Clause 14 - Functions

Part of National Lottery Bill – in a Public Bill Committee at 6:30 pm on 25th October 2005.

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Photo of Richard Caborn Richard Caborn Minister of State (Sport), Department for Culture, Media & Sport 6:30 pm, 25th October 2005

The amendments relate to the Big Lottery Fund’s functions as set out in proposed new section 36B to the 1993 Act. Amendments Nos. 15 and 35 would limit the value of the loans made by the Big Lottery Fund and amendment No. 15 provides that the value of the loans made by the fund should not exceed the value of the grants. Amendment No. 35 provides that the total value of the loans made in a financial year should not exceed one quarter of the total monetary value of loans and grants combined.

New section 36B sets out the Big Lottery Fund’s main power to distribute funds. The funds will be used to make grants, loans, or other distribution arrangements. We think that it would be useful if the fund had the flexibility to provide funds in different ways to respond to different needs and different circumstances. Parliament gave similar powers to the Olympic lottery distributors in the Horse Racing Betting and Olympics Lottery Act 2004. We do not expect loan making to be a major function of the Big Lottery Fund; we certainly do not intend to turn it from a grant-making body to a loan company. That is clear from the range and nature of grant-making programmes that have already been announced. The circumstances in which the fund may lend money and the conditions that it will be required to observe will be included in the financial directions; that is the case with all non-departmental public bodies, including lottery distributors. No one wants to turn the Big Lottery Fund into a big loans company. For those reasons, we are not convinced of the need to provide restrictions in the Bill. I hope that the amendments will not be pressed.

Amendments Nos. 36 and 39 focus on the Secretary of State’s order-making powers under proposed new section 36B(3). That power allows my right hon. Friend to limit the amount or proportion of money that the Big Lottery Fund may spend on different types of prescribed expenditure. Amendment No. 99 would remove the Secretary of State’s powers to specify maximum and minimum amounts and amendment No. 36 would remove the Secretary of State’s order-making powers altogether.

I shall explain why those order-making powers are necessary. As I said in relation to clause 7, the new good cause provision is extremely broad. We need to be able to set out at the highest level the types of expenditure on which the Big Lottery Fund should focus, and clause 7 allows us to do that. The order-making powers in clause 14, which would in practice be exercised at the same time as the powers in clause 7, allow us to limit the amount or proportion of that money that the Big Lottery Fund may distribute on the different types of prescribed expenditure. Without that power, the fund could in theory spend all its money on one type of prescribed expenditure—for example, on transformational grants. The Secretary of State plans to use the power to specify the amount or proportion of the money that the fund should spend on transformational grants and the awards for all   programme. We do not intend to specify the amount or proportion of money in relation to the three main funding themes.

We recently consulted publicly on an interim order for the New Opportunities Fund; the order is as far as is possible under the existing legislative framework the same as the one that we propose to issue in due course for the Big Lottery Fund. In the 15 responses we received there was no substantive comment from consultees on the draft order, which suggests no great concern about the order-making powers. We have also made available to the Committee an illustrative order using the powers set out in the Bill, which I thought would provide further reassurance about how we intend to exercise these powers. In light of what I have said, I hope that hon. Members will withdraw their amendments.