Only a few days to go: We’re raising £25,000 to keep TheyWorkForYou running and make sure people across the UK can hold their elected representatives to account.

Donate to our crowdfunder

Clause 14 - Functions

Part of National Lottery Bill – in a Public Bill Committee at 6:15 pm on 25th October 2005.

Alert me about debates like this

Photo of Don Foster Don Foster Shadow Secretary of State for Culture, Media and Sport 6:15 pm, 25th October 2005

The Minister read out his brief the last couple of times he spoke, so for the Committee’s amusement, and because it will be quicker, I shall do the same.

The amendments are designed to amend the legislation governing the Big Lottery Fund’s powers to distribute funds. Amendments Nos. 15 and 35 deal with the BLF’s licence to grant loans. Amendments Nos. 36 and 99 are designed to curb the Secretary of State’s powers over the BLF.

One of the national lottery’s founding principles was that it would support good causes through grant funding. As a result, the lottery distributing bodies have developed a wide range of different grants that meet the voluntary and community sector’s diverse needs. In some cases, however, loan finance can play an extremely valuable role as part of a funding mix for some voluntary and community sector organisations. Organisations such as the National Council for Voluntary Organisations have established programmes that use loans to help bodies to become   financially self-sustaining. A loan could help an organisation to set up a trading arm or to purchase a building that they could then hire out. Those initiatives allow voluntary and community organisations to break their dependence on short-term contracts or grants, including grants from the Big Lottery Fund. Those are examples of the way in which lottery funding through loans can sustain the voluntary and community sector. Loans can increase an organisation’s capacity to generate independent income or to obtain more funding.

Although loans can help to promote sustainability among the voluntary and community sector, grants also play a critical role in funding good causes. Grants can be tailored to meet the good causes’ diverse needs and one-off grants can be used to breed innovation. Grants fund projects and organisations that would not secure support from elsewhere. The pressure to repay loans could hamper many organisations’ ability to develop pioneering schemes. The NCVO reports that a general shift towards loans could adversely affect the voluntary and community sector’s income and fundraising activities by forcing it to fundraise in order to repay loans to the BLF. The balance is a difficult one. Loans can be beneficial, but grants, too, are crucial. We must get the balance between the two right. Our probing amendment is designed to ask what proportion of funds will be distributed in loans. Will the Minister confirm that grants will account for for the majority of payments, as our amendment proposes, if not three quarters of all funding, as the Conservative amendment proposes?

The second pair of amendments is concerned, yet again—it does not say yet again in my brief; I admit to adding that, even though the person who wrote the brief might be upset that I have started to busk a bit—with the Secretary of State’s remarkable powers to control the BLF. While the Conservatives have suggested eliminating much of the Secretary of State’s power over the BLF, the Liberal Democrats are particularly opposed to the Secretary of State retaining the power to specify the maximum and minimum amount that may be distributed

“during a specified period for expenditure of a description prescribed under section 23(3A)”.

It is most important that the BLF should retain the right to set its own maximum and minimum amounts and that the Secretary of State should not encroach too far on the distribution of funds. I hope that those comments have been for the edification of you, Mr. Gale, and the entire Committee.