As children across the UK don Matilda and Harry Potter costumes in celebration of World Book Day, shadow culture secretary Tom Watson has condemned the “scandal” that the number of books borrowed from public libraries in England has plummeted by almost 100m since 2011.

Research commissioned by the Labour party shows that the number of books borrowed from libraries fell from 255,128,957 in 2011 to 157,387,109 in 2018 – a 38% decrease. Drawing from the data released by the Chartered Institute of Public Finance and Accountancy (Cipfa), which had already revealed that 127 public libraries closed in England, Wales and Scotland in 2018, the new research found that the north-east experienced the largest decline in book loans, down by 49%.

The fall comes against a backdrop of widespread library closures and swingeing staff cuts: Essex has earmarked more than a third of its 74 libraries for closure, while Bradford’s libraries are facing a £2m funding cut over the next two years. Cipfa said in December that the library service lost 712 full-time employees last year, while volunteer numbers increased by 3,000.

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“It’s a scandal that almost 100m fewer books are being borrowed from our public libraries. Council budgets have been cut to the bone by Tory austerity and our library services are paying the price,” said Watson.

Laura Swaffield, chair of the Library Campaign, said that with more than 700 libraries lost since 2010, “the only surprise is that the decline in book loans isn’t even larger”.

“Research shows that reading is valued as sheer pleasure, an escape from stress and a way to increase empathy with other people. God knows we need these more than ever,” said Swaffield. “On top of that, reading for pleasure is the single most important factor in giving children success in education. It just shows how stupid – and ultimately wasteful – austerity cuts are.”

Watson, Labour’s deputy leader, pointed to the fact that children around the country were celebrating World Book Day on 7 March – “a great opportunity to celebrate how reading opens up whole new worlds for children and adults alike”. But “everyone should have access to books and the joy of reading,” said Watson. “The government should urgently rethink and end these senseless cuts.”

Nick Poole, chief executive of Cilip, the library and information association, said there was a direct link between quality of book stock and how often they were borrowed: “Far from signalling reduced demand for books by the public, these figures show that if you slash library budgets, you reduce reading and all of the positive benefits that go with it. These cuts often target the poorest communities where people can’t afford the cost of buying books for themselves. Britain risks becoming a nation of library haves and have-nots.”

More than 90% of the UK’s libraries are taking part in World Book Day, through a partnership with the Reading Agency. Marking the celebration, more than 15m book tokens are distributed to children in the UK and Ireland. Organisers said that “book poverty” is “a very real issue” for children – one in eight disadvantaged children in the UK don’t own a single book. In 2016, for one in three of children on free school meals, the book they got with their £1 WBD token was the first they had ever owned.

According to the OECD, reading for pleasure is the single biggest indicator of a child’s future success, more than family circumstance or their parents’ educational background or income.

Earlier this week, WBD released research from the National Literacy Trust that found that only a quarter of eight to 18-year-olds now read daily, compared with 43% in 2015. The charity’s book tokens give children the chance to get a free copy of one of the 13 World Book Day titles, or £1 or €1.50 off any full price book. Through its Share a Story Live tour, the charity is also bringing authors and illustrators to communities affected by low levels of literacy, including Dundee, Bradford, Swindon and Manchester.

How to Train Your Dragon author Cressida Cowell, who is taking part in the tour, encouraged parents and children to take advantage of the WBD token: “There are things we can all do to reverse this worrying trend of a decline in children reading for the joy of it … Parents, grandparents, carers, teachers can all help by reading aloud to kids way beyond the age that they can read for themselves. Ten minutes a day really does make a difference.”