Clause 8 - Reallocation of funds
National Lottery Bill
1:15 pm
Don Foster (Shadow Secretary of State for Culture, Media & Sport, Culture, Media & Sport; Bath, Liberal Democrat)
I am most grateful, and I will obviously abide by your ruling. The proposal is that the Secretary of State be given the power to hand over money in circumstances in which distributors have not got rid of their balances in a sufficiently timely manner. I was just about to make the point that, without the powers that the Minister seeks, there has already been significant movement in that regard. The Minister will remind us that, in 1999, the balances stood at £3.7 billion, but by May this year they were down to £2.4 billion. That significant reduction has taken place without the need for the type of action that the Minister proposes in the clause. The power in the clause will be increased by the two Government amendments in the group.
The additional powers are potentially unnecessary, given the successful reduction. My amendment mentions the NAO because there is a real issue about how rapidly and to what extent we want to reduce balances. The NAO, which is the body that I want to involve in making the decisions, addressed this matter in last year’s report, “Managing National Lottery Distribution Fund balances”. I accept that there is a more recent report, which the Minister referred to, but this one states:
“The build up of balances at the start of the National Lottery reflected the... time lag between money being paid into the National Lottery Distribution Fund and it being awarded to and drawn down by grant recipients... The current level of balances is therefore the result of the low rate of drawdown compared to income in the first four years of the Lottery.”
Critically, it continues:
“There can be a significant gap between a grant being awarded and the project starting to incur expenditure and draw down funds.”
The Heritage Lottery Fund, for example, reports that its largest grants—those of more than £5 million—are paid out on average over four years and two months, although some take as long as eight years. The HLF may well be in a position where it has allocated the money, but has not yet given it out. It reported in a brief that I think that all Members of the House received that, far from its balances being underspent, as was implied, it was actually overcommitted in terms of its planned expenditure by £175 million.