National Lottery Reform

Joe Benton Excerpts

Thursday 22nd July 2010 Westminster Hall

[Mr Ben Bradshaw (Exeter) (Lab)]

I thank all right hon. and hon. Members for coming to the debate regardless of whether they have spoken. It has been good to see so many people here. Furthermore, I am grateful to the Government for giving us the opportunity to discuss these issues.

Let me start by saying that I agree entirely with the Minister’s opening remarks about the invaluable contribution the national lottery has made to our national life. Indeed, that is something on which Members on both sides of the House can agree. However, I have a number of questions about the specifics of the review and about one or two things that the Minister and other Members have said during the debate.

When the Conservatives were in opposition, they said on a number of occasions that they would return the lottery to its original four good causes: arts, sports, heritage and charities. The fifth good cause, health, education and the environment, was introduced by Labour through the National Lottery Act 1998, and it enabled lottery distributors to fund a wider range of public projects and things that the public had said in numerous surveys that they valued.

In November 2009, the right hon. Member for South West Surrey (Mr Hunt), now the Secretary of State for Culture, Olympics, Media and Sport, said:

“So one of the first things the Conservative Government will do will be to restore the Lottery to its original four good causes.”

My first question is what has happened to that commitment? When I asked in a parliamentary question whether the Big Lottery would continue to be able to fund the fifth good cause, the Minister replied:

“The Big Lottery Fund will continue to be a lottery distributor after April 2011, funding the same range of projects as it does, now but focusing on the voluntary and community sector.”—[Official Report, 21 July 2010; Vol. 514, c. 333W.]

There is an element of confusion, and I would be grateful if the Minister could clarify the matter. Given that it was one of the first things that his party said that it would do after the election, when can we expect legislation to implement that commitment? Or is it yet another commitment that has been dropped since the Conservatives arrived in government?

The Minister has begun to implement the commitment that the Government made before the election to increase the proportion of lottery revenue going into the arts, sports and heritage. However, as a number of my hon. Friends have pointed out, increasing the lottery funding going to the arts, sports and heritage will not make up for the savage and unnecessarily severe cuts that the Government appear to be intent on making to the arts, culture and sport. I am disappointed that Ministers from the Department for Culture, Media and Sport are not resisting Treasury demands in the negotiations on the comprehensive spending review. As the Minister has followed the debate very carefully, he will know that there are good economic and broad cultural arguments for protecting spending on the arts and culture. Indeed, I suspect that those arguments were why the Liberal Democrats had a manifesto commitment to do exactly that. I always made it clear that I would fight hard in any negotiations with the Treasury.

Overall spending on the arts and culture represents less than the underspend in the national health service every year. The hon. Member for St Austell and Newquay (Stephen Gilbert) said that the Liberal Democrats had a Damascene conversion because they did not realise how serious the economic situation was, but the argument that the hon. Member for Bath (Mr Foster) repeatedly made before the election was that cutting spending on the arts and culture would have such an infinitesimal impact on reducing the deficit and would inflict such damage that it was not worth doing. I would like some reassurances that when the Treasury asks the Minister and his colleagues to jump, they are not simply saying, “Yes, very nice, but how high?”

Does the Minister accept that by shifting the priorities in lottery spending, the Government are effectively cutting funding to community and voluntary groups? When the Conservatives formulated their policy in opposition, they worked on the basis that the Big Lottery Fund, which at the moment receives 60% of lottery good cause money, spent 80% of its revenue on community and voluntary groups and 20% on the non-CVS sector. In fact, as the Minister acknowledged in his opening remarks, 92% of Big Lottery’s spending went to the voluntary sector last year. That means that if Big Lottery’s share of funding is reduced from 50% to 40%, even if it is restricted exclusively to funds within the community and voluntary sector, the share of lottery funding to voluntary groups will be cut. Will the Minister explain how his leader’s big society will be helped by cutting funds to voluntary groups?

Let me turn now to the administrative costs of the lottery. In its structural reform plan, the Government state that by the end of this year they intend to

“reduce lottery distributors’ administration costs and ban lobbying activities.”

In opposition, the Conservatives were more precise:

“So we insist that admin costs should be no more than 5% of grants distributed… Self-publicity by the distributors will also be banned. As will lottery money being spent on lobbying and public affairs.”

Are the Government still insisting that administration costs should be cut to 5%? If so, perhaps the Minister can explain on what basis that figure has been chosen. As my hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson) rightly said, Big funds many community projects. The Minister will be aware that it is much more expensive to administer the costs of funding such projects. The National Council for Voluntary Organisations has also expressed concern. It estimates that Big’s current administration is 7.5% of its costs. It says:

“Because BIG funds many community projects and because of its approach to supporting those it funds, in practice these costs are relatively low. Moreover, this approach helps BIG to maximise the effectiveness of its grants, thereby achieving better value for money in the longer term. There are further concerns that pressure on administration costs may make the funding of smaller, community projects more difficult.”

Will the Minister reassure me that that will not be the result of his policy? Moreover, will he be happy to meet voluntary organisations, perhaps under the umbrella of the national council, to ensure that his drive to reduce administration costs does not make it more difficult for small community and voluntary groups to win lottery funding?

The Government’s structural reform plan states that the Big Lottery Fund will be restricted to funding the community and voluntary sector. Will the Minister confirm that the intention is to restrict it exclusively to funding the CVS sector? If so, what does that mean for schemes such as Heroes Return, which provides grants to world war two veterans to enable them to return to the battlefields where they served their country? More than 40,000 veterans and their families have benefited from that scheme. Will the Minister assure the Chamber that such an initiative can continue to be funded by the Big Lottery Fund?

Moreover, will the Minister tell us when we are likely to see the national lottery independence Bill, which we were told was needed so that the lottery

“cannot be raided by politicians for their own pet projects.”

Given that commitment, which was made before the election, will the Minister explain why the DCMS structural reform plan states that Ministers will

“direct the Sport Lottery Distributor to take responsibility for the community sports legacy following London 2012.”?

Again, I detect a slight conflict. The Government appear to be pointing in two directions at once. The Minister said that he would push forward with the proposals that were made before the election to introduce a gross profits tax. Will he outline the time scale for that?

We all agree, I think, on the diversion of money for the Olympics. The maximum contribution to the 2012 Olympics from the lottery was capped at £2.2 billion, with no more than half diverted from non-Olympic distributors. Will the Minister confirm that the Government will not raise that cap? Furthermore, can he guarantee that the Government will honour the commitment that we gave to return all the money that was diverted from good causes in full, using the proceeds of land sale after the Olympics? If he cannot do that, will he write to me after the debate?

Finally, let me ask the same question that I ask in all such debates. It would interest all Members in the Chamber if the Minister could point to a single Liberal Democrat policy on the lottery that is being implemented by the Government. Or is this yet another example of the Liberal Democrats having absolutely no influence whatever on the coalition Government?

[Mr Joe Benton (in the Chair)]

I call the Minister to wind up.