National Lottery Reform

Richard Fuller Excerpts

Thursday 22nd July 2010 Westminster Hall

[Richard Fuller (Bedford) (Con)]

I am indebted to you, Mr Benton, and to the Minister for the opportunity to debate the national lottery and the Big Lottery Fund.

Although I will focus my remarks mainly on issues relating to social enterprise, I would also like to pick up on a critique that was made of my hon. Friends the Liberal Democrats, suggesting that they had not noticed that there was a financial crisis. Those of us who witnessed the extraordinary sense of denial about the financial crisis in the last Government regard that as a somewhat breathtaking criticism. Perhaps a few minutes in front of the mirror might be worth while for Labour Members. Such comments undermine some of the good points they were making, particularly the exhortation regarding the importance to charities and social and voluntary organisations of long-term planning—something that was particularly absent in the latter months of the last Government.

Before looking at social enterprise and the implications of the statements that have been made today, I want to ask the Minister whether as part of his review of the lottery since 1994—I think he mentioned small tweaks on the tiller—he intends to look at some of the concerns about the impact of the national lottery on gambling. In particular, will he look at the regressive nature of the lottery in taking money from people on low incomes and its general impact on encouraging people to gamble? Those are not necessarily substantive points for the review he mentioned today, but it would be helpful for hon. Members to know whether such matters will be part of it.

In my comments on social enterprises, I am informed by and indebted to the Social Enterprise Coalition and to Michele Rigby. Michele runs Social Enterprise East of England, which is based in my constituency. I would appreciate the Minister’s response to a couple of questions. The first relates to regulation and registration. There are concerns that too tight a focus, particularly on charitable purposes, will have the unintended consequence of rendering a number of social enterprises unable to undertake the very important work that many hon. Members on both sides of the House want them to continue.

In a recent survey, 62,000 social enterprises were listed. Many of us might think that the number is much more substantial, but there are certainly 62,000. If I may, I shall give the Minister the relevant numbers in case he does not have them to hand. The maths does not add up to 100%, because of double registration, but 37% were listed as registered charities, 59% as companies limited by guarantee, 17% as community interest companies, 12% as industrial and provident societies or co-operatives, and 9% came under other forms of registration.

Can the Minister provide some assurance that as we look to the ways in which the big society’s remit is written, social enterprises that are not listed as registered charities will not be excluded purely on that basis? As the organisations are regulated in a number of different ways, it will be important to consider that as well. Those registered under a trust deed or a charitable constitution are, I think, registered and overseen by the Charity Commission.

[Cathy Jamieson]

Given the hon. Gentleman’s support for the social enterprise and co-operative sector, which I welcome, does he agree that it would be somewhat iniquitous if independent, private schools, which have charitable status, were able to apply for some of the funding when some of the very organisations that he describes would not be able to do so?

[Richard Fuller]

The hon. Lady makes a very wise point, from her point of view. In my constituency, there are splendid independent schools, which are fully involved in their charitable endeavours and do not see a conflict between the two, but see them as mutually reinforcing.

I was making a point about the registration of social enterprises. I think that companies limited by guarantee are regulated by Companies House, and community interest companies obviously have their own regulator, so will the Minister be kind enough to confirm that in the regulation of social enterprises, that will not be listed as the sole reason for their exclusion under the new rules? That would provide a lot of reassurance to many of the organisations that we are talking about.

My next point is about the important principle of additionality, which now applies in a very different economic circumstance for our country. At a time of retrenchments and necessary deficit reduction measures, it is easy to call that principle into question. That would be unfortunate. However, there are some potential tensions between the principle of additionality and the other goal—promoting the big society—part of which I have addressed through the registration of social enterprises. If we want the big society taken from a vision to a reality, we shall have to rely on the vibrancy of our social enterprises and small community groups and their ability to step up and achieve the things that we are talking about. There is a fierce urgency about enabling those organisations to have the capacity in place to do that. The hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) made a very good point about that, which I shall turn to in a minute.

As the Minister rightly said, the issues about disbursement are correctly at arm’s length. We would not like political interference in that, but can he give me some idea of whether there will be any review of the guidance to disbursement organisations, so that the overall ambitions that we all share, of seeing a more vibrant civil society and social society, are not affected because of the urgency of the times in which we are living?

My next point is about capacity building versus short-termism. In many of our constituencies, there will be charities and non-profit organisations that have been delighted to receive funding from various sources—not just national lottery schemes, but other sources. For 18 months or two years, they can start to live their dream and build their future, but then they are cut off precisely when they are starting to get traction. One concern about the programmes under the previous Government was that a solution was never found—presumably because it is extraordinarily difficult to find one—to overcome that problem.

Capacity building in social enterprises is more important now than it has ever been. We shall be relying on social enterprises to take on many more responsibilities than they may have anticipated, to achieve many of our social goals. In the review, will the Minister consider carefully how lottery funding can focus on capacity building? There have been very sensible recommendations from a number of Members, particularly the hon. Member for Kilmarnock and Loudoun, about low-cost applications. Making applications really is a bugbear in terms of an organisation’s capacity to apply and the cost of applying. There should also be more encouragement for multi-year funding of social enterprises and charities, because with that effort in place, there will be a much better long-term impact in our communities from the good works that are the objective of the national lottery fund.

[Alun Michael]

The hon. Gentleman makes a very important point. As I listened to what he was saying, it occurred to me that a fresh look at issues such as tapering might be worth while. In the old urban funding periods, for instance, there was a period when people knew what the funding was and then a couple of years when there was diminished funding, which sometimes facilitated finding new partners to ensure longer-term viability for a scheme.

[Richard Fuller]

Tapering is one option, and it is not a bad one. Actually, it is a very good option—I had not thought of it. Furthermore, with the introduction of organisations such as the big society bank and with more pressure on private enterprises to be more involved and to move beyond corporate social responsibility and into really investing in the fabric of our civil society, it would be helpful, if it was in the Minister’s remit, to connect funding sources—perhaps the initial seed funding that comes through the national lottery and the Big Lottery Fund—to other organisations. That could ensure that transitions in funding from one pot to another are handled better and that more signposting is given in the initial grant—“We will fund you for x number of years” or “We will fund you for this amount and after that, these are the two or three funding sources you can go to”. I thank the right hon. Member for Cardiff South and Penarth (Alun Michael) for making that very good point.