What do you need to do to set up a library?

At my work we’re in the process of setting up a little sub-library of the main university library which will be housed in another building. The manager of that department is making trouble (even though they have been asking us to do this for a year!) by saying that we need a licence to set up a library. Now I have been a librarian for 20 years and have never heard of this, and it is probably a moot point anyway since it will be a sub-library but we want to go back to him with full certainty that he is very much mistaken! I believe that you can just have a collection of books and lend them to anyone as you like. There would be laws about income from fines and charitable status etc of course but is there anything which you know about that would even come close to needing permission or licencing for a library?