National Lottery Reform

Stephen Gilbert Excerpts

Thursday 22nd July 2010 Westminster Hall

[Stephen Gilbert (St Austell and Newquay) (LD)]

I am grateful to have been called in what is clearly an important debate. I will be outlining the Liberal Democrat position on the reforms in place of my hon. Friend the Member for Bath (Mr Foster), who could not be with us today. Before I do that, however, I want to acknowledge how incredibly valuable lottery money is.

When I think of the odds of winning the lottery, a saying comes to mind: “Don’t bet on the lottery, bet on yourself.” However, the fantastic thing about the national lottery is that that is exactly what it allows us to do; it contributes hugely to the things that allow us to better ourselves as individuals, as members of our local communities and as a country.

The various arts councils contribute to the UK’s artistic culture, which is one of the most exciting in the world. Our arts help to drive our immensely successful creative industries. However, they also nourish the inner life of everybody who engages with them. The sports distributors support activities that improve health and longevity. They promote not only self-esteem and the drive to succeed as individuals, but teamwork and co-operation.

As a country we have been bequeathed a physical heritage that is part of our national character, which the Heritage Lottery Fund helps to maintain. It also helps to preserve our local identity. In St. Austell, the Heritage Lottery Fund has provided £850,000 to regenerate the china clay museum where I worked before being sent by my constituents to this place. The museum celebrates the history of the china clay mining communities in the heart of Cornwall and provides a fascinating insight into how the industry changed and shaped the environment that I represent.

I recently attended the opening of a local art exhibition on the theme of Newquay and the sea, a display of 19th century paintings, many of which were owned or created by local people. That also benefited from £10,000 of Heritage Lottery Fund assistance. Through Big, lottery funding is directed to a host of other community groups and volunteers working on all manner of important projects. There are other benefits from promoting all those good causes and organisations—far more than I can list here—which work very hard. Indeed, as the Minister said, we have all benefited from the £24 billion that the lottery has generated for them since its creation. That does not mean that improvements cannot be made, and the coalition Government are right to look at ways to make the most of lottery money.

The lottery reforms, as has been mentioned, will lead to a boost in funding for the arts, heritage and sport. The relevant distributors have welcomed the changes. The Minister will be aware that no one funding stream can completely replace another: £1 million of public money is not the same as £1 million of private money, and £1 million of lottery money is something else again. There are plans to boost private donations for the arts, for instance, and that is welcome, but we must still try to ensure that risky projects, smaller groups and organisations based outside London, such as in the constituency of the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) or, indeed, in the south-west, all of which may be less appealing to private donors, do not miss out in the reforms. We must remain aware that sometimes funding is conditional. Money is offered from one source only because another has signed up, and if one goes there is a risk the other will also be withdrawn.

Therefore, the boost in lottery funding will not be a panacea, but it is still an important step. To make the most of it we need to ensure that cuts will not be implemented immediately, but phased in gradually. I understand that statutory instruments to enact changes to lottery distribution will be laid in September, according to recently published DCMS plans, but it will be 2012 before distributors receive their full 20% of good cause funding. Bearing in mind that £88 million of cuts have already been found this year, our side of the coalition would like reassurances that spending reductions will be restrained until that money comes into play. As the Minister said, the money that was redirected towards the Olympics will also start to find its way back, and will provide some relief; but we seek further reassurances.

The coalition agreement contains a promise to look more closely at a gross profits tax system for the lottery. Camelot’s figures showed that that would generate many millions of pounds of extra income for the Exchequer, but there has been little movement since the coalition agreement was published, and I should be grateful if the Minister would tell us what recent discussions have taken place with the Chancellor about gross profits tax, and when we can expect further announcements. Overall, we want greater urgency from the Government on those points. Most importantly, I urge the Department not to front-load the cuts but, instead, to phase them in, so that they begin to bite only when the new funding sources that I have mentioned become available.

That brings me to the matter of how we handle cuts to administration. Under current plans, lottery distributors will be instructed to reduce their spending on admin to below 5%. It is of course right to make the most of limited funds and ensure that they are spent as efficiently as possible, but, again, such cuts need to be implemented intelligently. As other hon. Members have said, and distributors have made clear in representations to us, distributors are not just banks doling out large sums of money. Indeed, the Public Accounts Committee, in a report in 2008, considered the efficiency of grant making and said:

“The Big Lottery Fund has increased the spread of successful applications across the United Kingdom and from different social groups”.

The report goes on to stress the importance of making funding available to small organisations, and stimulating higher-quality applications. To provide the support needed to make that happen, distributors need dedicated backroom staff. Such staff should be seen as valuable assets, not unnecessary paper-pushers.

[Mr Ben Bradshaw (Exeter) (Lab)]

It would be helpful to hon. Members if the hon. Gentleman would explain when the Liberal Democrats changed their policy from their manifesto commitment of protecting spending on arts and culture, which the hon. Member for Bath (Mr Foster) repeated ad nauseam before the election, to their present supine acquiescence in what are likely to be savage cuts by the coalition Government.

[Stephen Gilbert]

The right hon. Gentleman was a member of the Government who left the country in a situation that meant that some difficult choices had to be made in the negotiations between the two coalition parties. If he lets me finish my remarks he will see that I am trying to encourage my right hon. and hon. Friends in the Government to make the changes as softly as possible.

Backroom staff should be seen as valuable contributors to building the capacity of the sector. Even if a small organisation does not eventually succeed in securing a grant, the recommendations that a distributor makes can improve the operation that it is advising. The risk is that distributors will have to make a few large grants because making lots of small grants becomes too expensive. Small organisations should not lose out as a result of cuts. For that reason, such “hand-holding” should not fall within the definition of administration; I should be grateful if the Minister would address that point.

I have mentioned the PAC’s assessment of Big and its valuable work. My constituency has benefited from around £4.5 million in Big awards since 2004. Some of them are as large as the £1 million given to the Eden project; others are as small as the few hundred pounds offered to war veterans, their families and their carers, so that they could travel to memorial services or the places where they saw active service. There are already many deprived communities around the country and the challenges that they face will not get any easier as we try to get a grip on the country’s miserable financial situation—an unwelcome gift from the previous Administration. Big, and the organisations that it supports, will have an important role in creating opportunities and making such places better places to live. I note that some have received more money than others in the past, and that some—including places in my own constituency—are much more deprived than others. I urge Big to rise to that challenge, and funnel money where it is most needed.

Overall, I welcome the Government’s intention to prevent abuses of lottery money. Lottery funding is not a piggy bank to be dipped into to plug Government spending or fund ministerial pet projects. However, we are concerned that limiting Big to funding the voluntary and community sector only could mean that a lot of good projects miss out. There are concerns that individuals could no longer be funded—such as the veterans I mentioned from my constituency, who were helped by the “Heroes Return” scheme. Sometimes a statutory body, such as a parish council, or a school, may be better placed to implement a project. If the aim, for example, is to reduce antisocial behaviour, and a school can do that by putting on after-school activities, why not give the money to the organisation that is best placed to do that? Biscovey junior school in my constituency received an award to do just that by involving older boys in its choir.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

I respect the hon. Gentleman’s arguments, but is there not a risk that when organisations, such as schools with after-school clubs, try to do more and more activities, it will start to dilute their original purpose? The same is true of a parish council. Perhaps instead voluntary organisations could be allowed into that area to provide different solutions, rather than dealing with things in a state-controlled environment.

[Stephen Gilbert]

It depends on one’s understanding of the big society. My understanding is that we should be encouraging more groups and individuals to participate in creating vibrant, thriving communities; it will depend on the organisations.

I have talked about the need not to exclude the groups that are best able to carry out projects from receiving the money. There are relevant groups benefiting from the 8% of Big funding that does not go to the voluntary and community sector. It makes sense to make the most of what they can offer, rather than shutting them out completely. We might consider some kind of community benefit test. That would achieve our goal of ensuring that lottery money is not being used to plug gaps in local service budgets—I think that was the point that my hon. Friend the Member for Suffolk Coastal (Dr Coffey) was making—but would still allow Big to fund projects that clearly benefit the community, even if the funding goes to a statutory body, a social enterprise, or an individual. It would have the added advantage of future-proofing Big. When the lottery was first created, we did not anticipate the increasing importance of social enterprises. It is important that any restrictions on Big are flexible enough to enable it quickly to embrace future innovations and changes. I welcome the recent announcements about the big society bank, which will work to enable similar projects, but it seems worth giving the Big Lottery Fund the flexibility also to fund projects in its own way.

There are concerns that voluntary and community organisations could see a reduction in the amount of funding that they receive if Big has its funding capped at 40%. Currently, it receives 50% of all good cause money, of which 46% goes to VCOs. I hope that the Minister can provide some reassurances on this matter, as well as considering the other suggestions that I have made.