All of the institute, including the library was situated on the top floor of the building. It was in a small alcove at the end of the institute; not where the arrow is pointing which was a private house. It was not a public library but for members of the institute, i.e. employees of the Doctor pit.
The arrow should point to the area on the top floor of the building mid- way between the window to the right of the war memorial and the end of the building adjoining the house.