The British Library isn’t the first place I associate with contemporary fiction. For me, it’s about the Tudor manuscripts: the support and expertise of the manuscript room staff is second to none, and to the academic mind, few thrills compare to finding Elizabeth I’s distinctive handwriting on an unexpected document, or deciphering treacherous correspondence in a prayer book. But DBC Pierre it sure ain’t.

Yet under the alert leadership of Roly Keating, the man who put BBC Four on the map, the British Library is now carefully fostering a commitment to living writers, not merely the dusty and dead. In a masterstroke of curation, when I leave the manuscript room, I’m immediately confronted by Nick Lord’s vibrant portrait of Hilary Mantel, the first living writer to have a portrait in the library, and the perfect reminder that the dusty intrigues we track down among the manuscripts can speak with vitality to contemporary crises of memory. “Why does everything you know, and everything you’ve learned, confirm you in what you believed before?”, Thomas Cromwell asks his enemy, Thomas More, in Mantel’s Wolf Hall. Whereas for Cromwell “with every month that passes, the corners are knocked off the certainties of this world: and the next world too.” It’s a very 21st-century sentiment, and Mantel makes extreme claims for the extent to which Reformation thinkers like Cromwell really foreshadowed the skepticism of the Enlightenment. But it’s a passage that resonates with everyone who’s ever encountered an intellectual challenge, let alone ploughed through the self-doubt and changing parameters of a long research project. And it makes Mantel, with her dizzying mix of history and literature, certainty and doubt, an ideal inspiration.

Mantel’s portrait was the conclusion of a TV-savvy Keating’s partnership with Sky Arts, to televise the process of selecting a young artist for the commission. X-factor meets portraiture. But it’s not his only partnership with public outreach in the last month. Last night’s announcement that short-story writer George Saunders has won the inaugural Folio Prize didn’t just mark the arrival of a heavyweight new literary prize to rival the Man Booker. It was also the culmination of the Folio Prize Fiction Festival, a weekend-long conversation held at the British Library. It’s the latest phase in Keating’s determined campaign to turn the library’s labyrinthine public spaces into the literary answer to the National Theatre: a place where anyone can spend a leisurely Saturday afternoon talking books, whether or not you’ve got a ticket to the inner sanctum.

Frankly, the Folio Prize needs the British Library more than any of us need the Folio Prize. Without the festival, and its commitment to the public reader, the Folio was always going to look like a more pretentious version of the Booker.  The Folio was set up after the car crash of the 2011 Booker Prize saw worthy candidates Philip Hensher and Alan Hollinghurst excluded early on in favour of ‘readable’ authors – the literary world blamed a judging panel dominated by journalists and politicians, although I suspect some of the accusations of cheap taste were thrown in the wrong direction.

So the Folio has appointed 180 ‘ideal readers’ deemed worthy to nominate their peers to the new prize. The British Library’s festival, on the other hand, took the conversation to the rest of us, the ‘less than ideal readers’. Thank God. That doesn’t mean the institution has dumbed down; Festival organizers expected the general public to navigate discussions based around genre, voice, structure, place and context. Public engagement is always at its best when it expects the best from the public.

To give the Folio Prize its due, this year’s winner, George Saunders, accepted his prize with unnervingly salutary reminder of why we were all gathered, beyond the champagne and finger food. Saunders sees writing as an exercise in empathy: ‘much of the public discourse tells us that we are antagonistic, that we’re separate, fiction is a wonderful way to remind ourselves that actually that’s a lie.’ I’m not sure the spirit of togetherness has always reigned at literary parties, and Saunders tells me he avoids the book world, preferring to write in isolation in the Catskill Mountains – although, PR by his side, he also assured me that ‘the American is really sweet and lovely’.

Saunders affirms that the writer’s job is to create empathy between reader and even the darkest of human characters, but his winning collection, Tenth of December, pushes that to its limits: in the bitesize Sticks, a son summarises his distant father’s decline with growing detachment (there’s but a fleeting moment of self-knowledge in ‘we left home, married, had children, and found the seeds of meanness blooming also within us’). Exhortation consists of an office memo that makes Glengarry Glen Ross look gentle. But Saunders, like Mantel, is redeemed by a generous sympathy for the contradictory moral obligations we each face. His work deserves just as wide an audience.

Tags: Books, British Library, Folio Prize, George Saunders, Hilary Mantel, Literature, Man Booker Prize