It’s simple.

All libraries enhance literacy.
Whether they’re owned by council, on someone’s bookshelf, or on the street being shared by people walking by.
Picking up a book means you practice your reading skills, whether you’re a child, an adult or someone for whom ‘paid’ books are out of bounds.
Many of our users are people who can’t get a library card (no ID), don’t have the money to buy a book, and don’t have a place to keep it.
If they’re reading, they are practising literacy.
Kids who use our libraries are practicing the habit of reading without instruction (from a teacher, or parent) – and without the need to buy a book, or check one out from a library.
If you’d like more information on how libraries help literacy, this is a fascinating paper by UNESCO.
Here’s a snippet.
All over the world libraries are dedicated to providing free and equitable access to information for all, be it in written, electronic or audiovisual form. They play a key role in creating literate environments and promoting literacy by offering relevant and attractive reading material for all ages and all literacy levels and by offering adult and family literacy classes. They embrace the social responsibility to offer services that bridge social, political and economic barriers, and traditionally make a special effort to extend their services to marginalized people. Libraries assist in finding, using and interpreting appropriate information that opens up opportunities for lifelong learning, literacy enhancement, informed citizenship, recreation, creative imagination, individual research, critical thinking, and ultimately, empowerment in an increasingly complex world.