National Lottery

Baroness Andrews Excerpts

Monday 16th July 2018 Lords Chamber

[Baroness Andrews (Lab)]

My Lords, it is a great pleasure to follow such an excellent, comprehensive and forensic speech. I congratulate the noble Earl on securing this timely debate. We have the PAC report and in the past few weeks we have had the Government’s response to it—and of course we have the Government’s own review of society lotteries. All that makes for an opportunity to raise some fundamental questions about whether we can expect the same sort of success from lotteries in the future as we have had in the past.

I have to declare an interest as the deputy chair of the Heritage Lottery Fund and chair of the Heritage Lottery Fund in Wales. Like other distributors, we are responding to the implications of meeting increasing demand with falling resources in the past year. We are trying to bring as much creativity and foresight as we can muster, and I am grateful to the noble Earl for referencing that.

Since 1994 the HLF really has exceeded the best expectations in securing and revealing our heritage. In doing so it has, uniquely, worked across the four countries of the UK. I have often spoken in this House about the great value of our heritage of language, landscape and historic environment. It is a treasure that continues to grow year on year in terms of our economic prosperity, particularly in areas such as Wales, but it also contributes uniquely to the resilience of our communities, to a sense of belonging, to pride, to identity and to continuity. It is beyond praise.

Understanding that is the first step to understanding how to put it to work in the best sense in future. It is important to set out the scale, as the noble Earl did: £38 billion has been invested in the National Lottery. The Heritage Lottery Fund’s role has been to distribute £7.7 billion, which has been invested in more than 42,000 projects. I could spend the rest of the evening describing just some of them. It is very difficult to choose which.

Wherever you look—whether it is the extraordinary vitality of our global museums in London; whether it is the small, remote cottage of Hedd Wyn in the mountains of Snowdonia, a sadly deceased poet who died during the First World War before he learned that he had won the bardic poem in the National Eisteddfod in 1917; whether it is saving the very awkward capercaillie bird in Scotland, which seems to have a death wish for all sorts of different reasons; or whether it is saving a great painting or a lost park—all these things make up the pleasure and pride of communities. I pay tribute to all those people who, over those 25 years, have worked so efficiently to do such a great job.

But it has depended on the continuing success of the National Lottery itself. Until 2012 we could take that for granted, but the first recommendation of the PAC report pointed to the fact that, since the renegotiation of the contract in 2012, Camelot’s profits have gone up but the returns to good causes have gone down by 15%. Significantly, the Government agree with most of the PAC’s prescriptions for change. Put simply, fewer people are playing the lottery. We need to know why. The noble Lord has talked about society lotteries, but I shall not pursue that because he gave such a good account of it.

Other possible issues include the change in the price of the tickets, the changing nature of the games themselves or the fact that the lottery brand is now rather too familiar. The Government have said that they are looking at a range of strategic changes and the validity of expectations that are held of them. The review will conclude in the autumn, and we look forward to that. The Camelot briefing for tonight, which was very helpful, set out the four areas in which it is focused on driving change: an improved range of games, an enhanced retail offering, updated digital capability and a reinvigorated brand. All that needs to happen.

My question to the Minister is: what will be the test for success for Camelot? It is encouraging that it is addressing decline, but do the Government really think that the proposals will make a fundamental difference? What else might the Government invite Camelot to consider? In particular, when there is such an increase in online gambling, is there not a case for a review of the impact of online gambling on the lottery? Has the Gambling Commission done any research or made any estimates about that relationship?

I know that we will get a thoughtful response from the Minister. We have had a marvellous Minister in Tracey Crouch and I am sure that the new Secretary of State has the licence renewal at the top of his very full in-tray. The Government need to get a grip on this. Things are changing. Brexit will bring the loss of structural funds which support the transformation of town centres, and it will cut our environmental funds, which help conserve rare species. Local authorities are no longer the active leaders that we wanted them to be: they are under the cosh. The whole funding environment is hugely, intensively competitive. Year on year, we in HLF know that, without our funds and without the extraordinary efforts of the voluntary and statutory sectors, our heritage will be at greater and greater risk.

That certainly makes for greater uncertainty for all the National Lottery distributors. It makes planning securely very hard. We have to keep income, reserves and commitments in line. It is becoming very difficult to do that. One of the most important recommendations in the PAC report concerns the difficulty of getting access to the information we need to manage forward programmes. So it is vital in this context that we get timely projections of income for returns to good causes, and that those projections are shared between the department, the regulator and the operator.

While the PAC and the Government, rather unusually in this report, pay tribute to the unsung heroes in the shape of finance directors, they cannot plan wisely or fairly unless they can rely on forward projections. For example, while there were improvements in income towards the end of 2017, which is acknowledged by the operator, they have fallen back since the beginning of this financial year—so we need action now. For some time now, all the distributors have been dealing with the challenge of irregular or infrequent forecasts. There was some improvement towards the end of last year, but there is still no agreed understanding of their income for this year or over the next few years, despite being over one-quarter of the way through the financial year. May I press the Minister to ensure that this work is done speedily and effectively to allow for sensible planning and distribution of funds to applicants for grants? These are people who may have spent years and, indeed, hundreds of thousands of pounds in putting in their application in which they have invested such hope and expectation. We owe it to them to be able to plan securely.

It is also important, as the Minister will appreciate, that the Government take advantage of what the lottery distributors already know in their expertise. They have built up a considerable level of experience on risk and projection but, for some reason, the department still declines to share the weekly sales data that DCMS holds. I do not understand this. I urge the Minister to take the message back to DCMS. To share the data would allow a more collaborative effort to identify trends and risks; it would avoid serious issues downstream. I would also really like to hear from the Minister that the Government and the Gambling Commission are going to focus on very strong competition for the next licence, including examining the structure of incentivisation within the licence, caps on marketing and the impact of the National Lottery levy on the operator. We need the best outcome.

I would also like to hear the Minister urge Camelot to intensify the good work that it has done already in trying to address some of these problems. It needs to do more. The 70th anniversary of the NHS is one obvious thing that Camelot should focus on and celebrate. It is trying very hard—and we have already heard about the opportunities that will be presented in the 25th anniversary year—but there is still much to be done. The noble Earl was quite right: we all want people who play the lottery to know more and enjoy more of what it means for good causes. Our own research at HLF has recently confirmed that people positively want us to fund projects with a social purpose, including in particular projects that deliver skills and training to young people.

We would love to tell more stories about the human impacts and the change that has been brought about in all corners of the UK. In Wales, for example, recent townscape heritage grants to Blaenavon and Newport will lift confidence and enterprise, as surely as they will lift community spirits. As for sharing the good news for lottery players, a start was made. Last December, the “Thank You” promotion meant that over 400 National Lottery-funded attractions offered special events or opened their doors free to members if they bought a lottery ticket with them—a simple idea and a wonderful success. We want more of that. Lately, we have funded some wonderful projects, such as Jodrell Bank, the NHS at 70, Gainsborough’s House and Lake Vyrnwy in Wales. These are the sorts of things that we really want to go on doing to the best of our ability. None of that would have happened without the National Lottery. The demand is relentless. It behoves the Government really to get a grip on the situation and attack the detail of the funding.