My Lords, in moving Amendment No. 1, I shall speak also to Amendments Nos. 3 and 14. The main aim of these amendments is to ensure that the Big Lottery Fund is officially established on the same footing as the other distributing bodies with the same amount of prescription by the Secretary of State. Amendment No. 1 removes the description of Big Lottery Fund expenditure as "prescribed". Amendment No. 3 takes out Clause 7(3), which describes what prescribed expenditure is. That subsection states that,
"'prescribed expenditure' means expenditure of a description prescribed by order of the Secretary of State", which means that the whole of the 50 per cent of lottery distribution going to the Big Lottery Fund should be prescribed by the Secretary of State. That subsection also allows for the prescription of devolved expenditure. Amendment No. 14 attempts to establish the Big Lottery Fund on the same footing as other distributors.
We debated these issues in Committee and at Second Reading. As your Lordships will remember, the original lottery distributing bodies were set up to comply with directions on matters to be taken account of when distributing lottery funds. The funds had to comply with directions relating to their management in terms of accounting, the delegation of powers, and so on. That was also how the Community Fund was set up by the Government when they changed from four original good causes, and how the Millennium Fund, which has come to an end, was set up. But when the New Opportunities Fund was set up by the Government, there was greatly increased prescription. The New Opportunities Fund had to comply with directions from the Secretary of State on all matters including the distribution of grants. We always felt that it was entirely reasonable that the Secretary of State could tell distributing bodies what to consider when awarding grants, and intervene directly to correct mismanagement or unacceptable accounting practices. That was part of the original Act when it went through this House creating the National Lottery.
The Government gave themselves a lot more powers over the New Opportunities Fund, however. The Minister has said on a number of occasions that they are backstop powers that will not be used, but when we make other suggestions, he says that there must be entire flexibility in these matters. Unfortunately, the Government cannot have it all ways on the Bill at the same time. The logic of their arguments does not stand up to scrutiny. It worries us because we know that when they originally looked at introducing the Bill, the Government planned to create one distributing body—a vast Big Lottery Fund, which would distribute all the lottery money. Luckily, that plan has been shelved, but it may have been shelved only for the moment—who knows?
The Government have, as we have heard before, broken their own rules on additionality. Indeed, almost everyone involved in the lottery has admitted that that has happened—the only people who have not admitted it are the Government, but it is clear that it has happened. We know that from a recent reply to a Written Question from my noble friend Lord Howe about how money was awarded for projects affecting the health service. Until quite recently, the DCMS website used to highlight the fact that the Government were investing £2 billion of public and National Lottery money in sport by 2006. That has now been changed. It now says that £3 billion is being invested in sport by 2006, coming from both the Government and the National Lottery. That is an improvement.
The Government have given themselves much greater powers over the distributing body. They cannot argue that they need those powers over one distributing body rather than over the other two. The argument that they need it because it is bigger is not good enough. We ought to be talking in this Bill about principles. The principle should be that National Lottery expenditure should be additional. The Government should not be involved. We all know that there are problems when the Government are not involved—that there are National Lottery projects that are turned down that we would individually like to support, and that some go through that we find somewhat objectionable. That is the nature of the system and we have to accept that that will always happen. At the same time, some projects are more successful than others. However, if we are to create an independent body which is independent of government, we will have to accept those aspects as being part and parcel of the process.
I am afraid that the Government do not have a good record. They have interfered. They have encouraged the use of National Lottery money in ways that are clearly not additional. We find that there is no good excuse for the Government giving themselves these powers, which are over and above what was ever considered when the original National Lottery was established. They are powers that are greater than for the other distributing bodies. They are not necessary and it is not good enough for the Government to say that they are a backstop and a reserve. If the Government really felt that 50 per cent of the lottery funds in this country were being misspent, they ought to come back to Parliament with a new lottery Bill. That is why my amendments are necessary. I beg to move.
My Lords, we on these Benches agree with the noble Viscount, Lord Astor, that the Bill in its current form constitutes an unacceptable level of government control over funding from the Big Lottery. In Committee, the Minister talked of broad categories, high-level themes and a broad strategy, not detailed prescription. His final throw was a framework for the devolved administrations. However, we are actually talking not about the Government's intentions in the Bill but about the Government's powers in it and the possible exercise of those powers. That is the right way to look at the Bill.
The concordance makes it absolutely clear that these are additional powers to prescribe in greater detail within the broad categories set out in Clause 22 as it would be amended. That is the big problem. Why does moving from some 33.3 per cent of the lottery proceeds to 50 per cent justify these increased powers? Nowhere, certainly not in Committee, has the Minister justified why that should be the case, so he has not explained the position properly. He has talked about the need for such powers of prescription in view of the money involved and so on. But in the previous 1993 Act, as amended, those powers do not exist for the New Opportunities Fund.
I recognise that the noble Baroness, Lady Pitkeathley, who I am sorry is not in her place today, said that a light touch was in practice exercised by the Government. I do not believe that that is necessarily relevant in this case. Governments then did not have the powers they are giving to themselves in the Bill. That is essentially the concern of the voluntary sector, which is so well reflected in the amendment put before the House today.
My Lords, I am grateful to both noble Lords who have contributed to the debate, although I must say that I have not heard arguments today which are very different from those presented in Committee. Therefore, I am sure noble Lords will not be surprised that my response is very much along the lines of the response I made in Committee, if only for the purpose of consistency.
Amendments Nos. 1 and 3, as the noble Viscount, Lord Astor, pointed out, seek to remove the Secretary of State's power to prescribe expenditure regarding the new Big Lottery Fund good cause; and Amendment No. 14, which I am pleased to see included in the group, would provide that the Big Lottery Fund must take into account rather than comply with any direction given to it by the Secretary of State.
It was not just in Committee that these issues were discussed; there was intensive discussion in the other place. I recognise the strength of feeling on the other side of the House on these matters, but we also feel strongly that the concerns that have been expressed are unfounded. We have had a considerable time to consider these arguments since they were first voiced in the other place some time ago.
Noble Lords are speculating on the powers in Clauses 7 and 14 and how they will be used. We think that we have taken out the issue of speculation because we have published an illustrative draft order and directions. We sent these out to all noble Lords interested in the Bill and of course placed them in the Library. It is open to noble Lords to be suspicious about the Government's intentions, but suspicion is usually based on the fact that information is being withheld. I do not think that the Government could have been more open than they have been about how they intend to interpret this Bill if it becomes an Act in terms of the order and directions which we will employ.
Every commitment that we have given, even those where the commitments are firmly on the record in this House or another place, are largely being disregarded. Therefore, I do not think it is for me to make a very long speech today against these amendments. Without the power to prescribe expenditure, the Big Lottery Fund would be given 50 per cent of all the lottery good-cause money to spend on anything that is charitable or connected with health, education or the environment without any further recourse to Parliament. I understand that the noble Lord, Lord Clement-Jones, views this with complete equanimity. The Government disagree with him. We do not think that it makes sense.
The large new spending area of health, education and the environment, which we created in 1998, has of course proved popular and successful. It has enabled thousands of worthwhile projects to be funded, including ones which have benefited more than 30,000 World War II veterans, war widows and carers. It has helped to provide more than 2,100 village halls and community buildings. The new Big Lottery Fund good-cause funding brings these areas and the charitable expenditure distributed by the Community Fund together, allowing an enormous range of projects to be encompassed. This is a good thing, and it is one of the main reasons why we wanted to bring the Community Fund and the New Opportunities Fund together. But it creates a very different kind of good cause from the existing arts, sport and heritage good causes. Arts, sport and heritage are much narrower areas, and the existing legislation narrows things further by prescribing sums to be distributed by different distributors. As I said in Committee, this not only limits who can spend the money, but restricts what the money can be spent on. For example, prescribing the percentage to be distributed by the UK Film Council in effect prescribes the percentage of money for the arts good cause that must be spent on film.
In 1993, Parliament took the view that such arrangements were necessary to ensure the effective distribution of lottery money. That degree of prescription has obtained in the lottery since its inauguration. The powers we are proposing in the Bill have a similar effect, and we believe that they are just as necessary now as they were in 1993. We need to be able to set out at the highest level the types of expenditure that the Big Lottery Fund should focus on. I emphasise that we are obviously talking about broad areas of expenditure. We are not talking about programmes or projects, or about the split between the four parts of the good-cause funding or between the four countries of the United Kingdom, and we are certainly not talking about specific grants. We have made an illustrative order demonstrating how the power to prescribe expenditure will be used in practice.
We could not be clearer about our intentions, and I fail to see what more we could do to assure noble Lords on the opposition Benches. Yet, to my knowledge, no one has found anything concrete to object to. I take that as evidence that the concerns we have heard so much about do not have much basis in fact. It was suggested in Committee that the Bill would give the Government more power over the Big Lottery Fund than was afforded over the New Opportunities Fund in the 1998 Act. I contend that that is simply not so. The 1998 Act limited the New Opportunities Fund's spending to initiatives specified by order by the Secretary of State. Those initiatives tended to be much more narrowly focused than the broad themes we are proposing for the Big Lottery Fund.
I am in no way saying that the approach towards the New Opportunities Fund was wrong. Indeed, it was very successful. It provided a strategic focus for lottery funding, and had a much more prescriptive approach than the one we are proposing in the Bill for the Big Lottery Fund. The noble Lord, Lord Clement-Jones, mentioned that my noble friend Lady Pitkeathley was not here; I regret that too. I am glad that she is present. She has considerable experience of these issues, and she made it quite clear in Committee that the New Opportunities Fund experienced no government interference in specific expenditure. I should also make it clear that the ability to prescribe devolved expenditure is central to devolving more decision-making to Scotland, Wales and Northern Ireland, which is the aim of the Bill. I am afraid that Amendments Nos. 1 and 3 would mean that the devolution arrangements in the Bill would not work. They would retain power for the Secretary of State just where the Government intend to devolve it. That seems somewhat ironic, given the Opposition's perceptions, which we have all heard, of the Secretary of State's excessive control. We cannot accept Amendments Nos. 1 and 3, and I ask noble Lords to consider not pressing them to a vote.
Amendment No. 14 would require the Big Lottery Fund to take into account, rather than comply with, any direction given to it by the Secretary of State. All lottery distributors are required to comply with directions about financial and operational matters, which are set out in new Section 36E(3). Such financial directions incorporate financial controls designed to protect public money by ensuring that distributors comply with basic financial and operational good practice. The requirements placed on the Big Lottery Fund by new Section 36E(3) are exactly the same as those placed on other distributors in Section 26 of the original 1993 Act, which set up the lottery. We do not see any reason for change.
Section 36E(2) sets out the powers to issue policy directions. I emphasise that the powers have been drafted in the way that they have in order to bring together the different regimes of control that existed over the Big Lottery Fund's prior bodies, and to bring them together in a coherent way. Both the Community Fund and the New Opportunities Fund had to comply with policy directions. The Community Fund, like other lottery distributors, was required to comply with any directions given to it by the Secretary of State as to the matters to be taken into account and to determine the persons to whom, the purposes for which, and the conditions subject to which it distributed the money.
The key difference between that requirement and those set out in the present Bill is in the matters to be taken into account. A statutory requirement to comply with directions as to the matters to be taken into account is a real legal obligation. The Community Fund could not pick and choose which direction it complied with; it had to take all the policy directions into account and could decide to ignore them only under exceptional circumstances.
This debate has therefore become overly focused on a narrow point, when the real issue is how the powers of directions will be exercised. We have given repeated commitments that we will adopt a light touch on direction of the Big Lottery Fund—we said so in stages of the Bill in the other place, I said so in Committee in your Lordships' House, and I reiterate the point today. We demonstrated our integrity with the issue of new interim policy directions for the New Opportunities Fund and the Community Fund. These directions are, as far as possible under the existing legislation, the same as those we will issue in due course to the Big Lottery Fund, and our intention is set out clearly in the illustrative directions that we have made available to the House and which we propose to introduce after Royal Assent.
Both the interim and illustrative directions are very different from the type of directions issued in the past to the New Opportunities Fund, although those were also applied with sensitivity and consideration. They provide the means by which the funding outcomes and priorities agreed with the Government and supported in the Big Lottery Fund's consultation will be delivered. But they do not—and I emphasise this point again—prescribe how they should be delivered, or preclude other worthwhile priorities being funded. They will allow the fund full scope to make decisions on programmes, choose delivery mechanisms, identify partners and select projects informed by intensive public consultation.
In conclusion, I hope we can focus on the real issue and put this matter to bed now once and for all. I hope that noble Lords will recognise that we are not being overly prescriptive; we are making it quite clear how these powers will be exercised and I hope that with that level of reassurance the noble Viscount, Lord Astor, will feel able to withdraw his amendment.
My Lords, the noble Lord, Lord Davies, said that he was not being overprescriptive. In that case, he will not have much of a problem in accepting my amendment. But, of course, that will not be the case. He said that there would be no new arguments from the Government: I think that the noble Lord, Lord Clement-Jones, and I can agree that we did not hear any new arguments.
During the passage of this Bill, we on this side of the House have been grateful to the Minister for providing draft directions and draft orders. It has been enormously helpful for us to understand the Government's thinking. If we could have more of them, more Bills would have a smoother transition through your Lordships' House. However, I am still trying to get myself around the interpretation of a "transformational grant", as outlined in the directions, but I am sure that I will finally understand it.
The Minister's defence against my amendment is simple: namely, that the Secretary of State's powers will set out at the highest level how expenditure will be made by the distributing bodies. The answer is that Clause 7 already does that. It sets out expenditure at the highest level. My amendment does not change that. It would delete "prescribed". It leaves in,
"charitable, or (ii) connected with health, or (iii) connected with education, or (iv) connected with the environment".
The Minister said that this would not allow the Secretary of State to prescribe expenditure as it related to the devolved assemblies—Scotland and Wales. The argument works both ways. Perhaps we should have an amendment to say how the Big Lottery Fund should hand out the money to devolved areas. Under this amendment, the Secretary of State would be allowed to say to Scotland, Wales, Northern Ireland or wherever, "Well, I am very sorry. You have had too much. We will not give you so much this year". I do not think that the Minister's argument can work for and against him. It works equally both ways. I am sure that the noble Lord, Lord Clement-Jones, and I will discuss the issue before Third Reading.
Whatever the arguments, the Minister cannot claim with any validity that this Bill does not give the Government greater powers. It is a matter on which we disagree. I must ask the opinion of the House.
My Lords, this amendment concerns the possibility of a fund to support national acquisitions. Your Lordships will remember that in Committee I moved an unsuccessful amendment to return the lottery to supporting the original four good causes, which would have increased the amount of money going to the National Heritage Memorial Lottery Fund to 25 per cent. I also moved an amendment which would have enabled a fund to be set up for national acquisitions. That is a problem that the Government occasionally make noises about but have failed to come up with any form of policy on. This is my attempt to tease out of them some form of commitment that they will do something either now or in the future.
The problem is that over time the government grant to the National Heritage Memorial Fund—not the lottery part of it, but the memorial fund—has declined from its highest level of £20 million to £5 million a year. That is the fund that enables the National Gallery, or institutions like that, to get a grant to fund or part-fund when objects may go abroad which the Export Reviewing Committee, which was set up by the Government, has recommended should stay in this country. That happens more and more. Just last week the Culture Minister, Mr Lammy, placed a two-month export ban on a large silver plateau marking a British victory in the Anglo-American war of 1812. The ban provides the last chance to raise £696,000 required to save that important antique. However, two months is a very short time to save that object or, indeed, any object. There is a problem.
The lottery part of the National Heritage Memorial Lottery Fund is not able easily to fund acquisitions. It has already been criticised by the Government for having too much unspent capital. The Government say that lottery distributors should cut unspent funds. In many cases that is a good thing, but if you are trying to build up a reserve or an emergency fund, it is not terribly helpful.
My proposal is simple: to allow money to be allocated from the Big Lottery Fund—which, after all, is now taking the majority, the 50 per cent—for the purposes of national acquisitions, as defined by the rules of the National Heritage Memorial Fund. The matter would be managed by the National Heritage Memorial Fund, so there would be no question of involving the Big Lottery Fund on a project-by-project basis in deciding who should get a grant. Under the rules of the National Heritage Memorial Fund it is clear that the measure would be applied only for objects of outstanding national importance, as defined by the Reviewing Committee on the Export of Works of Art, which is a government committee. My amendment seeks to set up a fund that is, in effect, ring-fenced for that purpose. Under the amendment, balances could be built up to enable the fund to be prepared to make acquisitions as we all know that certain collections in this country will be in danger in the future. The Treasury accepts works of art in lieu of taxes, but that measure is also cash-limited. Should a large number of objects come on to the market in any one year, either due to owners' deaths or owners who wish to sell, the low ceiling of the Treasury's measure would be gone through very quickly.
I hope that the Government will be sympathetic to the amendment in principle and will tell us how they seek to solve the problem. I accept that my amendment might not be the right way to do so or that it might not be well drafted. However, I hope that the Government will address the principles of the concerns that I have outlined. I beg to move.
My Lords, the noble Viscount, Lord Astor, has spoken rather modestly. We on the Liberal Democrat Benches fully agree with what he is trying to do. At present the funding of acquisitions seems to be a low, if not marginal, priority of the Government. Collections must not, and cannot, remain static. Back at the turn of the previous century, I believe that John Maynard Keynes, who then worked at the Treasury, recognised that it would be useful if money was allocated to buy paintings from the Degas sale that was taking place. Those paintings have formed an incredibly useful and essential part of the National Gallery's collection. At present it is difficult for bodies to find the money to buy the paintings and so on that they need to build up their collections. Therefore, I fully support the amendment proposed by the noble Viscount, Lord Astor.
My Lords, on that last point I shall not dispute with the noble Baroness that there are extremely worthwhile possibilities in terms of the effects of the resources that are available for ensuring that we increase our very extensive art collections in this country. But the issue is not whether there are desirable forms on which expenditure should be made, but whether this is the right way to go about it. We had an interesting discussion in Committee on the desirability of making grants to purchase and conserve items for our national collection, and to preserve historic buildings. It is not the burden of the case that the Government disregard such important priorities; that is why the heritage fund is there. We recognise the importance of those elements in the cultural life of the nation, and I pay tribute to the way in which challenges have been responded to in that area.
The Heritage Lottery Fund has made 451 awards for the acquisition of works of art and cultural objects by museums and galleries to a total value of £135 million, and the overall success rate has been 86 per cent. It has awarded more than £1 billion to the conservation of 9,500 historic buildings. The range of what has been supported is a checklist of a great deal of what is of value and interest to the cultural heritage of this country, ranging from Raphael's "Madonna of the Pinks" to the "Flying Scotsman" locomotive.
Those are some of the big items, of course—and very costly. But there have been many smaller ones, benefiting visitors to regional and local museums and galleries. It bears repeating for those who still feel that a new initiative, or a special fund, is required, that the Heritage Lottery Fund has given more than £590 million, which includes conservation of cultural objects of national importance, such as 42 historic steam, diesel and electric locomotives and 58 ships and boats. We also need to bear in mind that even this wealth of grants from the lottery is not the whole picture. Grants made by the National Heritage Memorial Fund, which is supervised by the same trustees but funded by the taxpayer, have also contributed strongly in this field. Most of the £220 million that that fund has provided in the past 26 years has gone in that direction, saving 1,200 iconic objects and places for the nation, including Tyntesfield House. Its annual budget will soon rise from £5 million to £10 million, which we all welcome.
I recognise that the amendment is different from that tabled by the noble Viscount, Lord Astor, in Committee. He is to be applauded for his ingenuity and persistence on what we recognise as a good cause in terms of desirable expenditure. The amendment does not fix a percentage of funds. Indeed, it attempts not to take money from the Heritage Lottery Fund at all. It is still unnecessary, given the track record of grant giving that I have just described. The amendment is not only unnecessary; I am afraid that I still find the concept objectionable. It brings the Big Lottery Fund into the equation, and tries to change the overall remit of the BLF to extend it to cover the heritage fund.
The remit that we propose for the Big Lottery Fund is essentially about grants for community groups. More specifically, it is about health, education, the environment and charities. Of course there is bound to be overlap in, say, education and the environment, but it makes no sense at all to try to duplicate complete responsibility for supporting our heritage between two lottery distributors instead of one. If the aim of the amendment is to take money from charities, health and education to boost the money for acquiring works of art, the appropriate way to do that would be to propose a change in the percentage shares each cause will receive. We do not think that there is any need to change the shares.
The Heritage Lottery Fund is already well able to assess competing needs and the opportunities out there to which they can respond; they are doing an excellent job. It may help your Lordships to know that the Heritage Lottery Fund recently brought together a preliminary meeting of the museums sector to discuss the existing mechanisms for providing financial support for acquisitions and whether additional support is needed. Another meeting is planned for June, and I understand that there is every likelihood that further improvements can be made to what are already good arrangements in the national heritage fund.
What this amendment seeks to achieve does not help the situation at all. It would blur the lines, by creating difficulties in accountability, and it would require judgments outside the expertise of the national heritage fund, when it is surely better to recognise the excellent job done there and ensure that it has the resources to do that job. I am as one with the noble Viscount, Lord Astor, and the noble Baroness, Lady Bonham-Carter, in emphasising the desirability of expenditure on our national heritage. That is what the heritage fund is there for. Trying to create an acquisitions fund through the back door, by tackling the Big Lottery, is not the way to do it. I therefore ask the noble Lord to withdraw his amendment.
My Lords, the Minister said that this would require judgments to be made outside the Heritage Lottery Fund. If the Minister looks at my amendment with care, he will see that is not the case. It enables the Big Lottery Fund to fund an acquisitions fund, and I clearly said in moving the amendment that all decisions on individual applications would of course remain with the Heritage Lottery Fund and not involve the Big Lottery Fund. I am sorry that the Minister did not take that into account in seeking to address my concerns.
I can see that I will not make much progress with this amendment, which is a pity because with one hand the Government are encouraging distributing bodies to wind down their balances, meaning—particularly when it comes to the National Heritage Memorial Fund, with its many long-term commitments—that they sometimes do not have money available to make quite large and rapid grants. As I have explained, there is often only an eight-week opportunity to buy something; it is then quite difficult to get through the application process. The Government are on the whole not addressing this problem, which is disappointing. At some point the Government will be forced to do so, when a major national collection runs the risk of going abroad and they will not have done enough to safeguard those interests. They will have to address the issue in the future.
I am sorry that the Minister has been unable to be more forthcoming in his answers. I beg leave to withdraw the amendment.
My Lords, this simple amendment prevents money in outstanding balances being used by being moved from one distributor to another. As the Minister said, this is a reserved power, only to be deployed in extreme situations. The Government always want these powers just in case, but we believe that if that happened the whole distributing mechanism of the lottery would be in such chaos that the Government would have to come back to Parliament, and it is right that they should do so rather than give themselves this power.
A secondary concern—the Minister may be able to help the House on this—is that the Government set up funding for the Olympics from the distribution fund and we are always concerned that they will get their sums wrong or there will be overspending on the Olympics, which would be a way of the Secretary of State topping up the Olympic lottery fund. It would be helpful if the Minister could say that there is no chance of that happening by a redistribution of balances. I beg to move.
My Lords, in Committee, we had a debate closely related to this one. I said then that I thought the amendments reflect unwarranted concern about the Government's intention in respect of the proposed reserved power to reallocate an excessive National Lottery Distribution Fund balance from one lottery distributing body to another body. Amendment No. 4 would sabotage the concept behind the issue that we are tackling on balances. I emphasise again the assurance that I gave in Committee, which had been given repeatedly by ministerial colleagues in another place: the power will be used only as a last resort against the distributor which stubbornly and persistently failed to manage its balance to a reasonable level.
In Committee, both the National Audit Office and the Public Accounts Committee of another place have concluded that the public benefit of lottery money is fully delivered only when that money is spent on projects in the community. There is no value to the community in large balances. Distributors have already made great progress in reducing balances. The overall balance has fallen from a peak of more than £3.7 billion to less than £2.2 billion now. Distributors which manage and set clear targets for balances, as all the main ones are now doing, will have nothing to fear from this power. The existence of the power will represent a discipline to ensure that this progress continues and will provide an added safeguard against a return to the days of very high balances which, as I maintain, are of no value to the community.
We need a reserved power in case any distributor should, in future, build up an excessive balance and fail to tackle it. Noble Lords have expressed concern that were the Government to propose using the reallocation power to transfer a balance from, say, the Heritage Lottery Fund, there would be no other body suitable to accept the transfer. I remind the House that when the Government first introduced the National Lottery Bill in another place in the autumn of 2004, it included a reallocation power that would have enabled an excessive NLDF balance to be transferred not just from one distributor to another but from one good cause to another. Such a power would have enabled funds to be transferred, for example, from the heritage good cause to sport and the arts. It is because the Government were prepared to listen to the concerns expressed assiduously at that time by, among others, the heritage lobby, that Clause 8 of the Bill proposes a reallocation power that could be used to make transfers only within individual good causes. I hope that gives some reassurance to the noble Viscount, Lord Astor, as he was eyeing the power as a possibility for coping with the Olympic Games costs. I can assure the House again, as I have done within the framework of other debates, that of course the Government have fully costed the Olympic Games and are making provision to ensure that those costs are met through well identified routes. It is certainly not the intention that this power is used in those terms.
For some good causes, including heritage, there is only one distributing body. That does not provide a good reason to exclude these good causes from the reallocation power entirely. In the unlikely event that the sole distributing body for a good cause allowed an excessive balance to build up in the future, and that body failed to tackle it, the existence of the reallocation power would be justified.
The proposed reallocation power provides a better solution than any that have otherwise been proposed, and better certainly than the powers in the 1993 Act, which could reduce a body's long-term income stream as well as its balance. In our view, we have a better approach than existed in the previous legislation.
The whole point of using the power would be to find another body to accept such a transfer and to use the funds more quickly than the transferring body, without sacrificing public value from the expenditure. If such a recipient body could not be found, the Government would not propose using the power.
I want to emphasise those points and also to contend against the argument of the noble Viscount, Lord Astor, on Amendment No. 6, which would build in a specific requirement for the Secretary of State to consider the effects on a distributor's longer term commitments before exercising the reallocation power. We had this debate in Committee and I gave assurances that the Government would not use the proposed reallocation power in a way that would threaten any existing commitment.
The burden of the noble Viscount's contention was that because the National Heritage Fund has existing long-term commitments, for reasons that we all fully understand, it needs that reassurance—as does the noble Viscount, Lord Astor. I repeat that assurance now. The Government fully recognise the great public benefit derived for many long-term lottery projects in the past.
I also pointed out the difficulty of interpretation that the amendment would create—about what would constitute a threat to a distributor's long-term commitments. The Government would not, for example, accept that in every case a distributor needs to hold funds in its balance now to meet a commitment that is likely to fall due for payment in five years' time. However, in the unlikely event that we ever propose using the reallocation power, the Government would take into account the distributor's existing NLDF balance, its likely future income from the lottery and all its forward commitments.
I would like to reassure the noble Viscount on forward commitments. In other words, the Government would look at a distributor's in-principle commitments as well as its contractually binding, hard commitments. Depending on the interpretation of "commitment" in the amendment before us, it might have the effect of compelling the Government to take fewer factors into account if they ever proposed to use the reallocation power. I am sure that the noble Viscount, Lord Astor, would not want that result, which, I believe, would be the opposite of what he is seeking to achieve.
I will repeat, because of its pertinence, what I said in Committee about the National Audit Office report on NLDF balance management, published in July 2004. The National Audit Office suggested that distributors should increase their forward commitments as the most effective means of reducing their balances in the long term. The Government are hardly likely to propose using the reallocation power against a distributor that had followed exactly that advice by making longer term commitments.
I rest the Government's case on this matter. We only regard this as a reserve power, against a background that we want to emphasise clearly: balances are necessary to meet longer term commitments—that goes without saying—but balances as such are of no value to the community. It is right that we should have this reserve power where a balance might be excessive.
I hope that the noble Viscount will think those arguments strong enough to withdraw the amendment.
My Lords, I am encouraged to bring back this simple amendment because of its sympathetic reception in Committee. It is simply a matter of incorporating into the Bill what is agreed by all to be good practice, in order that those most affected by any transfer of funding will know for certain that the consultation will take place. The need for such consultation, outlined by the right reverend Prelate the Bishop of Southwell and Nottingham, is well known from the records of earlier proceedings, as is the Minister's response. However, I am emboldened to press the matter for one good biblical reason.
Joseph, he of the technicolour dreamcoat, was extremely well treated by Pharaoh when in Egypt, as was his family—until, so we are told, a Pharaoh came along who "knew not Joseph". Then it all went wrong. The children of Israel ended up in slavery, and Pharaoh did not do very well either.
While assurances may be enough for now, who knows when a Minister may come along who knows not the right reverend Prelate the Bishop of Southwell and Nottingham and his like? It is better to be safe than sorry. I beg to move.
My Lords, I thought the right reverend Prelate the Bishop of Southwell and Nottingham was pretty persuasive last time. The right reverend Prelate the Bishop of Sheffield has been even more persuasive this time. Indeed, I recall encouraging the right reverend Prelate the Bishop of Southwell and Nottingham to come back with the amendment. It seemed that it was perfectly analogous to the previous clause. There was no reason why these words should not be in this clause, as they are in Clause 7. Putting them in the Bill would make it more consistent, and would prevent a future Pharaohnic Minister from arising and not knowing the Church of England, or any other body that might wish to be consulted in these circumstances. The amendment is well worth supporting. One of my reasons for encouraging it to be brought back—when I tabled my own, rather weaker, amendment—was that the Minister had no answer to it except that it will happen. I am doubtful as to whether that is an adequate ministerial reply.
My Lords, in the face of such an excellent team of right reverend Prelates here this afternoon, I hesitate to say that I was not as persuaded as the noble Lord, Lord Clement-Jones. The amendment is to add the phrase, "such other persons as he"—the Secretary of State—"thinks appropriate", to the list of people whom he shall consult on the reallocation of funds. If this had been expressed in objective terms, I might have seen that it had a point. Given that the amendment is expressed as simply adding that phrase, and that—I think I am right in saying—the Secretary of State, under this clause and any other such powers, is always entitled to consult whom he thinks fit, what does this add to the normal procedure? On the argument of the right reverend Prelate and the noble Lord, Lord Clement-Jones, it would mean that we have to add that rather pointless subsection to every Bill.
My Lords, I thank the noble Lord for giving way. Does he recall that a similar amendment was made to the Olympics Bill on consultation? The precise words—except for "if any"—are contained in new subsection (3C)(e) in Clause 7(3). Does the noble Lord agree that Clause 8 would be much more consistent with Clause 7 if these words were added?
My Lords, the Minister will wonder whether he has had any support from his Benches or whether he has been thoroughly torpedoed below the waterline—which I suspect is the case.
The noble Lord, Lord Clement-Jones, is right. If it worked to have it in Clause 7 at new subsection (3C)(e) where the only difference is the words "if any"—it is unlikely that a Secretary of State could not find anybody to consult but it is theoretically possible—then it is even more appropriate that it should be in Clause 8. As the noble Lord said, we must have consistency in legislation. I fully support the amendment tabled by the right reverend Prelate.
My Lords, I will stick to the main theme first and move to that subsidiary one later.
I owe the right reverend Prelate the Bishop of Sheffield a response to his amendment. He will recognise that at our preceding stage his colleague the right reverend Prelate the Bishop of Southwell and Nottingham had pointed out that were the Government ever to seek to use the proposed allocation power, there might be other interested parties apart from the distributing body from which the funds were being transferred, the body or bodies intending to receive the transfer and the administrations in Scotland, Wales and Northern Ireland.
We accepted that there might be a wider range of interests. For example, Ministers for arts, sports and heritage would have a legitimate interest in the proposed use of reallocation power in their sectors. As I said in Committee, the wider sectors would have ample opportunity to make representation without this amendment. It is intended that any use of the proposed reallocation power would be subject to affirmative resolution, meaning that these matters would have to be debated subject to approval both in your Lordships' House and in another place. The proposed use of the power would be fully within the public domain well before it could be implemented and consequently it would be possible for all to comment upon it. I hear what my noble friend Lord Borrie says when he regards this as otiose because the Secretary of State has powers to consult but it is at times important that we identify specific interests that need to be taken into account.
I am indicating that specific interests are taken into account as well as the mechanism by which effect is given to these proposals. They are subject to parliamentary debate and approval. That should allay anxieties. It particularly allays the anxiety that any Secretary of State might have Pharaoh-like powers. Secretaries of State change over time, as we have noticed, and it may be that they do not have all have excellent memories or that they are not briefed on what their predecessors said. But there is a world of difference between Pharaoh's Egypt, where arbitrary decisions could be taken by the powers that be, and a parliamentary democracy where we have built into the legislation the understanding that there must be public debate about this issue before the power can be used. I am not sure that Pharaoh could have tackled Joseph on the basis of these procedures.
My Lords, we are talking about a slightly different area of power. We have the power in the Bill as a consequence of the way action is taken subsequent to the decision being taken. I take on board the noble Viscount's point. If he proves to be right—and I think he would give due acknowledgment to my noble friend Lord Borrie—and what he has identified is a quirk or idiosyncrasy that has crept into the Bill affecting its overall consistency, which happens from time to time, I shall address my mind to that and will table an appropriate amendment at Third Reading. At this stage, the noble Viscount should rest assured that we have taken his point on board and will look at it.
My Lords, this amendment concerns the redistribution of interest. When one tables an amendment in your Lordships' House, it is always interesting to see what happens and what lobbying one gets from outside. One is always quite surprised by what happens. The CCPR, which calls itself,
"One voice for sport and recreation", claims that should my amendment be accepted, it would be inadvertently penalised because it would mean that when the Secretary of State allocated interest that has been built up over a period of time, instead of allocating it in the same share as the distribution bodies get it, he would be able to change the allocation. It is saying that because it spends its money quicker and faster than anybody else, it ought to be able, if necessary, to have a larger share of the interest. I find that bizarre. It seems to me that the CCPR ought to be seeking its fair share of the interest, not a larger share.
We are not entirely clear why the Government need the power given by this clause to change where the interest goes. It is an issue that we discussed briefly in Committee. If my amendment is accepted, the reallocation would go to the existing bodies as they stand. I do not think this is an area where the Secretary of State needs to be involved. I beg to move.
My Lords, I am grateful to the noble Viscount for the terms in which he has moved the amendment. He will recognise that Clause 9 changes the way that 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 which hold high balances. Thus, potentially, communities were deprived of realising the benefits of lottery spending on the ground as fully and as soon as they might otherwise because of those high balances. The proposed changes will remedy that problem. They will mean that investment income on the NLDF balance will be shared out between distributors in the same fixed percentages as proceeds from the lottery operator, Camelot.
As I pointed out in Committee, the new arrangements brought about by Clause 9 are consistent with our overall policy that there should not be a build-up of large balances, but that lottery proceeds should be delivering benefits on the ground as quickly as possible. That was the conclusion of the Public Accounts Committee of the other place in its report last October. The committee made it quite clear that the public benefit of lottery money is delivered when the money is spent in the community. I also repeat what I said in Committee about the proposed new arrangements being fairer and more transparent for all distributors. Under the new arrangements, distributors will have greater clarity about their share of the potential future income from the lottery.
I recognise the concern that has been expressed about the impact on income to the heritage good cause. I recognise that it is possible to argue that there might be winners and losers in these arrangements. It is true that at present, the Heritage Lottery Fund holds a higher share of the overall NLDF balance than its share of operator-related proceeds to the fund. However, as the overall NLDF balance and distributors' individual balances continue to fall, the new arrangements that we have proposed here will have less and less effect over time.
The NLDF was never intended to be an investment fund built up of huge balances. Lottery money does good when it is spent in the community. It is unfair that good causes and distributors who spend lottery income more quickly—for example in the sports and arts sectors—should in effect be penalised by receiving a lower share of investment income because they have spent their income.
I recognise that a balance must be struck here—if I can use that term in this context. I understand the noble Viscount's anxieties. However, he will recognise that the concept behind Clause 9 is a worthy one. It is to ensure that money is spent most effectively. On the basis of that reassurance, I hope that the noble Viscount will feel able to withdraw his amendment.
My Lords, this means that the distributing body has a balance and the interest that is earned on that will be shared out. I suppose that one could regard that as a principle that the Government have operated in many instances in many worlds, such as pensions and savings. At least the Minister has been consistent. I see that I will not make progress on this and I beg leave to withdraw the amendment.
My Lords, in Committee, we had a fair degree of debate about the provisions of Clause 11, which has various purposes, but is essentially designed to ensure that the National Lottery distributors take a greater part in publicising aspects of the National Lottery. When the Minister described this in Committee, he said:
"We have made it clear many times that distributors will not be in the business of promoting the National Lottery games".
"Clause 11 will ensure that all lottery distributors can take part fully in the activities of the National Lottery Promotions Unit, which seeks to raise positive awareness of, and support for, the benefits of National Lottery good cause funding across the country".—[Hansard, 13/3/06; col. 1043.]
I do not think that anybody would disagree with that. It is only when you turn to the provisions of the Bill that any doubt arises. Paragraph (c) mentions,
"encouraging participation in activities relating to the National Lottery in general".
That is when doubts begin to creep in. Those words are very broad. It does not say "encouraging participation in projects funded by the National Lottery in general" or something more specific. It really does not reflect the Minister's assurance.
Paragraph (c) makes it looks as though the National Lottery distributors could encourage participation in the National Lottery itself. That is what voluntary organisations are concerned about. They do not believe that this wording is sufficiently concise or precise to set out what the Government's real intentions are. This amendment clearly is a blunt amendment. It would be very helpful if the Minister could indicate whether, as the Bill proceeds to Third Reading, the Government will come back with a more concise amendment to that particular paragraph. There really is a great deal of ambiguity about the provision and it does not reflect the assurances that the Minister gave in Committee. I beg to move.
My Lords, as the noble Lord, Lord Clement-Jones, indicated, we had an extensive debate on this in Committee, and I appreciate his concern that this paragraph could be interpreted as empowering lottery distributors with the opportunity to encourage people to gamble. That is not the intention behind the paragraph. The promotion of lottery games is the business of the lottery licence holder. The reason we have the paragraph is to make it clear without any doubt that lottery distributors have the power to encourage people to get involved in wider events that promote the lottery good causes and spending on them, such as National Lottery Day and the National Lottery awards.
The National Lottery Day is not designed to encourage participation in the lottery—although I recall on two occasions the noble Lord, Lord Clement-Jones, indicating that was how he conceived of it. It is not; it is designed as a way of making clear to the public the full range of the benefits of lottery good-cause funding. We know from our own research that the public believe that they should be much better informed about where National Lottery money has gone. There is a substantial task to be fulfilled in informing people about how they approach the lottery for causes which they would want to see possibly supported by it and they want reassurance that the very substantial sums involved are well spent.
The public are very pleased when they hear not only where the lottery money has been spent but also the reasons behind the expenditure. I think that is because too often they get only the bad news from the media. They get such news when an easy headline is made about an apparent misdirection of lottery expenditure. We may be treated to that later this afternoon. We had that—the noble Viscount, Lord Astor, will not mind me chiding him gently on this point—when we were talking about funding for international expenditure. The only interest that the media managed to produce across this very wide range of international expenditure was for a tiny amount—a few thousand pounds—which was spent on an unsuccessful attempt to establish a guinea pig culture in a series of Peruvian villages. A fractional amount was spent on that project, to say nothing of it being a tiny amount of the overall expenditure on international matters.
My Lords, the Minister is very kind, but he has tempted me to my feet and I am afraid that I cannot resist. I quite understand what he said, but perhaps he could deal with a point of principle that relates to what the noble Lord, Lord Clement-Jones, said. A grant of almost £30,000 was recently made to Manchester United, which has just been sold for, I think, almost £2 billion, to keep its staff fit. I am sure that that is a thoroughly laudable thing to do. When the Sport England spokesman was asked about it, he said:
"We cannot and should not discriminate against a firm based on whether it is perceived to be wealthy".
That rather confuses because, in light of what Ministers have been saying about who should receive lottery grants, surely distributing bodies should consider the assets of the institutions which are to receive the money before they simply hand it out.
My Lords, the noble Viscount will realise that I was waxing rather more happily about the problems of Peruvian guinea pigs than about expenditure on Manchester United. It is an illustration of bad news driving out good—an all-too-frequent experience, as we all know. Quite frankly, 3 per cent of the money which the regional sports board is spending in the north-west was directed to that project, so we are talking about some fairly minimal amounts. Sport England, not the Government, was responsible for that decision. I must say that the Opposition have used most of our debates at all stages of the Bill to tell the Government to stay out of these matters. It is a little ill for the Government to have to respond to a decision about Manchester United, which is always highly newsworthy.
The intention was of course that employees should benefit from the drive towards an improvement in the health and fitness of employees at work—objectives that I think we would all share. The problem is clearly whether lottery money should be spent on the employees of a company that should be able to provide for such an improvement in abundance. That is an entirely legitimate question, although it was not legitimately addressed to me for the reasons that I just gave. It has caused some reasonable concern, but I simply want to put it into context. Other employers, of course, are not as extraordinarily endowed as Manchester United. The project was to get employers involved in an area in which a very large number are shamefully neglectful.
The criteria required the employers to make a submission. It might have been said subsequently that the criteria should have included the kind of resources commanded by the employers, but in fact they covered the numbers of people involved, their participation in such programmes and what would be done with the money. Manchester United made a convincing case. Sport England has assured us—and we have looked into this as a consequence of this discussion—that all 41 awards were made according to the relative merits of the applications received, and that the prominence of the applicants had nothing to do with the decisions. The noble Viscount may be asking why the Government did not intervene in a matter of public concern, but I am sure he would recognise that that would not be our line.
My Lords, may I correct the Minister? I hope that he will not go away with the wrong impression. I would never get involved in any project or ask the Government to comment on any project. My question concerns the principle of Sport England saying that it should not take into account the relative wealth of those who were to receive the grants. It is a question of principle, really.
My Lords, I hear what the noble Viscount has said. I am merely emphasising that I am seeking to repudiate the main thrust of the amendment on the ground that informing the nation about the virtues of the lottery—where and how the money is spent and in order to have a public debate about the good causes—is important in improving the allocation mechanism. This current short debate on what I regard as a trivial point—although I recognise that the noble Lord has used an element of it to illustrate general principles—is part of the public debate on how the various distributors go about their task.
I would like to reassure the noble Lord, Lord Clement-Jones. He will recognise this point as he should also have received a copy of the correspondence—the noble Lord, Lord Phillips, wrote to me about these issues and I replied explaining matters as we saw them. He was satisfied with that reply and wrote to thank me for making clear to him the reasons for the paragraph. I had thought that perhaps that degree of approval might extend beyond the noble Lord, Lord Phillips, to all his colleagues in the Liberal Democrat Party. It probably has extended to all his colleagues, apart from the spokesman from the Front Bench, but that is the way of the world.
My Lords, clearly my noble friend Lord Phillips is a pushover. I do not recall having a copy of that letter. I have looked through my file of letters from the Minister, of which there are many and all of them greatly welcome, but I do not see a copy of the letter to my noble friend Lord Phillips.
What is interesting about the Minister's reply, which he clearly took great care in putting forward, is that by and large it is completely irrelevant. It relates to paragraph (b) of that clause, almost entirely:
"publishing information relating to the distribution of money under this Act or the expenditure of money distributed under this Act".
I have no argument whatever with that subsection. I welcome the Minister's speech; I always welcome the Minister's speech where I possibly can. But, apart from maybe one or two sentences, he did not really address paragraph (c),
"encouraging participation in activities relating to the National Lottery in general".
He merely repeated what he said the last time, which was about the activities of the National Lottery promotions unit. He did not address the particular point that I made, about the drafting of that particular paragraph.
We still have another stage of this Bill and I ask the Minister to take a further look at this issue. Rather than looking at completely the wrong paragraph, it would be helpful if he could look at paragraph (c) between now and Third Reading and see whether it has drafting flaws. I entirely agree that the distributors should be entitled to insist on National Lottery Day, with a National Lottery promotions unit and so on—there is nothing between us. What is between us is what that paragraph could be used to do, in terms of promoting, and participation in, the lottery. I do not believe that there is any point of principle between us, it is all about what the paragraph actually says. I see the Minister nodding and I take huge encouragement from that. I look forward to Third Reading and beg leave to withdraw the amendment.
moved Amendment No. 9:
After Clause 11, insert the following new clause—
"DISTRIBUTING BODIES: REPORTING
After section 34(2) of the National Lottery etc. Act 1993 (c. 39) (annual reports by distributing bodies other than Millennium Commission) insert—
"(2A) The report shall include statements—
(a) the independence of funding decisions;
(b) the principles applied to maintain the distinction between government expenditure and lottery funding; and
(c) the proportion of funding that has been allocated to bodies (other than public bodies or local authorities) whose activities are carried out not for profit.""
My Lords, at each stage of this Bill, one of the main areas of concern right across these Benches and the Conservative Benches has been the preservation of the principle of additionality and the best method by which this can be achieved. I do not intend to rehearse the arguments that have taken place both in this House and in the other place at various stages of the Bill, trying to elucidate what we mean by additionality.
The Committee stage demonstrated that there is broad cross-party agreement on the need to adhere to this principle, even though, we must confess, there remains dispute over how it is best defined. Our concern on these Benches has consistently been that the Bill in its current form fails to safeguard the principle of additionality. We have been disappointed by the Government's resistance to all attempts to do so, both in the other place and in this House. Amendment No. 9 is a neat, convenient and practical way to ensure that attention is given by lottery distributors to the principle, yet it avoids the much-debated pitfalls involved in trying precisely to define the principle. For that reason, the word "additionality" does not appear in the amendment.
In essence, the Government have reached agreement with the lottery distributors to report annually on additionality. We welcome the commitment from the Big Lottery Fund and the other lottery distributors to determine a policy and report on how they uphold the additionality principle. In the light of that, what were the reasons given by the Minister in Committee for refusing to enshrine those commitments in legislation?
First, in Committee, the Minister stated that,
"there is no need to require in the legislation that distributors report on how their decisions are independent of government. Distributors have always had that policy".
But that is as far as it goes. There is no statutory obligation to ensure continuation of such a policy. The principle of additionality is of such importance as to warrant that it is safeguarded through statute.
Secondly, the Minister said that it is,
"bad regulatory practice to increase the volume of legislation on the statute book by putting into legislation something that can be achieved by other means such as, in this case, a voluntary agreement".
On these Benches, we are all in favour of avoiding unnecessary bureaucracy, but that is no answer to ensuring at least a degree of protection of future lottery funds from the politics of the day. A voluntary agreement is simply not enough. All sides agree on the central importance of the principle, which we should see enshrined in the Bill.
Thirdly, in Committee the Minister stated:
"The wording, 'the distinction between core government expenditure and lottery funding', does not allow the flexibility for changes in ideas over time on what the Government should be funding".—[Hansard, 13/3/06; col. 1077.]
But this amendment allows for flexibility. That is precisely the advantage of this practical approach compared with a definitional approach. As I said in Committee, this is not a straitjacket. In view of those arguments, I urge the Minister to rethink and include this vital amendment in the Bill. I beg to move.
My Lords, my name is added to this amendment, which is the result of the noble Lord, Lord Clement-Jones, and myself considering carefully what the Minister said in Committee and trying to come up with a sensible compromise amendment. The Minister will remember that in Committee we moved an amendment asking the Government, in effect, to define additionality, which was resisted by the Minister, as it had been in another place, on the basis that to do so in legislation might create a lawyers' paradise for arguments on how to define core government spending. A second amendment asked the Government to report on additionality. The Government resisted that on the basis that it was not their job and that they would end up having to define it again and that, again, we would be in a form of legal minefield.
So we moved on. Very helpfully, the Minister said that the distributing bodies would report. As a result, we have received a helpful letter from the Big Lottery Fund, from which I shall quote because it is important. It states that it has,
A common framework for reporting on additionality, which will comprise each Lottery Distributor's policy on additionality, including a common definition; how this informs the design of funding programmes and streams and how the concept is operationalised"— not a very nice word—
"at grant giving level.
A common definition of additionality [is] as follows 'Lottery funding is distinct from Government funding and adds value. Although it does not substitute for Exchequer expenditure, where appropriate it complements Government and other programmes, policies and funding'.
Our Annual Reports should be the main vehicle for reporting on additionality".
We agree with that and I think it is a very helpful statement from the Big Lottery Fund, supported by all other distributing bodies. As the noble Lord, Lord Clement-Jones, said, we need a safeguard in the Bill. As the noble Lord said, it allows for flexibility in the definition. It leaves it up to the distributing bodies to report; we are not asking the Government to do anything, so I hope that the Government will, this time around, be able to accept our amendment. We have listened to the concerns put forward by the Government and I think we have addressed them. I think the Government ought to be able to accept these amendments. The Minister knows that there are concerns over additionality; this amendment would go a long way towards solving those problems.
My Lords, I really cannot see the necessity for this amendment, although I congratulate the noble Lords on bringing an amendment to address the dreaded question of additionality without mentioning the word. They are to be very warmly congratulated on that. The amendment also seems to aim to check what proportion of money will go the voluntary and community sector. It also seems to have another crack at limiting what is already, in my view, very limited government influence. It is, in other words, something of a catch-all amendment in trying to do all those things.
It is unnecessary because there are already safeguards in place. We have discussed the independence of decisions about funding at length and have, I hope, established that those decisions are always taken independently by lottery distributors, including the Big Lottery Fund. As we have heard, the Big Lottery Fund and the other distributors are already pledged to monitor and report regularly on the question of additionality, as they are pledged to report on how they will carry out their publicly stated commitment to ensuring that the voluntary sector receives between 60 and 70 per cent of the total sum. If they did not do that we can be assured that NCBO and other voluntary organisations would soon shout loudly about it. There are very heavy requirements for reporting already on lottery distributors, especially the Big Lottery Fund; they are very willing to meet and extend these requirements. To require them to do any further reporting would, in my view, risk their spending too much time reporting and not enough doing what they were set up to do: distribute lottery money to disadvantaged individuals and communities.
My Lords, this a rather gentle compromise amendment, imposing nothing on the Government, other than what they have already agreed to. It is just a question of reporting. This additional reporting would, I submit, bring transparency and clarity to the Bill, and has the potential to prevent misuse. For the reasons outlined by the noble Lord, Lord Clement-Jones, and the noble Viscount, Lord Astor, I support the amendment.
My Lords, I am grateful for the way in which the noble Lords who have pressed this amendment have addressed the issue. I agree that there is not a great deal between us. We have agreed that additionality should, in principle, be reported on. It will be recognised, as my noble friend Lady Pitkeathley so eloquently made clear, that the lottery distributors are prepared to ensure that they comment on this issue in their annual reports. I accept that the noble Lord, Lord Clement-Jones, and the noble Viscount, Lord Astor, have produced an amendment without some of the more obvious parts to which I objected last time, particularly the word "core" in relation to government expenditure. Therefore I am much closer to them in the terms of the amendment.
I recognise the point that the noble Lord, Lord Joffe, makes. He is right to identify that there is not a great deal at stake at this present time, but it is still the case that we would be putting into the Bill a requirement to report. We continue to remain of the view that it is inappropriate to include a requirement for distributors to report on the amount of lottery funding that they award to not-for-profit bodies. The issue of not-for-profit is quite difficult, and it will not be easy for distributors to define it. For example, there is the problem of any grants that are made to social enterprises, because these often make profits but reinvest them in their services. Our policy directions to the other distributors all include that they should take into account the need to ensure that money is distributed for projects which promote public good or promote charitable purposes and which are not intended primarily for private gain.
So we still think that this amendment has weaknesses, and we cannot accept it. With the existing measures that we have in place, to which my noble friend accurately referred, it is not necessary. But I recognise that the noble Lord feels so strongly about what I think is a marginal difference between us that he might press the matter. I do not think that that is necessary. If he will give me time to look at the matter further before Third Reading we shall do so. I cannot give him the assurance that I shall accept an amendment constructed in his terms, but we shall look at it and see if we can come out with a formula that bridges what I think is regarded in the House as a fairly narrow gap between the Government's position and his.
My Lords, that is a fair question. I can answer it categorically, yes—and I shall look at the matter in the context of that framework.
My Lords, I thank the Minister for that very constructive reply. Indeed, he was entirely correct that we would have pressed the amendment to a Division without that assurance. But the assurance that he has given us is very solid and points the way forward to the voluntary sector in particular being very satisfied that that will be in the Bill when we come to the end of the Third Reading in a few weeks' time. With that assurance from the Minister, for which I thank him, I beg leave to withdraw the amendment.
My Lords, this series of amendments addresses the regional dimension. I referred to this at Second Reading and again in Committee and I return to it today. Why? Well, first, regionalism worked with the Community Fund, and this is going backwards. It is even part of the strapline of the Community Fund, which is a decentralised organisation working in every part of the UK.
Secondly, administrative devolution is to remain. We have been told that there are to be regional offices all over England, but regional governance is missing. Thirdly, there is no evidence that there has been any failure with the Community Fund under the existing structure. Fourthly, there is a concentration of power concerning well over £600 million. I believe that it is wrong to have such concentration of power in so few hands and that we should devolve that power within England. Fifthly, if the system is good enough for Scotland, Wales and Northern Ireland and, indeed, for the Isle of Man, Guernsey and Jersey, it is good enough for the English regions.
I listened at the time and have had a chance to reflect on what the Minister said to me. At Second Reading I referred to the committee of the Big Lottery Fund being out of balance. Of its 17 members, three are from Northern Ireland, three are from Wales, three are from Scotland—indeed, one of the English members arrived from Scotland only in 2004—and all but two of the English members represent London and the south-east. At Second Reading the Minister said to me:
"The noble Lord also mentioned the issue of representation. We are in an interim stage at the present time. The current arrangement is a temporary measure, and we intend to provide for the final Big Lottery Fund board to have 12 members: one member each to represent England, Scotland, Wales and Northern Ireland, the other members general UK members. I think that addresses what he regarded as somewhat over-representation of the communities of the United Kingdom and the under-representation of the regions of England".—[Hansard, 6/2/06; col. 500.]
But the more I ponder that, the more I think that is the problem. Normally, when you get temps in, you do not make principles and policies. We have been told that the 17 are temps and that eventually we are to have 12 members, yet they are laying the plans. I am afraid that that has been the problem.
"Devolution to the regions of England is of course a different matter. While it is often a good thing for policy reasons, as the noble Lord will recognise, because he knows how much we have enthused about aspects of regional policy in this Government, there is no statutory framework".
But that is why we are here. This is a Humpty-Dumpty Bill in that the Big Lottery was set up in 2004 and we are only now legislating for it, but legislation can make a statutory framework.
The Minister continued:
"We believe that decisions on how best to ensure that there is an English regional dimension to its work are best made by the Big Lottery Fund itself".
But that Big Lottery Fund has been set up so that that does not happen. The Minister further said that,
"the fund has decided it will not have general English regional committees. English programmes will be national".—[Hansard, 13/3/06; col. 1091.]
My view is that it should be for Parliament and not the fund to decide that. I shall refer later in detail to the fund and its decision-making, but in my view it is for Parliament to decide whether that should be the case.
The Minister further stated:
"I hope the noble Lord will recognise that we have not ignored the regional element with regard to the structure of the fund, but we think a small focused fund concerned with strategy is right".—[Hansard, 13/3/06; col. 1092.]
But this is not a small, focused fund; it is a huge fund. It has huge sums of money with a variety of programmes. Of course, committees are lined up for Northern Ireland, Wales and Scotland.
It is easy to give crumbs to the Isle of Man, Jersey and Guernsey. Perhaps the civil servants assisting the board do not mind too much because it involves only a tiny sum of money relative to the whole, which would be excluded from their powers.
I shall now consider the temporary board and its work. It these days of openness, the temporary board has placed some of its minutes and agendas on the internet. For example, five of the board agendas from October 2004 to May 2005 and eight of the minutes are on the internet. For some reason October 2004 is missing, but they go up to January 2006. March 2006 has not yet arrived on the internet, but I am not complaining particularly about that.
I have no idea how many meetings were held prior to October 2004. There is reference to a meeting in September 2004, so clearly the board met earlier. The Minister said in Committee that the fund had decided that it would not have regional committees. I have been through all the minutes and see no reference other than one at minute 19.4 of
"It was commented that, during discussions, very little mention has been made of the English regions and their needs".
So it remained. There is no information at the next or any other meeting. I have looked carefully through the minutes. In March 2005, minute 24.8(d) states
"that the Board should debate the role of the Country Committees in the context of the Big Lottery Fund as a UK-wide organisation before the re-introduction of any draft legislation".
The board was clearly interested in the legislation—and the issue was picked up again on
It has placed eight separate sets of minutes on the internet, and it is clear that there has been no consideration of the English regions. It seems to me that that temporary committee has not been suitable for the purpose of looking at what is right for the regions of England. Indeed, it is not surprising in those circumstances—seeing that the noble Lord, Lord Barnett, is present—that they had a splendid Barnett formula carve-up of resources which, at a later stage, they reaffirmed.
To conclude, the Minister says that it is not in the legislation. But that is why we have come; to make legislation. The Minister says to me, "It's up to the Big Lottery Fund. They can make their own arrangements". Well, they have not done so, not being set up or equipped to look at the English regions. We can and we should. I beg to move.
My Lords, I must disagree with the noble Lord about the Big Lottery Fund not considering the English regions. It is clear that they will have a strong regional presence with offices in nine English regions, whose primary role will be outreach work, and a national committee for the Reaching Communities programmes. Generally, the needs of the English regions will be looked at in considering all of the different programmes—some of them wide and strategic—that the fund is going to pull together. It also, for example, has ring-fenced funding for certain areas.
So, while it may not be apparent from the minutes, I know from my dealings with colleagues in the Big Lottery Fund that they have given quite strong consideration to regional elements. No one would dispute that that is entirely right; there should be a strong regional presence. Perhaps the noble Lord, Lord Shutt, is actually talking about regional decision-making on funding. I suggest that that has problems, though it is a beguiling thought. The Community Fund had many problems with it in practice, in terms of costs and inconsistent decision-making, and the dissatisfaction with that. I submit that the arrangements that the BLF is making to consider the needs of English regions are adequate and will become even stronger as their programmes roll out.
My Lords, I am grateful to the noble Lord, Lord Shutt, for the way in which he presented this amendment—although it is expressed in similar terms to the amendment that we had in Committee and the debate that we had then. I appreciate that he raises some interesting questions about the way devolution is reflected in the plans for the Big Lottery Fund, about the dynamics of the board and about the way in which grants will be distributed. I am also grateful to my noble friend Baroness Pitkeathley for identifying to him some of the difficulties which might occur if his amendment were to become part of the Bill.
I listened to the noble Lord's arguments carefully but I have not changed my position, which I have no doubt that he will regret. The Bill currently provides for 12 board members, four of whom are appointed to represent the interests of parts of the United Kingdom. Those representatives will have an important part to play in chairing committees that will oversee devolved expenditure in the four parts of the United Kingdom. The National Lottery is, of course, a reserved matter; however, the areas covered by the Big Lottery Fund good causes—health, education, the environment and charities—have all been devolved. We have reflected that in the Bill. By creating the concept of devolved expenditure and providing for the committees to oversee spending, it ensures that decisions will be taken by those best placed to make them.
As I said in Committee, devolution to the regions of England is a rather different matter. It raises the difficulties to which my noble friend Lady Pitkeathley gave voice. Desirable as it might be for a whole host of reasons—and nobody is better equipped to identify them than the noble Lord, Lord Shutt, or to make the case for them with his usual forceful clarity—there is no statutory framework as there is with devolution to the countries of the UK. He will recognise that factor and, because of it, there is no specific provision within the Bill to reflect it. We believe that decisions on how best to ensure that there is an English regional dimension to its work are best made by the Big Lottery Fund itself. Why should the Government force a particular model on the fund? How would that sit with the concerns expressed today, and even more intensely in Committee, about the overall degree of government control of the lottery?
I have concerns about increasing the size of the Big Lottery Fund board so drastically. It is a fairly substantial change that the noble Lord, Lord Shutt, is recommending. The fund needs a UK board that is small and focused enough to provide a real strategic focus to its work. Having nine English regional appointees, as well as the four national-interest appointees, would risk creating a sort of mini-parliament rather than a coherent board.
When the noble Lord, Lord Shutt, spoke equally forcefully in Committee, he made the point that the Community Fund had English regional committees, whereas the New Opportunities Fund did not. He reiterated that point today. He saw that as evidence of a New Opportunities Fund takeover. I do not accept that at all. The Community Fund had no statutory duty to set up English regional committees; it chose to do so as the most effective way to operate. It is entirely open to the Big Lottery Fund to act similarly. We believe that that is a decision for the fund itself; it is not a decision for the Government to make and to put on the face of the Bill. The Big Lottery Fund, of course, will operate in a somewhat different way from the Community Fund and the New Opportunities Fund. Sometimes the focus will be at national strategic level and sometimes at regional or even local level.
Against that background, I understand that the Community Fund and the New Opportunities Fund, operating as the Big Lottery Fund, have decided against general English regional committees. They are in that position at present. The fund has said that it will have English regional representation on the national committees for individual funding programmes where that is appropriate. For example, its Reaching Communities programme will have representatives from each of the nine English regions because it is seeking to be in close contact with the regions. That will allow for regional perspectives to be brought into the decision-making process. The noble Lord will recognise that decisions are being taken that increase the regional dimension. The fund will also have a regional office in each of the English regions, whose primary role will be outreach work. The offices will spend time gathering regional intelligence, which will be fed into the assessment process.
I hope that the noble Lord will recognise that the regional dimension is not being ignored. Where appropriate, arrangements will be made. We should leave the Big Lottery Fund to take up the decisions as appropriate, which has been the case in the past, but we cannot agree that we should put on the face of the Bill a rigid structure that, as the noble Lord, Lord Shutt, indicated, would in his terms advance the regional dimension, but might be, crucially, at the cost of the effectiveness of the overall strategic role which the fund has to fulfil. Of course, we have met the devolution dimension as regards the four countries of the United Kingdom. That is as far as we can reasonably be expected to go in legislation. I hope the noble Lord will consider that an adequate reply.
My Lords, I thank the Minister for his response and I thank the noble Baroness, Lady Pitkeathley, for her interjection. She said that there were problems with the Community Fund, and that is the first time that those words have been uttered in this House. In Committee, I invited the Minister to say whether there had been any problems and none was offered. In Yorkshire, all I have heard is tremendous respect and support for what that regional committee, which was responsible for the Community Fund, did in Yorkshire.
If it is the Big Lottery, it can have a big board. I do not believe that a board of 17 or 20 makes any difference; it is still on the large side. Plenty of organisations have a board of that size; a board of 20 is not overwhelming. The problem is that the 17 have been chosen—no doubt chosen for good motives regarding representation from Scotland, Wales and Northern Ireland—but, bearing in mind the metropolitan nature of the English people who were chosen, only two could be said to be provincial in English terms. Therefore, there is not a sense that that group of 17 has said, "Ah, this is the way that we will organise ourselves". The 17 have been put there in that way so as not to come up with a regional solution.
The other important point is that the Minister says that the board have decided against, but there is no evidence whatever that proper consideration has been given. The only minute is that which says:
"It was commented that, during discussions, very little mention had been made of the English regions and their needs".
It was not even picked up at the next meeting. There is no suggestion that they ever looked at the English regional dimension.
However, as the Minister said, I may well withdraw. I need to think about this, have another look at his response and see if circumstances are right on another occasion to garner a majority. For the moment, I beg leave to withdraw the amendment.
moved Amendment No. 15:
After Clause 19, insert the following new clause—
"REPORT OF INTERNATIONAL EXPENDITURE
In section 34 of the National Lottery etc. Act 1993 (c. 39) (annual reports by distributing bodies other than Millennium Commission) after subsection (2) insert—
"(2A) The report shall set out any awards made during that year for projects outside the United Kingdom.""
My Lords, in Committee I moved a similar amendment, because I was unable to discover by looking at the Community Fund website the nature of its grants to international projects. The information that I did discover was confusing and contradictory.
The Minister has been very helpful since and has sent me an accurate summary of the grants that have been handed out from 1997–98 until last year. Indeed, in his letter he wrote that he would like to clarify that the Community Fund already includes details of its international grants programme in its annual report and that the Big Lottery Fund will continue to include it in future reports.
I have also had a letter from the Big Lottery Fund, saying:
"I can assure you that we will report clearly"— which is important to add—
"in our annual reports and accounts the amount of funding that goes to international projects".
I am grateful for that, because the report that came out of the Community Fund was far from satisfactory. I am going to move this amendment to allow the Minister to repeat that assurance, and I assure the Minister that he can be as brief as he wishes in repeating that assurance. I am grateful for the help that he has given me on this issue. I beg to move.
My Lords, we have made great progress since Committee. Once again, I recognise my debt to the noble Lord, Lord Joffe, who spoke on that occasion and helped greatly in identifying the real issues at stake.
I confess that I am sorry about the difficulties of the noble Viscount, Lord Astor, with the figures and that he has identified some inconsistency. I am afraid that the annual report can only provide a snapshot at the time of expenditure. The amounts paid out may vary slightly from the awards made, for reasons that all of us would recognise with such grants. There are some minor difficulties with the accounts, but, as the noble Lord, Lord Joffe, indicated, not such as to occasion great anxiety about the way in which these programmes are managed.
I want to give the noble Viscount, Lord Astor, the assurance that he seeks—these figures will be carried in the annual report as accurately as they can be made at the time. We have nothing to hide. The lottery has nothing to hide. The one case of some anxiety that we discussed in Committee did not have too much substance. With that, I hope that the noble Viscount will think that I have given him the reassurance required.