Clause 7 — Distribution of lottery funds

Orders of the Day — National Lottery Bill – in the House of Commons at 3:45 pm on 19th January 2006.

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Photo of Mark Field Mark Field Shadow Minister (Culture, Media and Sport) 3:45 pm, 19th January 2006

I beg to move amendment No. 2, in page 5, line 14, leave out 'prescribed'.

Photo of Michael Lord Michael Lord Deputy Speaker (Second Deputy Chairman of Ways and Means)

With this it will be convenient to discuss the following amendments:

No. 4, in page 5, line 19, at end insert—

'(2A) After subsection (3) insert—

"(3A) Not less than 70 per cent. of the sum allocated under subsection (3) (d) shall be allocated to bodies (other than public bodies or local authorities) whose activities are carried on not for profit.".'.

No. 3, in page 5, line 20, leave out subsection (3).

No. 5, in page 5, line 38, at end insert—

'(da) persons that the Secretary of State considers to be representative of bodies (other than public or local authorities) whose activities are not carried on for profit,'.

No. 11, in clause 14, page 9, line 13, leave out 'comply with' and insert 'take account of'.

No. 10, in page 13, line 2, leave out clause 19.

Photo of Mark Field Mark Field Shadow Minister (Culture, Media and Sport)

[Interruption.] And people say that there is no bugging in the House.

May I take this opportunity to thank the Minister for his earlier kind words about my new Front-Bench role? We have a number of things in common. We are both keen football fans—a rarity, perhaps, among Opposition Members, but less so among Labour Members. The Minister might not recall that I first met him some years before I was elected to the House at the erstwhile ground of Reading football club—my home town—at Elm Park. Unfortunately, Reading have remained a thorn in the side of Sheffield United, and I suspect that they will remain so for much of this season, as they both try to get into the premiership next year. Good luck to the Blades and good luck obviously to the Royals as well.

The Minister and I also have another thing in common: we share a birthday. It may be obvious that he is a few years older than me. Suffice it to say that he came of age on the day that I was born, and of course coming of age in 1964—the year that I was born—was a somewhat different proposition to what it may be today. There is one other Member of the House with whom we share a birthday, although he does not attend regularly: Mr. Adams. Suffice it to say that if I grow a beard, we will be almost indistinguishable as a trio of people born on 6 October. However, enough of this frivolity, Mr. Deputy Speaker, let me turn to amendments Nos. 2 and 3.

A major theme of the Bill is the way in which the Secretary of State is taking more power over lottery expenditure than she has at present. Worry about that was expressed on Second Reading and in Committee, and it is one of the reasons why we have tabled the amendments. Section 22 of the National Lottery etc. Act 1993 sets out the division of funds among good clauses. Clause 7(2)(b) of the Bill will merge the charitable, health, education and environmental pots for the purposes of creating the Big Lottery Fund. However, that sum is allocated for "prescribed expenditure", rather than expenditure that falls simply within the specific categories set out in section 22 of the 1993 Act. The expenditure is, of course, prescribed by the Secretary of State by order.

Amendments Nos. 2 and 3 would remove the Secretary of State's ability to prescribe expenditure in such a way. The Big Lottery Fund should be able to spend on any matter that its objects allow, rather than be limited to the pet projects of any Secretary of State. We have in mind a situation in which there is discretion in the hands of the distributor, instead of a mandatory stick of compliance that is wielded by the Secretary of State.

The Bill sets out clearly and transparently the purposes of Big Lottery Fund expenditure, but we do not think that that should be narrowed down by the Secretary of State's orders. We will run the risk of that happening unless the amendments are accepted. While the Secretary of State has powers over spending due to sections 25 and 26 of the 1993 Act, the prescribed expenditure is a new and further way of directing funds. We find the proposal objectionable and think that we need some means of overturning it. In summary, amendments Nos. 2 and 3 would put the Big Lottery Fund in the same position as other distributing bodies and remove the prospect of the Secretary of State being able to override it. We may return to that matter later in the debate.

Amendment No. 4 would apply to charitable and voluntary groups that are not charities. It would put in the Bill the assurance that the Minister gave on Second Reading that some 60 to 70 per cent. of Big Lottery Fund expenditure would go to voluntary or community groups. We decided that as the Minister is a generous man and he intended to provide reassurance to those groups, we would pitch for the higher figure of 70 per cent. in amendment No. 4.

On Second Reading, the Minister said:

"I acknowledge that some have said that a Big Lottery Fund could lead to voluntary and community sector organisations losing out. I can give a categorical assurance that that will not happen . . . The Big Lottery Fund has given a clear undertaking that 60 to 70 per cent. of its funding will go directly to the sector."—[Hansard, 14 June 2005; Vol. 435, c. 170.]

It was thus somewhat disappointing that the Minister resisted such an amendment in Committee, when he said:

"As that undertaking has been given by the boards of the Community Fund and the New Opportunity Fund, not the Government, it would not be appropriate to enshrine it in the Bill" and

"It is not for the Government to decide whether it is 60 or 70 per cent.; it is a decision for the Big Lottery Fund."—[Official Report, Standing Committee A, 25 October 2005; c. 40.]

As I pointed out when I spoke to amendments Nos. 2 and 3, we want to ensure that the Big Lottery Fund has proper discretion. Given the assurances that were made on Second Reading, I hope that the Minister will accept amendment No. 4.

Indeed, on Second Reading, the Minister said:

"I give a guarantee that between 60 and 70 per cent. of the Big Lottery Fund's income will go to communities or charities."

In case there was any mistake, his ministerial colleague, the Under-Secretary of State for Culture, Media and Sport, James Purnell, said in the same debate:

"We guarantee that between 60 and 70 per cent. of Big Lottery Fund grants will go to the voluntary sector"—[Hansard, 14 June 2005; Vol. 435, c. 175, 218.]

A Government guarantee was given to the House on Second Reading. Both Ministers who spoke in the debate made it clear that the matter was for the Government to decide, which is why amendment No. 4 should be accepted.

Amendment No. 5 is designed to add to the persons—bodies representing the voluntary sector—who need to be consulted before the Secretary of State prescribes expenditure. It is based on proposals by the National Council for Voluntary Organisations, which helped the Conservatives and Liberal Democrats to prepare for our discussion on Report. I shall also give it credit where credit is due at a later point. I understand that the hon. Members for East Dunbartonshire (Jo Swinson) and for Bath (Mr. Foster) put their names to the amendment in Committee.

Whether particular voluntary organisations or their projects will be able to obtain grants from the Big Lottery Fund will depend on whether their activities are within the expenditure prescribed by the Secretary of State. She should therefore identify representative bodies and ensure that she consults them before making such important decisions.

There has been concern about consultation on lottery issues. The NCVO concludes:

"the Department for Culture, Media and Sport . . . and its affiliates have frequently ignored or overlooked" a range of bodies that perhaps should have been consulted. I appreciate that the charitable and voluntary sector in particular is in a constant state of flux, with bodies starting up, closing down or amalgamating at any one time. It will be difficult to keep a rigorous list of those groups that should be consulted, but concern has been reiterated by a number of bodies about whether there has been sufficient consultation. On that basis, I hope that considerable thought will be given to what we are trying to do to ensure that a proper and comprehensive consultation process takes place.

We want agreement on the consultation between the DCMS and the voluntary and community sectors. The NCVO gave a specific example. It felt that there was

"A series of failures over an 18 month period by the DCMS to consult with the voluntary sector in a meaningful or clear way in regards to the proposed merger of the Community Fund and NOF."

On multiple occasions during that period there were also breaches of its consultation code. Many of us, as constituency Members, will have anecdotal evidence of that. Many of my residents and local groups are concerned about another aspect of the DCMS—the royal parks. They think that they should be consulted from time to time and feel outside the consultation loop. As I said, I appreciate that rigorous consultation is difficult when a large number of groups is set up and amalgamated, but it should be given proper consideration.

I again thank the NCVO for its assistance in helping us to propose amendment No. 11.

Clause 14 covers the functions of the Big Lottery Fund, including the power to distribute funds and to give advice, and the policy and financial direction of the fund. The amendment would ensure that the statutory framework for the new distributor more accurately reflected the statutory framework of the former distributors. The Community Fund was required only to take account of such policy directions while the New Opportunities Fund was required to comply. Since its creation in 1993, the Community Fund has been required to take account of matters concerning grant making and the conditions under which the money is distributed by the Secretary of State. That should continue with the amalgamation of the funds into the Big Lottery Fund. We are suggesting that we have continuity in the manner in which the issues are debated.

There was concern among voluntary and community sector organisations at the time of the merger that the new distributor would more closely resemble the New Opportunities Fund than the Community Fund, representing a significant increase in Government control of funding for the charitable good cause. In Committee, the Minister said:

"We are combining NOF with the Community Fund and the Millennium Commission in the Big Lottery Fund, and we are taking no more powers than already exist under NOF."—[Official Report, Standing Committee A, 27 October 2005; c. 112.]

In oral questions as recently as 24 October last year and elsewhere, assurances were given that the Big Lottery Fund would not be subject to any greater powers of direction than its former distributors. It now transpires, however, that that means no greater powers of direction than were given to the New Opportunities Fund. Had that been mooted at the time of the merger, it would probably not have received such overwhelming backing from the voluntary and community sector, and certainly not from the NCVO.

In its submission to DCMS in June 2003, the NCVO stated:

"The Secretary of State currently has the power to specify the initiatives to which NOF will give effect (i.e. the programmes which it is required to run) . . . To strengthen the independence of the new body and the additionality of its funding"—

I will not reopen our earlier debates on that subject, but the submission refers to the additionality of funding "both actual and perceived". Perception is important, as we discussed in relation to the last amendment. The submission said that, to strengthen the independence of the new body and the additionality of its funding

"there should be no comparable powers in the legislation setting up the new body."

Concerns about the New Opportunities Fund will multiply unless we use the words "take account of" instead of "comply with".

I hope that the Minister accepts that perception is important. The lowest common denominator—perhaps, from the Government's point of view, it is the highest common factor—means that there will be more Government control, which is not healthy. The NCVO submission to DCMS in June 2003 said:

"NOF only has the scope to consult on the way in which initiatives will be administered, not on what those initiatives will be. This is in contrast to the Community Fund which has the freedom to set its own strategic direction, priorities and programmes, following consultation with stakeholders, including the Secretary of State, albeit within broad Policy Directions.

The new body should be given the freedom and independence, in particular from government, to set its own strategic direction, priorities and programmes after consultation, within a broad framework set by the legislation and Policy Directions."

The control afforded to the Secretary of State in clause 14 as currently drafted threatens to undermine the independence of the Big Lottery Fund. It is vital that lottery distributors remain free from Government interference but accountable to Parliament. Research shows that the public are strongly in favour of the national lottery, particularly if it remains independent of the Government. Some 73 per cent. of respondents to an ICM opinion poll commissioned only last year said that an independent public body should decide how lottery money is spent. In Committee, hon. Members were provided with illustrative policy directions, and the Minister gave us the assurance that the Government have no intention of using those powers to intervene in individual grant decisions. Nevertheless, the future independence of lottery distributors cannot be guaranteed if those powers remain in the Bill. I hope that the Minister will consider our arguments carefully, as they are at the heart of several of our amendments and we intend to divide the House if we do not receive a satisfactory response.

Finally, with your consent, Mr. Deputy Speaker, I do not wish to press amendment No. 10. We have expressed concern that there is little reason to change the definition of charitable expenditure in section 44 of the National Lottery etc. Act 1993. There is certainly a good case for updating the guidance to ensure that it enables the new distributor to fund all the relevant organisations. However, my party takes seriously the work of organisations such as the Social Enterprise Coalition, whose representatives we have met on many occasions. The coalition's opinion is that the new definition proposed by clause 19 will give the lottery much greater scope for funding social enterprises that would otherwise fall short of the definition and be outside the scope of a lottery award. We appreciate that the issue should be subject to further consultation so that we get it right, and I hope that the Minister can initiate such consultation before the Bill goes to another place. On that basis, although we do not seek to press amendment No. 10, we trust that the other amendments that my colleagues and I have tabled will receive further consideration.

Photo of Jo Swinson Jo Swinson Opposition Whip (Commons), Shadow Spokesperson (Culture, Media and Sport) 4:00 pm, 19th January 2006

I take this opportunity to welcome Mr. Field to his new role on the Front Bench. I am sure he will find it a very fulfilling one. He mentioned that he did not have the enjoyable experience of serving on the Standing Committee, which I certainly found interesting, but no doubt there are many future Committees for him to look forward to.

As has been outlined, amendments Nos. 2 and 3 remove the prescriptive powers of the Secretary of State which would otherwise be introduced. We support that. The view has emerged through Second Reading, Committee and Report that it is much better to ensure that lottery distribution is kept as independent of the Government as possible. That view is supported by the public. A poll for the National Council for Voluntary Organisations found that 73 per cent. of people wanted lottery funds to be distributed by an independent body. As the Bill is drafted, the Big Lottery Fund is not such a body, as the Secretary of State has the power to prescribe to whom it gives money and what it does. We support amendments Nos. 2 and 3.

Amendment No. 4 also revisits ground that was covered in earlier stages of the Bill regarding the percentage of the Big Lottery Fund's funding that will go towards communities and charities. On Second Reading, as has been mentioned, the Minister pointed out that that would be between 60 and 70 per cent., but in Committee he was unwilling for that figure to be written into the Bill, as called for by amendment No. 27, which both Opposition parties supported. We still believe it is important for that assurance to be enshrined in the Bill.

In Committee my hon. Friend Mr. Foster argued that the Big Lottery Fund had come to the figure of 60 to 70 per cent., but without any assurances, there was no guarantee that it would not change its mind at some later date. After all, the members of the Big Lottery Fund would no doubt change, and Ministers have even been known to change. Writing the figure into the Bill would give communities and charitable organisations the assurance that they seek.

The Minister's argument was that it would not be helpful to have that set in stone. We must remember that the original National Lottery etc. Act 1993 set in stone the percentages of good causes money that had to be distributed by each distributor. The National Lottery Act 1998 adjusted those figures, but set them in stone. The Horserace Betting and Olympic Lottery Act 2004 adjusted the figures again, and once more they were set in stone.

The Bill itself proposes changes to the proportion of funding going to various bodies. The Act as amended will contain such specifics as the fact that 2.6 per cent. of the 16 per cent. of lottery money going to sport should go to the Sports Council for Northern Ireland, and that 1.16 per cent. of the 16 per cent. spent on arts should go to Scottish Screen, so I am a little confused about how the Minister can argue for all that prescription—all those powers to tell the Big Lottery Fund what it should be doing—and then say that it would be a problem to set in stone the percentage of the money that should go to voluntary organisations. That does not seem to fit. As we know, things change, and an assurance in the Bill would be a welcome guarantee for those involved.

Amendment No. 5 deals with a related issue—involving the voluntary sector in consultation. As was mentioned in Committee, the Department for Culture, Media and Sport is not usually judged to have a good record on consulting the voluntary sector. [Interruption.] It was mentioned in Committee on various occasions that there were concerns about how that was done. Including the new wording in the Bill would help to enshrine the best practice. If the Minister feels that the Department has a good record of which it can be proud, he will have no difficulty including those lines in the Bill to ensure best practice. If the Secretary of State is to have the power to prescribe expenditure that is likely to go to not-for-profit organisations, those organisations have a specific interest in the new power and should be consulted when it is used. That should be included in the Bill.

Amendment No. 11, too, would restrict the powers of the Secretary of State. The current wording would force the Big Lottery Fund to comply with decisions by the Secretary of State, rather than taking account of them. I have no problem with the Secretary of State advising, giving counsel or putting points to the Big Lottery Fund. That is fair enough, but the power to make it comply is a step too far. In Committee, the Minister said:

"I have already announced that we have adopted a light touch on the direction of the Big Lottery Fund."—[Official Report, Standing Committee A, 27 October 2005; c. 110.]

In my view, a light touch involves cajoling, encouraging or putting forward points, not making an organisation comply. How would the Government respond if, for example, unwelcome stories appeared in the press? Would they encourage the Big Lottery Fund to change its awards? I think that an advisory role is much more appropriate, and many hon. Members on both sides of the House share that view.

In a letter dated 1 November to Denis Vaughan, president of the Council for the Advancement of Arts, Recreation and Education, Sir John Major, who, as has been said many times in the course of this Bill, was the architect of the lottery, said:

"It is scandalous how the Government have so emasculated the original purpose of the Lottery and I do take every suitable opportunity to raise this matter publicly. I shall continue to do so until the resources that were intended for the original good causes are returned to them."

It is important to ensure that the lottery's independence is preserved, and the Secretary of State's powers should therefore be restricted.

I was interested to hear the hon. Member for Cities of London and Westminster withdraw amendment No. 10. We voted against clause 19 in Committee, but we understand its impact in allowing social enterprises to receive funding—social enterprises can often deliver projects effectively, and I know that hon. Members on both sides of the House support them. Clause 19 also raises some concerns about additionality, which we have already debated today. I hope that those concerns are addressed and that clause 19 is not used to put lottery funding into Government projects, which is not what the lottery was set up for.

Photo of Charles Walker Charles Walker Conservative, Broxbourne

It is always a pleasure to follow Jo Swinson. One so young, but so brilliant; she is an example to us all.

I want to focus on amendment No. 11, because the national lottery should be independent of Government interference. Whatever the Government of the day, the lottery should be free from the political whims and imperatives of the moment. For example—God forbid—the Big Lottery Fund could find itself being directed towards marginal seats in the run-up to a general election. I am sure that the Minister does not want that to happen, but there is no point in having power unless one uses it.

The hon. Member for East Dunbartonshire has pointed out that 73 per cent. of people interviewed by ICM in 2004 wanted the lottery to remain independent of the Government, and their voices should be heard. The lottery should be free to decide who receives money. There will always be high profile worthy causes that attract the national lottery's attention and money, but we are a diverse country, so there will always be minority cases, too.

In giving the national lottery the power to award grants, we must remember that mistakes will be made. Such mistakes might not go down well in the national media, and the tabloid press might make a stink; guinea pig farms was one such example cited in Committee. We hear a great deal about asylum seekers and single mothers, but I feel that we, as politicians, are too often led by the tabloid press. Metaphorically speaking, I sometimes think that we should give two fingers to the tabloids and focus on running the country and doing what we think is right, as opposed to chasing headlines and trying to appease people who make a big stink about issues of little importance. If we give the national lottery independence, it will sometimes make unpopular decisions, but that is a price worth paying, and as a politician, I would support it in making such decisions.

Independence does not mean this thing called "The People's Millions", whereby the Big Lottery Fund will team up with ITV to have a sort of people's panel that will vote on which communities get what awards. Those awards will account for £50,000, and perhaps £5 million or £6 million will be given away each year. We are not too short a step away from moving on from that to ITV taking us to a geriatric ward and a children's ward, and asking voters to decide who gets the money—"Do the kids get to stay in hospital or do we throw the old people out on the street? You, the viewers, decide." That is pretty obscene. I have deep problems with the idea of a TV show deciding which communities get what money.

As I have said before—I am getting a little repetitive—I do not believe that it should be up to the Minister to direct the Big Lottery Fund on where it should be spending money. That should be a matter entirely for its board. Amendment No. 11 would require the Big Lottery Fund to take account of the Minister's view but not to comply with it. That would be a step in the right direction.

The Big Lottery Fund is in danger of being seen as a body of placemen. After all, the Secretary of State will appoint the chair and all the members and direct them. One could say, "Let's just get rid of the Big Lottery Fund and the charade of independence and put all the decisions in the hands of the Secretary of State and her colleagues."

Photo of Richard Caborn Richard Caborn Minister of State (Sport), Department for Culture, Media & Sport 4:15 pm, 19th January 2006

Let me my preface my remarks by responding to the hon. Members for Broxbourne (Mr. Walker) and for East Dunbartonshire (Jo Swinson). They should bear in mind that the Bill was drafted after very wide consultation. Out of that consultation came the broad themes that we should advance through the Big Lottery Fund; creating opportunities, and promoting community learning, safety, cohesion and well-being. That is the high-level direction that is given by Government to the Big Lottery Fund.

We are talking about one of the most successful lotteries in the world. Over the past year or so, the take has gone up as more people have participated. It has been hugely successful in terms of the Olympics. Well over £4 million has already been banked, and we only won the Olympics on 6 July last year. The general public have responded to that.

The hon. Member for East Dunbartonshire said that we have a bad record on consulting the voluntary sector. In fact, when we consulted it on the terms of reference, we were accused of consultation fatigue. The accusations swing from one extreme to the other. Nevertheless, we will continue to have these positive consultations. The proposal to include a statement about additionality in the annual report to Parliament was made by Stephen Dunmore, the chief executive of the Big Lottery Fund, in consultation with the voluntary sector. That was a significant move.

This group of amendments is concerned with the Big Lottery Fund and what it will spend its money on. We discussed identical proposals in Committee at some length.I have set out clearly our reasons for resisting the amendments. No new evidence has been produced to support the amendments since our Committee proceedings, so my comments today will mirror what I said then.

Amendment No. 2 would remove the Secretary of State's power to prescribe expenditure for the new Big Lottery Fund good cause. Amendment No. 3 would remove the related order-making power. Those amendments would mean that the Big Lottery Fund was given 50 per cent. of all the lottery good cause money to spend on anything that was charitable or connected with health, education or the environment, without further recourse to Parliament. That is simply not sensible. The new lottery good cause is both broad in scope and large in terms of the percentage of lottery money allocated to it. The other good causes of arts, sport and heritage are relatively narrowly prescribed areas.

Within those relatively narrowly prescribed areas, existing legislation further prescribes sums to be distributed by different distributors, as has already been shown. That has the effect not only of limiting who can spend the money but restricting what it can be spent on. For example, prescribing the percentage to be distributed by the Film Council in effect prescribes the percentage of money from the arts good causes that must be spent on film. Parliament took the view in 1993 that such arrangements were necessary to ensure the effective distribution of lottery money. The powers in the Bill are not so different in effect, and it is our view that they are as necessary now as they were in 1993.

Creating a large and responsive good cause was one of the main reasons why we wanted to bring the Community Fund and the New Opportunities Fund together. However, given the breadth of the new good cause, we need to be able to set out at the highest level the types of expenditure on which the Big Lottery Fund should focus. It is right that that should be done in a transparent and accountable way, and that there should be proper parliamentary scrutiny of the process. That is why we are clear that that should be done by secondary legislation and subject to the affirmative resolution procedure.

The order-making powers in clause 7 will allow us to prescribe the three high-level themes of community learning and creating opportunity; promoting community safety and cohesion; and promoting well-being. I explained in Committee that the Big Lottery Fund has consulted widely on the three themes. Some hon. Members unfortunately sought to belittle this consultation, saying that the 850 responses was hardly a representative sample. However, the respondents included 429 voluntary and community sector organisations, 178 local authorities, 43 health authorities or primary care trusts and 30 local education authorities or schools. Between them, those bodies represent millions of people.

Fifty-eight per cent. of the respondents agreed that the themes provide a sensible and flexible strategic framework for future funding. Only 5 per cent. disagreed. The order-making powers also allow us to prescribe devolved expenditure, which will be the responsibility of new country committees, subject to directions issued by the relevant devolved Administrations.

The Bill represents a significant devolution of power to Scotland, Wales and Northern Ireland, and the ability to prescribe devolved expenditure is central to achieving that. Without those powers, devolved arrangements in the Bill will not work. For the reasons I have given, we cannot accept amendments Nos. 2 and 3, and I ask the hon. Member for Cities of London and Westminster to withdraw them.

Amendment No. 4 would require the Big Lottery Fund to allocate 70 per cent. of its funding to bodies other than public bodies or local authorities whose activities are carried out not for profit. I well know the desire for reassurance on that matter. It has wrongly been suggested that the loss of the separate charitable good cause will cause voluntary and community sector organisations to lose out.

We fully recognise the vital role played by voluntary and community sector organisations in our society. Such organisations have benefited enormously from the success of the national lottery and we are determined that that should continue. The Big Lottery Fund has given an undertaking that 60 to 70 per cent. of its funding will go directly to voluntary and community sector organisations. That is a significantly higher proportion than has been the case under the New Opportunities Fund and the Community Fund combined.

At the moment, only the Community Fund's share of the money—16.6 per cent. overall or 33.3 per cent. of the Big Lottery Fund half—is allocated to charitable expenditure. The Big Lottery Fund's undertaking will ensure that, in future, voluntary and community sector organisations can count on twice as much—I repeat, twice as much—money as before.

Much has been made of the nature and ownership of the undertaking. Let us be clear about that now. The "Oxford English Dictionary" defines an undertaking as

"a formal pledge or promise to do something".

That is exactly what the undertaking amounts to; a formal pledge or promise that 60 to 70 per cent. of Big Lottery Fund money will go directly to voluntary and community sector organisations. By any standard, that is a huge increase compared with the moneys going to those organisations now. The undertaking has been given by the boards of the Community Fund and the New Opportunities Fund—now operating as the Big Lottery Fund—not the Government. We fully support the undertaking but we do not need to repeat it or to enshrine it in the Bill.

We have heard much during this debate about the need for less prescription and less Government control. It has been said that lottery distributors should be independent and make their own decisions, free from Government interference. But when it suits the Opposition for something to be prescribed by the Government, their fears about compromised independence seem to evaporate. They are happy for the Big Lottery Fund to spend 50 per cent. of all lottery good cause money without further recourse to Parliament, but they do not trust the fund to deliver on a formal pledge to the voluntary and community sector.

I believe that the Big Lottery Fund has done everything possible to show that it intends to deliver on its undertaking and to do so in a transparent and accountable way. The fund has worked closely with key voluntary and community sector stakeholders to develop the definition of voluntary and community sector organisations for the purposes of dispensing the 60 to 70 per cent. undertaking. It has invited key stakeholders to a lunch on 16 February to review the progress that has been made and to discuss further guidance on what will be funded under the definition. The Big Lottery Fund has already said that it will ask independent auditors to monitor where its funding has been going, and that the results will be published in the fund's annual report, which will be laid before Parliament.

The undertaking to the voluntary and community sector is unique. No other type of organisation is guaranteed a percentage of lottery funding. The undertaking will ensure that voluntary and community sector organisations benefit as much, if not more, from the lottery in future as they do now. There is no question but that the Big Lottery Fund will deliver on its formal pledge. I am not persuaded of the need to include provisions on this matter in the Bill, and I hope that amendment No. 4 will not be pressed to a vote.

Amendment No. 5 would add to the list of people whom the Secretary of State must consult before making a prescribed expenditure order

"bodies (other than public or local authorities) whose activities are not carried on for profit",

—that is, the voluntary and community sector. We would certainly expect to consult widely with representatives of the voluntary and community sector before making any orders. Although the amendment seems to assume that representatives of the voluntary and community sector are the only people with a legitimate interest, we would also want to consult other groups, for example local authorities and, importantly now, social enterprises. So we require a degree of flexibility in our approach.

There is a statutory requirement to consult the Big Lottery Fund and the devolved Administrations because, unlike representatives of the voluntary and community sector, they are directly affected. I am aware that precedents of a sort exist in certain other legislation requiring consultation with particular groups of people. However, each piece of legislation is considered on its own merits, and what is right in one case is not necessarily right for what will become the National Lottery Act 2006.

Instead of focusing on what is not in this Bill, I think we should look at the bigger picture. The Government are of course already obliged to comply with Cabinet Office guidance on consultations, and with the requirements of the compact. I explained this point in great detail in Committee. We have shown our good faith in consulting recently on the interim order and directions for the New Opportunities Fund. Indeed, we made a change directly as a result of the helpful comments we received from the National Council for Voluntary Organisations.

The Big Lottery Fund itself is consulting closely with voluntary sector and other stakeholders on, among other things, the 60 to 70 per cent. undertaking, additionality reporting proposals, and general programme development. The Government will continue to consult widely, not because a statutory requirement says that we must, but because we think that that is a good way of doing business. That is the real safeguard, and I therefore hope that amendment No. 5 will not be pressed to a vote.

Finally we come to amendment No. 11, which would provide that the Big Lottery Fund must "take account of" rather than "comply with" directions given to it by the Secretary of State under new section 36E, inserted by clause 14 of the Bill. As I explained in Committee, all Lottery distributors are required to comply with directions about financial and operational matters; the points set out in new section 36E(3). I can see no good reason why the Big Lottery Fund should be treated any differently.

Financial directions are designed to protect public money and incorporate controls similar to those applying to all non-departmental public bodies through their financial memorandums. The requirements in section 26 of the 1993 Act are exactly the same as those placed on the Big Lottery Fund by proposed new section 36E(3).

Concern is perhaps centred more on the power in proposed new section 36E(2) to issue policy directions. The powers have been drafted as they have in order to bring together the different regimes of control that existed over the Big Lottery Fund's predecessor bodies in a coherent way. A child can be expected to demonstrate the characteristics of both its parents, not just one. The Big Lottery Fund will therefore have characteristics, both in terms of control and framework, of both the Community Fund, which makes up one third of the money, and the New Opportunities Fund, which makes up two thirds of the money.

I should perhaps comment on proposed new section 36E(2)(a), which I know is a source of concern, albeit misplaced. The provision allows the Secretary of State to specify persons to whom the Big Lottery Fund may or may not make grants. I can give the House a categorical assurance that the purpose of the provision is not to intervene in individual grants or to choose between voluntary organisations. Its purpose is to enable Ministers to specify particular outcomes and priorities for the Big Lottery Fund related to specific groups of people, such as young people, as we have done in the interim and illustrative directions. We have given repeated commitments that we will adopt a light touch on the direction of the Big Lottery Fund.

We have put our money where our mouth is on the issue of new interim policy directions for the New Opportunities Fund and Community Fund. We have also made available illustrative directions, using the powers set out in the Bill. Both the interim and illustrative directions are very different from the type of directions issued in the past to the New Opportunities Fund. They neither prescribe how the funding outcomes agreed with Government should be delivered nor preclude the funding of other worthwhile priorities. They will allow the fund full scope to make decisions on programmes, choose delivery mechanisms, identify partners and select projects.

I cannot, of course, guarantee that if one of the Opposition parties were in power it would not seek to exercise the powers in a different way. This Government, however, have shown by their words and actions that we intend to direct the Big Lottery Fund with a very light touch. I therefore hope that my comments will reassure hon. Members, and that the amendment will be withdrawn.

Photo of Mark Field Mark Field Shadow Minister (Culture, Media and Sport) 4:30 pm, 19th January 2006

I am afraid that that is wishful thinking on the part of the Minister.

First, I want to thank Jo Swinson for her kind words of welcome. Clearly, I am far too gallant to continue the conversation that I had with the Minister about ages. Suffice it to say, however, that the hon. Member for East Dunbartonshire is the youngest Member of the House, and the only one to have been born in the 1980s. At some point in the future, a Member who was born in the 1980s will be seen as an old Member; perhaps she will be in that position in several decades' time.

In relation to the amendments, I must confess that I am not terribly satisfied by the Minister's responses. He made a robust case—as robust as he was in Committee—but we remain concerned about the excessive prescription and emphasis on compliance. Subject to your guidance, Mr. Deputy Speaker, we want to press amendments Nos. 2 and 11, about which we feel strongly, to the vote. We will not press the other amendments in the group to the vote.

Question put, That the amendment be made:—

The House divided: Ayes 174, Noes 262.

Division number 130

See full list of votes (From The Public Whip)

Question accordingly negatived.