Clause 9 - Investment income
National Lottery Bill
2:45 pm
Richard Caborn (Minister of State (Sport), Department for Culture, Media & Sport; Sheffield Central, Labour)
I was not going to speak in this stand part debate, Mr. Gale, but if the hon. Member for Bath wants to have a debate, I shall give him some background. I hope that this debate will be more focused than the last.
Clause 9 changes the way in which income earned from the investment of the national lottery distribution fund is divided between lottery distributors. We proposed changes to the method of allocating investment income because we considered that the existing method created an unintended advantage for distributors that hold high balances in the national lottery distribution fund, thus potentially depriving communities of realising the benefits of lottery spending on the ground as fully and as soon as they otherwise might.
The proposed changes will remove that unintended advantage. The Public Accounts Committee report on national lottery distribution fund balance management, published on 18 October, said that the public benefit of lottery money is delivered only when the money is spent in the community. Distributors that follow that advice and get funds out of the door quickly will no longer be penalised because their balances are lower. This measure will not reduce overall returns, all of which will continue to benefit lottery good causes.
The proposed change has other advantages too. The July 2004 National Audit Office report highlighted a lack of clarity on the part of many distributors about their likely future income from the lottery. Of course, there will always be inherent uncertainty about that, but the proposed new arrangements will make it much easier for distributors to calculate their share of the potential future income to the national lottery distribution fund from the Department’s income projections.
The proposed new arrangements are designed to make things fairer and more transparent for all and not to penalise particular good causes or distributors. As the overall balance and distributors’ individual balances continue to fall in line with Government policy, the new arrangements need not, by the time they are likely to take effect, have a major impact on any particular good cause or distributor.