians really know their customers' interests – not just that they like romances, for instance, but romances with a bit of spice, not too much sex, a bit of history. Those books are almost a form of medication; I reckon we save the NHS a fortune in antidepressants."

For many years, Ian Stringer worked on Barnsley's mobile libraries. So potent was the South Yorkshire service that at one point during the 1980s, "we had four couples leaving their spouses for each other. We ended up calling it the Mile Out Club." What was going on? "I think it's because you used to have two people going out, usually a man and a woman, in the van sometimes for nine hours at a stretch. Often it would be an older man and a younger woman, and I reckon some of the younger women had married young, and this was the first chance for them to see what an older man could be like. And some of the spots they'd get out to, like the farms, they'd be quite secluded. Not that anyone ever delayed the service, of course." By the time the fourth couple got together, the erotic charge of the vans had grown so great that "all the relatives ended up having a fight on the loading bay, everyone pitching in, all chucking boxes of library tickets at each other".

Inevitably, libraries are also used as a refuge by many who never had any intention of mugging up on the latest literary prize shortlist. It's an odd thing that libraries – by tradition temples to the unfleshly – can sometimes seem such sexy places. Perhaps it's their churchiness or the deep, soft silence produced by so many layers of print, or simply the hiding places provided by the shelves. "There's a big following on the internet for sites on librarians and people with library fetishes," says Kerry Pillai, manager of Swansea library. "I don't know why. But we do have a lot of attractive staff here." Has she ever been approached? "I did get sniffed once," she says. "In the lifts."

"In the 60s, before the Lady Chatterley trial," says Ian Stringer, "you used to get block books – literally, wooden blocks in place of any books the librarians thought were a bit risqué, like Last Exit to Brooklyn. You had to bring the block to the counter and then they'd give you the book from under the desk. So of course you got a certain type of person just going round looking for the wooden blocks."

There are other uses for libraries. In Marylebone they take a lenient view of sleepers. "As long as they're vertical, it's all right," says Nicky Smith, senior librarian. "If they're horizontal or snoring, then we wake them up. Mind you," she adds cheerily, "we were always told to wake people well before closing time, because if they turn out to be dead, then you won't get home before midnight." Marylebone has particular cause to be vigilant; it has the unusual distinction of being one of the few libraries in Britain where someone has actually died. Edgar Lustgarten was well known as a TV personality during the 50s and 60s. He presented an early version of Crimewatch, talking the viewers through the topical murder- mysteries of the day. On 15 December 1978, he went to the library as usual and was found some time later, dead at his desk. What had he been doing? "Reading the Spectator."

Worksop has a resident book-eater. "We kept noticing that pages had been ripped from some of the books," says Peter Collins. "Not whole pages, just little bits. It would always be done really neatly, just the tops of the pages. And then we'd see these little pellets everywhere, little balls of chewed paper cropping up in different parts of the library. Eventually we figured out who it must be. None of us wanted to say we'd noticed him munching away at the books, so I approached him and said something like I'd noticed 'tearing' on some volumes. He said he didn't know anything about it, but we've never seen him back."

"And we had a streaker once," Collins continues. "In Tamworth. He got into the lifts, and somewhere between the first and second floors he managed to take off all his clothes, run naked through Music and Junior, and then vanish out the front doors. The library there is right next to a graveyard, so goodness only knows what happened to him. Still, all part of life's rich tapestry."

He says that reading seems to be becoming an increasingly alien concept for children. "The pace of life is different now, and people expect art to happen to them. Music and film do that, a CD will do that, but you have to make a book happen to you. It's between you and it. People can be changed by books, and that's scary. When I was working in the school library, I'd sometimes put a book in a kid's hands and I'd feel excited for them, because I knew that it might be the book that changed their life. And once in a while, you'd see that happen, you'd see a kind of light come on behind their eyes. Even if it's something like 0.4% of the population that that ever happens to, it's got to be worth it, hasn't it?"

The libraries' most powerful asset is the conversation they provide – between books and readers, between children and parents, between individuals and the collective world. Take them away and those voices turn inwards or vanish. Turns out that libraries have nothing at all to do with silence.