Government plans to streamline the Lottery distribution process have been approved by the House of Commons Culture, Media and Sport Select Committee but concerns are mounting that the diversion of Lottery funds to the Olympics may become ?a huge potential drain on all the existing good causes.?
These and other issues arising from the licensing and distribution of the Lottery are the subject of a critical report by the all-party Committee, published at the end of March. The report attacks Government plans to siphon off Lottery income to fund London?s proposed hosting of the Olympic Games in 2012; but the strongest criticism is reserved for what it describes as the erosion of the principle of additionality, which was established to prevent Lottery income from being used to replace Government spending. Should London?s Olympic bid be successful, the Government intends to establish specific Lottery games and divert funds from sports distributors to the Olympics in what the Committee describes as a ?straightforward raid?.
The Committee also examined the creation of what it describes as an ?uber-distributor? through the merger of the New Opportunities Fund (NOF) and the Community Fund (CF), which between them have been responsible for distributing more than half of all the money raised for good causes through the Lottery. This merger, to which the Community Fund board initially refused to give its support, is due to be formalised in June and a new name and logo will be unveiled this month. Senior positions are being filled at the new organisation, to join Chief Executive Stephen Dunmore. Sir Clive Booth, currently Chair of the Central Police Training and Development Authority, has already been announced as Chairman. The amalgamated organisation will administer between £600m and £700m each year until 2009, and the report notes anxiety voiced by the specialist Lottery distributors, Sport England, Arts Council England and the UK Film Council, that the new body could take control of major projects, thus obscuring their role in the distribution process.
In evaluating the cost-cutting aspect of the merger, the report notes ?The Secretary of State told us that she expected the merger of the NOF and the CF to create savings ?within a range of 10 to 20 per cent.? However, she confirmed, this may not bring about extra grants.? Concerns about costs are also reflected in scepticism about the value of marketing activities being undertaken by the Department for Culture Media and Sport to promote Lottery distribution, including the creation of the National Lottery Promotion Unit and a National Lottery Day. While the report recognises that initiatives such as the Government?s blue plaque scheme to acknowledge funding, do help to raise the profile of Lottery projects, it questions the cost of such activities and expresses fears that they are diverting funds away from grant-giving. The Committee channels these concerns into demands for the Government to drop its tax on Lottery good causes ? something it describes as a ?double hit for the Treasury?. Dropping this tax would, the report claims, ?do more for the promotion of the Lottery as a ?good thing? amongst the public than any amount of plaques and open days.?