‘(2)In exercising his duties under section 33 (3), the Comptroller and Auditor General may make recommendations to the Secretary of State regarding the desirability of making an order to provide for the money to be held for distribution by a different body specified in section 23 (without altering the purpose for which the money is allocated).’.
Welcome back to the Chair, Mr. Gale. For those following our proceedings, in an odd but nonetheless perfectly logical order, we move from clause 14 to clause 8.
This is a highly controversial clause, whereby the Secretary of State will take upon herself a range of powers. If she does not like one distribution body and does not believe that it is doing enough to reduce its balances, she will be able to take away its money and give it to another distribution body.
Somewhat surprisingly, I speak to my own amendment with a degree of reluctance. It is somewhat wimpish. Were I to have felt gung-ho and bold, I would have proposed the deletion of all the powers. Knowing that the Minister would not accede to that, however, I thought that it would be more helpful to table a watered-down amendment for the Committee’s and the Minister’s consideration.
The amendment is so watered down that I can see no justification whatever for the Minister to refuse it. It says that if the Secretary of State is to use those draconian powers, which I am uncomfortable with her taking, it should be at least with the advice of an external body.
The Committee will be aware of the explanatory notes as well as the Bill. The notes say about the power:
“In practice, the Secretary of State would only use this as a last resort in the event that a distributor was considered to have failed, signally, to reduce balances to a reasonable level and there were serious concerns about the ability of a distributor to act economically and effectively.”
We have it on record that the provision will be an absolute last resort, and the Minister will no doubt repeat that. Nevertheless, it is clear from the notes that the Secretary of State will judge whether the distribution body has failed to reduce its balances. It will be her judgment whether the body is at fault, for reasons that she will determine.
My amendment simply says, “For heaven’s sake, we have a body that constantly reports on the lottery and matters of balances, namely, the National Audit Office.” The Minister will shortly refer to the most recent report from the National Audit Office to give succour and support to what he seeks to do, so he will acknowledge that it has a vital role to play. I merely suggest that some advice should be sought from the National Audit Office before the Secretary of State uses those powers.
Given the nature of the clause and the amendments, the debate will understandably be widened to include the question of the balances more generally and whether there is a serious problem with them. The Minister will no doubt say in a few minutes that money must be transferred as quickly as possible to projects and that it should not sit in distributor bank accounts any longer than necessary. I accept that, but I do not accept that increased political interference under the proposed legislation is the way to deal with a perceived problem.
Order. The hon. Gentleman is stretching a little bit wide of his amendment. He has been sitting on Committees long enough to know my custom. I am perfectly happy to have the stand part debate at the start of the debate on the clause, rather than at the end, but I do not want to have it twice. If he wishes to broaden his remarks, he may, but that is on the strict understanding that we shall not repeat the stand part debate.
I am most grateful, and I will obviously abide by your ruling. The proposal is that the Secretary of State be given the power to hand over money in circumstances in which distributors have not got rid of their balances in a sufficiently timely manner. I was just about to make the point that, without the powers that the Minister seeks, there has already been significant movement in that regard. The Minister will remind us that, in 1999, the balances stood at £3.7 billion, but by May this year they were down to £2.4 billion. That significant reduction has taken place without the need for the type of action that the Minister proposes in the clause. The power in the clause will be increased by the two Government amendments in the group.
The additional powers are potentially unnecessary, given the successful reduction. My amendment mentions the NAO because there is a real issue about how rapidly and to what extent we want to reduce balances. The NAO, which is the body that I want to involve in making the decisions, addressed this matter in last year’s report, “Managing National Lottery Distribution Fund balances”. I accept that there is a more recent report, which the Minister referred to, but this one states:
“The build up of balances at the start of the National Lottery reflected the... time lag between money being paid into the National Lottery Distribution Fund and it being awarded to and drawn down by grant recipients... The current level of balances is therefore the result of the low rate of drawdown compared to income in the first four years of the Lottery.”
Critically, it continues:
“There can be a significant gap between a grant being awarded and the project starting to incur expenditure and draw down funds.”
The Heritage Lottery Fund, for example, reports that its largest grants—those of more than £5 million—are paid out on average over four years and two months, although some take as long as eight years. The HLF may well be in a position where it has allocated the money, but has not yet given it out. It reported in a brief that I think that all Members of the House received that, far from its balances being underspent, as was implied, it was actually overcommitted in terms of its planned expenditure by £175 million.
The hon. Gentleman is right that the heritage sector is concerned about these and subsequent amendments. Does he agree that if pressure of this sort was applied to the HLF, it could result in an acceleration of allocations and grants and in the money being drawn down in a way that might be unwise given the complicated nature of many of the funding programmes that the HLF undertakes, and that it would lead to less control, rather than better control, being exercised over the money being spent?
The hon. Gentleman is right; I agree with every word that he has said. That is why we need to treat with caution the powers that the Secretary of State wishes to take on herself. At least, there is a need to include some additional counterbalance to what the Secretary of State might be thinking. When the reallocation of funds is mentioned in the Bill and the explanatory notes, there is no mention of the NAO, yet it has a great deal of expertise in this field, as demonstrated by its numerous reports on the matter—reports that are prayed in aid when making the decision to go ahead with the new powers given to the Secretary of State in the clause.
I am genuinely fearful that indiscriminate reallocation of funds would cause huge problems. There is no doubt that if that happened it is quite likely that a new distribution body would be set up. I have no doubt that if the Government were to do that, the body would have all the powers imposed on it that they are imposing on the Big Lottery Fund. In many cases—not always—a new body would have to be set up, and that could create a problem.
However, there is a further problem. If the money is to be transferred to a new distributing body, or just another one, there would be concern that some of the commitments already made by the old distributing body would not be carried forward. If the Minister does nothing else in responding to the amendment, will he give the following categorical assurance? If funds are to be transferred from one distributing body to another, all the undertakings and commitments given by the original distributing body should also be transferred to it.
I accept everything that the hon. Gentleman says. Like him, I am a huge fan of the HLF, the work that it does, the efficiency with which it does it, its increasing involvement of members of the public in making decisions and the innovative projects that it has supported. I have no reason to believe that the HLF would fall foul of the powers that the Secretary of State seeks to introduce. I am prepared to acknowledge that Governments and Ministers come and go, that the people in the HLF may change. My very limited amendment would not take away the powers from the Secretary of State, but would merely place checks and balances around their use.
On that very point, the hon. Gentleman will recall in an earlier part of our deliberations that the Minister confirmed that heritage would be part of the funding stream beyond 2009. The Minister was careful not to say that the distributor for those funds would be—as things stand—the Heritage Lottery Fund. Does the hon. Member for Bath share a residual nervousness that the Government have other plans?
I hope that the Minister will not be too offended by my remarks. I wish that he had given us a clear commitment that the Heritage Lottery Fund would remain for all time as we know and love it. However, I am not sure how much faith I have in the Minister’s comments in view of the fact that he made other commitments, for example on the Floor of the House on Monday relating to powers taken by the Secretary of State, which have been demonstrated not to match the understanding that the rest of us had. I am a generous man, which is shown in the way I have phrased my remarks, and no doubt the Minister will have noticed that.
There is concern about ensuring continuity of funding. I am delighted that the Minister is already nodding, showing that he will give me those assurances. The National Campaign for the Arts is one of many bodies that have written to me on this issue. It pointed out in its briefing the day before yesterday that
“it is crucial for organisations to know that when money is committed it will be delivered”.
That is clearly a concern felt by many people. Our amendment would give distributing bodies, including the NLF and others confidence that those powers will not be used at the whim of the Secretary of State, but will be used on the advice of the body that knows about such matters—the NAO. Various bodies have sought to persuade me to go further. The National Council for Voluntary Organisations is opposed to what the Government plan to do. In its briefing less than a week ago, it said:
“In effect (this clause) gives the Government licence to raid lottery funds.”
I have some sympathy with that. The chief executive of the National Association of Councils for Voluntary Service, Kevin Curley, states:
“I’m nothing short of astonished at the audacity of the Government. This fundamentally undermines the trust between the voluntary and community sector and the Government.”
There are deep concerns about this clause. I have said that I am not happy with it and that I share the concerns of others. Rather than go the whole hog and say, “Let’s get rid of it”—the Minister will not accept that—I have come forward with what we might describe as the third way. It is a real solution for the Minister, who believes in the importance of consultation and of all those other bodies having a say. I propose that the Secretary of State can have her powers, subject to her receiving advice from the NAO and the Comptroller and Auditor General that the measure is a sensible one to take. In the light of that, I can see no reason why the Secretary of State, and the Minister, representing her, should not accept the amendment.
I have some sympathy with the argument made eloquently by the hon. Member for Bath. His reference to the third way almost sealed the deal, as far as my support for his amendment is concerned. The underlying and most persuasive argument that he made is that all those projects desperately need security and continuity of funding. They never had that before the setting up of the Heritage Lottery Fund. They have quite rightly come to rely on it and it must not be undermined.
I speak as a Member for a constituency where the Heritage Lottery Fund has played a major part in the past few months. The Castlemilk stables restoration has benefited to the sum of more than £330,000 thanks in very small part to my own lobbying. The project has been many years in the planning, and even though the announcement of the grant was made at the beginning of this year, it is not expected that the capital works will proceed for a number of years.
However, a commitment to that grant has been made, and given that it is a project many years in the making, I should be very unhappy, as would many people in my constituency and in Glasgow as a whole, if anything said in this Committee or included in legislation were to undermine the security of its funding.
I understand why the Government dislike the notion of unused balances of many millions of pounds in any bank account held by a body such as the HLF; however, I am simply looking for a reassurance that the hard work already committed to a project such as the Castlemilk stables will not be wasted. I am sure that the Minister appreciates that, because he will get the same message from other members of the Committee.
When the HLF was founded, there was an inevitable time lag between the money entering and starting to leave the fund. It was an inevitable consequence of the organisation’s structure. The first applications took some time to assess and the work took some time to start. As a result there was a build-up of money at the beginning of the lottery, and it has taken some time to come down.
The fund mainly finances medium and large capital projects, and by their very nature they take a long time to get under way. The money that the fund awards them can sit in the bank for several years. I understand why the Government are not happy with that situation, but the hon. Member for East Devon made a telling point. He said that we did not want pressure to fall on the HLF to farm out those grants earlier than might be appropriate. I hope that the Minister will reassure us about that, because in many cases the money would simply be wasted. Surely it would be better to have it sitting in a bank, earning interest, than to give it to a project before it can be properly used.
I hope that the Minister will be able to reassure me that projects such as Castlemilk stables will not be sidelined, delayed or even shelved because of the clause. I look forward to his comments.
I am more than happy to support amendment No. 98, and I thank the hon. Member for Bath for his explanation of it. If we are to allow the Secretary of State the ability to move lottery balances around on a whim, which is in effect what the clause does, it is appropriate that the Comptroller and Auditor General be allowed to give her advice. The National Audit Office has proved itself adept at examining lottery fund balances in a forensic and impartial light. I would go a little further than the amendment and require any such advice to be published if an order is made, but I am sure that the NAO would happily make such information available.
I want to deal mainly with the Government amendments, Nos. 5 and 6. I hope that the Minister will seriously consider our views on these amendments and on clause 8 as a whole, for I genuinely believe that he is committing a grave error. I hope that in a spirit of non-partisanship he will register the concern, if not disquiet, voiced by the hon. Member for Glasgow, South (Mr. Harris) and Opposition Members. I offer my comments as constructive criticism.
It is a fact that neither the NAO nor the Culture, Media and Sport Committee supports the Government’s aims in clause 8, and it goes without saying that the powers in clause 8 are viewed with dread by lottery distributors. Throughout the Bill, the Government have claimed again and again to be doing what the public want and have often prayed in aid their famous consultation process, but of those in that same consultation who expressed an opinion on this power of redistribution, 42 were against and only nine were in favour. It is clear that the public do not want a power of redistribution. I invite the Minister specifically to address that issue.
Let us be frank and concede what we all know. The unspoken truth is that the clause is directed at the Heritage Lottery Fund. I agree that, ideally, high balances in the national lottery distribution fund should be brought down, but I do not agree with the draconian powers in the clause. I have considerable sympathy with the Heritage Lottery Fund, and that sympathy is shared by the hon. Members for Glasgow, South and for Bath. Unlike other distributors, it funds long-term projects. Some of them, as we heard in the example of Castlemilk stables, take years to complete.
Funding is properly allocated and then paid out in tranches rather than all at once at the beginning of the project. It is important, if control is to be retained over long-term projects, not to accelerate distribution for the sake of getting the balances down, but it is equally important that not all the money be paid up front, as once the money is paid over, it is difficult to have any control over the project if it starts going wrong.
The central fact is that the Heritage Lottery Fund’s balance is entirely made up of committed money. I challenge the Minister on this. Committed money is spent money by any other name; it cannot be spent twice. However, there is a further problem, in that there was a discrepancy at the outset of the national lottery between funds coming in and commitments being met. As last year’s NAO report “Managing National Lottery Distribution Fund Balances” makes clear,
“the build up of balances at the start of the National Lottery reflected the inevitable time lag between money being paid into the National Lottery Distribution Fund and it being awarded and drawn down by grant recipients”.
From a sedentary position the Minister said, “What is he talking about?” Presumably he was referring to me, but I was referring to paragraph 2.3 on page 13 of the NAO’s report. So, it is not what I am talking about that is important; it is what the NAO is saying. I think that he would agree that it is a fairly important and independent body.
Paragraph 2.3 states:
“The current level of balances is therefore the result of the low rate of drawdown compared to income in the first four years of the Lottery.”
In addition, the NAO reports, in paragraph 2.4, that
“there can be a significant gap between a grant being awarded and the project starting to incur expenditure and draw down funds.”
The HLF, one of the distributors with the largest balance, reports that its largest grants—those of more than £5 million—are paid out on average over four years and two months, although some can take as long as eight years.
I hope that the Minister will be able to give more details about what the redistributed funds will be used for. I know that that Bill states “without altering the purpose”, but what exactly does that mean? Who will define “purpose”? If heritage funding is being redistributed, who will ensure that an adequate proportion is spent on, for instance, built heritage or environmental heritage? Who will ensure that a future Olympic site—perhaps Wembley or Old Trafford—will not one day be designated a site of sporting heritage to celebrate the 2012 Olympics, if there is an overspend? Under the Government’s proposal, what would stop them from, in effect, bailing out the whole Olympic site by designating it part of our sporting heritage? It will be difficult to argue that it is not part of our sporting heritage in the aftermath of 2012. Lo and behold, redistributed funds could then be used to plug a gap following an Olympic overspend; something that we are all concerned about.
Government amendments No. 5 and 6 give the Government the power to seize lottery balances and give them not only to another, unnamed lottery distributor, but to anybody they so choose. It could well be another lottery distributor, but, as the Bill is drafted, it could equally well be the Treasury. It seems as though the Secretary of State could even name a private company in the order. Perhaps that would not be of much concern to those of us who believe in the private sector, but I suggest that it would cause considerable disquiet to some Labour Back Benchers.
That is why the clause represents what I believe—the view is shared by many others—to be potentially one of the most flawed pieces of legislation that the Government have brought forward. The national lottery was carefully set up so that distributors were subject to a series of proper checks and balances and public scrutiny. There is nothing in the amendments to make the body to which the Secretary of State chooses to give lottery funds subject to any of the regulations mentioned in the Bill. Is that not rather strange coming from a Government who are so fond of making prescriptions and giving directions to lottery distributors?
I know that the Government have included the amendments to solve the problem of what to do if they seize the HLF’s balances. As the Bill was originally drafted, they could give the funds only to another lottery distributor and clearly the Arts Council or Sport England would not be capable of managing heritage projects. However, who are the Government saying should handle these funds? Are we really content to give the funds to anybody? Are we saying that the HLF does not do an exemplary job and that we think at the back of our minds that there could be unspecified, unnamed, unknown organisations out there that might do it better? The only other body that I can think of that would be capable of handling such projects is English Heritage, but, as far as I know, English Heritage has no idea that it might receive any of these funds.
There is clearly no point in including this clause about creating other avenues for distribution if the Minister has not thought about the distributors that might want to be part of it. When he informs us of the organisation he has in mind, I shall be interested to know if has talked to English Heritage, for instance, to see if it might be interested in handling some of those funds.
Since there are no Scottish Nationalists—shamefully—on the Committee, but there are a couple of Scots on the Government Benches, I just want to put on record that giving English Heritage the job of distributing Heritage Lottery Fund money would not go down well north of the border. Given that Scotland does well—better than the rest of the United Kingdom—out of existing arrangements, we do not want to leave it up to English Heritage to start distributing funds.
I shall not be tempted down the road of criticising either the Scottish Nationalists—you would not allow me, Mr. Gale—or the fact that in other areas of finance, the Scots often do so much better than the English. As I am half Scottish, 50 per cent. of me rejoices and the other 50 per cent. is outraged; I should be a Liberal Democrat, really. I do not mean to disparage the Liberal Democrats, who are present to answer for themselves.
The hon. Gentleman is happy in Scotland. Great. Let us leave things as they are. I do not suggest that other bodies could do half as good a job as English Heritage or Scottish Heritage, or whatever the body in Scotland is called. We should not go down that avenue, so I am in accord with the hon. Gentleman.
We cannot let the provision through on the Minister’s assumption that the powers are merely reserve powers, as he has argued at other stages of this Bill. My hon. Friend the Member for Isle of Wight pointed out that reserve powers may not be exercised, or may not be designed to be exercised in the Minister’s mind or the Secretary of State’s mind, but if they are in a Bill, by definition they can at some stage be used by a Minister.
Does the hon. Gentleman agree that he could go further? The reserve powers may be used, and that is a worry; but equally, there is a worry that the existence of the knowledge of the potential use of those powers can have a knock-on impact. Is he aware for instance that in the Gambling Bill, which we debated recently, a set of reserve powers of the Secretary of State seriously reduced the share value of several seaside entertainment outlets?
Does not the hon. Gentleman accept that for a range of organisations the reserve powers under discussion could lead to uncertainty about the security of funding? Their being on the statute book is alone causing a problem.
The Minister says, “Rubbish”, but I am in accord with the hon. Member for Bath. It is not only the uncertainty that the provision creates in those coming forward to obtain funding for their regional projects. After all, the Minister has told us that the Big Lottery Fund is designed to be a one front door—
A one-stop shop, so that more people can apply and applying becomes easier. However, we seem to be fatally undermining one sector—the heritage sector—by creating uncertainty. We do not know, but people might be less inclined to come forward with local projects.
The hon. Member for Bath is right to say that the provision is creating uncertainty also in those who do such a good job in the Heritage Lottery Fund and in that sector. I must tell the Minister that following the creation of the New Opportunities Fund, the heritage sector feels pretty hard hit by the Government. It does not feel that it is getting the support that it deserves.
The absence of a Heritage Minister in the Upper House sends signals to that sector, and it would rather have more positive signals. I do not believe that anything in the Bill is designed to give a warm feeling to the heritage sector.
Does my hon. Friend agree that one major beneficiary of the Heritage Lottery Fund has been the Church of England, which has received nearly £300 million since 1994? Does he also agree that when the Minister responds to this debate it would be good to hear that its position when the Bill is enacted will be no worse than during the past 11 years?
I was talking about warm feelings so it is appropriate that my hon. Friend referred to divine matters. From the spiritual to the divine; he like me and other members of the Committee will have received correspondence from the Bishop of London voicing his concern on behalf of the Church about the Heritage Lottery Fund and the funding stream. Churches and places of worship in this country play a vital role in local communities and anything that threatens or undermines them should be resisted. I am not beating a religious drum; I am saying that from a heritage point of view. Even atheists—it is unfortunate for people if they are atheists, but there will be some in this Room—can support the principle that places of worship are a vital part of our built heritage and our community. I am not surprised that the Bishop of London voices the views of the cathedral. He sent me a nice letter and I am envious that he is able to sign himself “Richard of London”, which is very elegant.
Is the hon. Gentleman aware of the predicament of Union chapel in my constituency, which Time Out London called an unknown gem? It is one of the best places in London for a concert and is also a church. It is just off Upper street and I recommend it.
The problem is that it does not have a roof and in 1997 it was granted money from the Heritage Lottery Fund towards rebuilding the roof. I paid for a tile and one of the vicars paraglided down the side of the building to raise more money for the roof, but we are now nearly 10 years down the line and the roof has still not be built. That £275,000 of Heritage Lottery Money is sitting in a bank account and I hope that we shall be able to have it at some stage. Does the hon. Gentleman agree that we need an assurance from the Minister that the money will still be available if the amendment is made?
The hon. Lady makes a good point, which will no doubt be faithfully reported in her local journal. She is right to seek reassurance from the Minister, but her abseiling vicar should seek medical help at the earliest opportunity. If he finds himself out of a job, Christmas is coming and he could do a good job going up and down people’s chimneys.
I am grateful that the hon. Gentleman gave way for a brief intervention before he finished replying to the hon. Lady. I hope that in his response to the hon. Member for Islington, South and Finsbury (Emily Thornberry) he will draw her attention to clause 9 because it will remove from the Heritage Lottery Fund precisely the same amount that goes in total to places of worship in England, so she would certainly lose out.
The hon. Member for Bath is braver than me; if he continues testing you, Mr. Gale, he may end up inadvertently abseiling from the window into the Thames.
The hon. Member for Islington, South and Finsbury raises a good point, a perfect example of a good local community building, with funding from the Heritage Lottery Fund. that needs further funding. That needs to be guaranteed with reassurance that that funding stream will continue to be available.
Other members of the Committee will have similar examples in their constituencies. The hon. Lady’s example is not unique, which is why we are batting for the Heritage Lottery Fund and the heritage sector. They seem to have been bowled some centre-stump balls from the Government since 1997.
The Government-directed body—they have control over the New Opportunity Fund—is the second biggest offender in this area as far as the Government are concerned. The NOF balances actually rose when the Secretary of State made it a target that all balances should be reduced by 50 per cent. Will the Minister use the powers in clause 8 against the Big Lottery Fund, or are they just to be directed against the heritage sector? I doubt it. I doubt that he will chastise the Big Lottery Fund, even though the fund’s corporate plan of 2005–06 shows that its balances will average out at more than £400 million. Perhaps the Minister will say a few words about that.
I put this to the Minister; let us get some sort of commitment from the Heritage Lottery Fund to set a timetable to reduce its balances as soon as possible, rather than threaten it with draconian reserve powers. Will the Minister agree to that? Otherwise, he must explain his rationale. I urge him in the spirit of co-operation not to press the Government amendments and to omit the whole clause.
I see the Minister growling and I do not want to get on his wrong side, so I hope that he will take this short speech in the spirit—[Interruption.] He is a very frightening man. I understand that he is also a very nice man, though, whose family love him.
A constituent of mine raised a concern about clause 8. It could give the Secretary of State almost unlimited power to siphon money from one good cause to another. For example, although we welcome the Olympics to London—and to Broxbourne in particular—there is a chance that they could cost more than anticipated. Picking up on a theme mentioned by my hon. Friend, the Secretary of State could argue that the Olympics went beyond sport and that in reality the event was a vehicle for promoting the nation’s arts and heritage, as well as education, environment and health. Invoking such ideas, the Secretary of State could reach into other pockets of money and somehow justify procuring money to fund the Olympic shortfall.
I believe that the Secretary of State said during a sitting of the National Heritage Committee on Tuesday that she could not guarantee that there would not be an Olympic overspend. Will the Minister assure us that if an Olympic overspend arises, it will be funded either out of direct taxation or out of the 12 or 12.5 per cent. that the Treasury takes in lottery tax? We would not want some of the money set aside for good causes other than the Olympics being used to fund the London Olympics in 2012.
I shall continue with the point advanced by my hon. Friend the Member for East Devon. I would like to declare an interest. I am not sure whether I am a patron, a vice-patron or a vice-president, but I am involved with the appeal by Sts. Thomas’ church in Newport, which is at the centre of the island. For the benefit of Hansard I should say that the church is dedicated both to St. Thomas and St. Thomas à Becket, so it is difficult to get the apostrophe in the right place. It is the burial place of Princess Elizabeth, who died of a broken heart in Carisbrooke castle, shortly after the martyrdom of her father King Charles I. It was restored under the direction of Prince Albert, but sadly it is now falling down again.
The appeal will be seeking a grant from the National Lottery fund. I am worried that, should a grant be made by the fund and should the building proceed, the money might be siphoned off at a future date. On the other hand, I suppose I should be concerned lest by voting for the amendment I prevent the church, whose appeal I so strongly support, from receiving money from the heritage fund that might otherwise go to another body. For certainty, my preference is for those bodies that are given grants to use them, not for one body to overtake another in the receipt of a grant. Therefore, I support the amendment tabled by the hon. Member for Bath.
Mr. Gale, you have allowed us to broaden this debate into a stand part debate as well.
I understand that the Chairman said that he would allow us to use the amendment to widen the debate. Obviously, he will decide whether we have strayed beyond the amendment, but I would hope that so far he thinks we have not. We may wish to have a stand part debate in addition to the debate on the amendments.
Order. Before we go further down that road, I have known the hon. Gentleman for enough years to know that he is quite prepared to try it on. He knows me well enough to know that I shall not let him.
I take that as an invitation to stray, Mr. Gale, and stray I will.
There is a halfway house—a third way, one might almost say—that is not as wimpish as that offered in the amendment, but which would allow effective use of the funds while not preventing their being used by the bodies to whom they have been allocated. The Heritage Lottery Fund could be granted the same powers as are proposed for the Big Lottery Fund in new section 36B to the 1993 Act to make loans, particularly to private bodies that are engaged in the restoration of private buildings.
Another good example from my constituency is the Georgian stable block at Osborne house. Unlike most of Osborne house, which is in the care of English Heritage, the old stable block is held on a lease from the Crown estate by a private individual, Marion Harrison. She and her family are putting a huge amount of money into its restoration, but it takes a long time for a private individual to raise enough money. The intention is to develop a money-making operation, but also to restore a fine Georgian building to which the public would be allowed access. There would be a return in the form of public access. An early loan from the Heritage Lottery Fund would enable the work to be done more quickly and the public to have access sooner. Why is the Minister proposing such a power for the Big Lottery Fund but not for other funds?
We have had a wide-ranging discussion, about 99 per cent. of it misleading. First, I wish to put on record my support for the good work that the Heritage Lottery Fund does. My Department’s relationship with that fund is no different from its relationship with any other lottery distribution fund; we have a good relationship. The fund has done a fantastic job, and we hope that it will continue to do so.
On ensuring an allocation to the heritage of this nation, the Secretary of State has indicated that funding for the three good causes—sport, arts and heritage—will continue. It is good to know that we will be here well into that period and that the Labour Government will still be in power. Obviously, everybody trusts that we will still be in power. I thank the hon. Member for East Devon for his support and hope that he will continue to serve in Opposition for many years to come.
The Minister must indulge me by giving way because one day he will be sitting here and I will be sitting there. Yet again, he gave a commitment that the heritage sector would receive funding post–2009, regardless of who was in power. What he did not say, whether by deliberate omission or not, is that the Heritage Lottery Fund will be the principal distributor of lottery funds to the heritage sector post–2009. I invite him to say that now.
Any Government who tried that at this early stage would be absolutely stupid. We will hold a wide consultation to ascertain what the British people want. We are in the business of consulting the people who are affected. We will evolve the lottery and its various funding streams. We have given a commitment about the three broad bands that I have mentioned: sport, arts and heritage. The format for distribution will be a matter to be decided at the time. A Minister would be foolish to give that type of commitment so far away from 2009. We will see what happens then. I put on record my support for the HLF and the work that it, along with the other bodies, does.
Amendment No. 98 would make specific provision in new section 29A of the National Lottery etc. Act 1993 for the Comptroller and Auditor General to make recommendations on the desirability of using the order-making power created by the new section to reallocate an excessive national lottery distribution fund balance from a lottery distributing body to any other body.
I can wholeheartedly assure hon. Members that the Government would not seek to use the reallocation order-making power without first giving the matter sufficient consideration. We would use the reallocation power only as a last resort if a distributor had persistently failed to take steps to manage its national lottery distribution fund balance to a reasonable level. The power could not be used without a consultation involving the distributing body concerned and without a vote in both Houses.
The power as drafted would not prevent the Comptroller and Auditor General from offering an opinion should the Government ever propose to make an order using the power. Indeed, it is highly probable that the Comptroller and Auditor General’s view would be sought, in view of the ongoing NAO and Public Accounts Committee input on the balances question. In that case, the Government would, naturally, carefully consider what the Comptroller and Auditor General had to say. I therefore ask the hon. Member for Bath to reconsider pressing the amendment to a vote.
Hon. Members will remember that when the Government reintroduced the National Lottery Bill, they modified the provision to create an order-making power to reallocate an excessive national lottery distribution fund balance from one distributor to another. The equivalent power as framed in the previous National Lottery Bill, which was introduced in the 2004–05 Session, would have enabled a balance to be reallocated not only from one distributor to another but from one good cause to another—for example from the arts to sport, or from the national heritage to charitable expenditure. In contrast, clause 8 of the current Bill creates a power that does not allow a transferred balance to be reallocated to a lottery good cause that is different from the one supported by the distributor from which the balance is to be transferred.
May I just underline what my hon. Friend the Member for Glasgow, South said? There will be no change in the funding that is in place. We are talking about getting the money to its destination in the most efficient and effective way. It is interesting that, since 2004, the HLF has brought its balance down by another 17 per cent. As far as we are concerned, if that was to continue, it would more than satisfy us.
In 1997–98, when the balances were touching nearly £4 billion, a previous Secretary of State brought all the lottery distributors in and they said at that time that by the end of 2004 they would have collectively brought their balances to £1.5 billion. That agreement is on the record, but it has not been delivered. It is amazing that the Opposition do not even want to follow the reports of the PAC and the NAO and introduce some better financial management. As I said to the hon. Member for Bath, if we were assured that the reductions would continue until the balances reached about £1.5 billion to £1.8 billion, we would be satisfied. We believe that it is right, as the PAC has said, that we put that pressure on, but we also believe that there needs to clear discipline.
If I may, I will digress first—with your permission, Mr. Gale. We have had exactly the same problem with structural funds from the European Union. The EU has recently started to withdraw money if draw-down does not take place. The provision that we are discussing is nothing like as draconian as that. It is a last resort, but at least it will bring some discipline to the system.
Already, the Heritage Lottery Fund has in 12 months reduced its balances by a further 17 per cent. That is welcome, and if that trend continues there will be no need to use the powers. If we had to use them, it would be after wide consultation, and with no detriment to the schemes being funded nor to the allocation of those funds. I say to my hon. Friend the Member for Glasgow, South that that is a commitment. The only difference will be that it could well be—I hope not—that another body would dispense the funds more efficiently than the body that allocated the money.
The Minister may have answered my hon. Friend’s question, but he certainly has not answered mine. Does he not make a distinction between the funding process of the New Opportunities Fund and the Heritage Lottery Fund? Surely he would admit that there is a difference. He has just said that if he had to, he would use the reserve powers to introduce other organisations that could be more efficient than the existing fund at handling the funds. What sort of organisation does he have in mind, and why would it be any more efficient?
I am not going to go down the route of saying who would be handling the funds. However, the provision would be used after wide consultation. If there were a genuine difference that showed that we were still getting value for money from the Heritage Lottery Fund due to the nature of the funding that it distributes, as against the Big Lottery Fund, that would be taken into account as mitigating circumstances.
We are not in the business of trying to undermine such bodies as the HLF, Sport England, UK Sport or the Arts Council of England, which are extremely good at their jobs; but we must take into account public opinion. Just under £4 billion was being held in balances, and that has been brought down to just a little more than £2 billion.
It is not the PAC nor the NAO that has to go in front of Jeremy Paxman on “Newsnight” to defend the Government against accusations of incompetence for allowing a body to hold such large balances; it is politicians. This House must take those decisions, and that is why we are introducing a framework for financial management that is in concert with the NAO and the PAC, and with what the general population say. Those balances were between £1.5 billion and £1.8 billion. They are adequate, but there may well be differences between funding regimes because there may be legitimate reasons for keeping certain balances for certain amounts of time. They will form part of the evaluation.
At the end of the day, both Houses of Parliament will make the decision whether to take any action. The deterrent factor is already working in my view. The balances of not only the HLF but other lottery funds have started to come down. The deterrent is having the desired effect, which is that the balances reach a reasonable figure. Generally, business people welcome that.
As a member of that great party of free enterprise, does the hon. Member for East Devon believe that a business would hold £4 billion in unused reserves and just gain interest on it? Would that asset not be used much more productively? A business has to have certain balances, but the level of those balances becomes highly questionable when they reach the rate of £4 billion.
We are going wide of the mark, not in terms of the debate, on which it is your right to decide, Mr. Gale, but in terms of the argument. It is a false analogy to compare a mythical company with £4 billion of reserve money ticking over—that is a commercial decision—with an organisation that distributes funds to projects and needs careful monitoring. The Minister is going down a dangerous road by insisting, particularly in the case of the heritage sector, on accelerating the drawing down of funds down just so that he can have an easier ride with Jeremy Paxman. I am sorry if Government policy is being dictated by fear of Jeremy Paxman. The Minister should adopt the policy of many of his colleagues and refuse to appear on “Newsnight”.
The Minister must know about the disquiet about the reserve powers that the Government are giving themselves in the clause. He keeps saying that he is doing what the public want, reflecting what the public want: perhaps he should do what the public want and not live in such fear of hard questioning from Jeremy Paxman. His own consultation document on the specific power of redistribution states that of those who responded 42 were against and only nine were in favour. Clearly, the public do not want the Secretary of State to have the power of redistribution.
I did not know whether to ask hon. Gentleman to give way half way through his intervention. May I put on the record the fact that inadvertently I probably misled the Committee? The balances are down by 17 per cent. since January 2003 and by 10 per cent. since last year. I wanted to put that straight.
The hon. Gentleman asked what is the difference between the NAO, the PAC and the Comptroller and Auditor General. The difference is that we are accountable to the public, although we may have to go in front of Jeremy Paxman and the PAC. The hon. Gentleman should reflect on what the PAC and the NAO said about the balances in not one report, but two. They said that the balances should be reduced and we are trying to do that systematically, in a way that takes account of all the prevailing circumstances, will not put any funded scheme at risk, and ensures that any action taken after that wide consultation is the result of a decision of the House. The powers are reserve ones that can be used in extreme circumstances, but we are starting to have the desired effect of reducing the balances, which have started to decrease. If they fall to between £1.5 billion and £1.8 billion, I am sure that the PAC, the NAO and the Government will be satisfied that that is broadly acceptable.
The equivalent power in the National Lottery Bill that was introduced in the 2004–05 Session would have enabled a balance to be reallocated from one distributor to another. In contrast, clause 8 of the Bill before us creates a power that does not allow a transferred balance to be reallocated to lottery good causes. In other words, it allows a balance transferred from one distributor to another to be spent only on the same good cause, whether that is the arts, heritage, health, education, the environment or charities. The Government made that change because they listened to public concern that a good cause could suffer unfairly because of the inability of an individual lottery distributor to manage funds in a way that optimises the benefits to projects on the ground and avoids building up excessive balances. However, the change in the proposed reallocation power limits the practical application of the power in relation to distributing bodies which are, at the moment, the sole distributor for the lottery good cause that they support. It would mean that if the reallocation power were to be used to transfer a balance from such a distributor, either the balance would need to be transferred to an existing distributing body whose expertise was in a very different good cause and whose powers to spend on the good cause may be limited; or, more likely, the balance would need to be transferred to a new distributor for that good cause.
Under section 29 of the 1993 Act we have the power to add new lottery distributors in relation to a good cause, which then could receive the balances, but that power also requires us to give the new distributor a percentage share of that good cause’s income. Government amendment No. 5 creates a new way of utilising the reallocation by enabling an order made under it to name, as the recipient body for a transferred balance, a body that is neither an established distributing body, nor a body added under section 29 from the list of distributing bodies in section 23 of the 1993 Act. Government amendment No. 6 would allow the Secretary of State to pay money from the national lottery distribution fund to a body mentioned in an order made under the reallocation power. Without amendments Nos. 5 and 6, that power could not be used. Amendment No. 6 also has the effect of ensuring that the powers conferred and duties imposed on existing lottery distributors apply to the body mentioned in the order. That will allow the body to act in the same way as other distributors, and ensure that it is subject to the same level of accountability and control.
I emphasise again that the reallocation powers will be used only as a last resort and in exceptional circumstances, such as where the distributor has consistently failed to take steps to manage its balances in line with the Department’s guidance and the recommendation of the July 2004 National Audit Office report about the management of the national lottery funds’ balances.
I begin with a huge apology to you, Mr. Gale. It is clear that I have erred and strayed by failing to keep my remarks closely confined to the amendment. I have also allowed a number of Committee members to follow me down that path. So wide-ranging has been our debate that we have, in effect, had a clause stand part debate. I could well understand any ruling of yours that we were not allowed to debate the clause further. I was convinced about how far we had gone when, in the detailed discussion of the Big Lottery Fund and some of its functions, I heard the hon. Member for East Devon tell us that he did not believe that it was competent enough to be a one-stop shop and that it could only be a one-front-door organisation. By the time that we had reached that point, I could understand your concern, Mr. Gale.
However, I am grateful that it has been a wide-ranging debate. If it does nothing else, it will advise the Heritage Lottery Fund that it needs to change the structure of its grant-giving processes. It is clear that it should have not only a separate category dealing with places of worship—that was covered by the hon. Member for Islington, South and Finsbury and her roofless chapel—but one dealing with stables, which the other two projects mentioned are about.
I was slightly taken aback by the Minister’s suggestion that Opposition Members’ speeches had led him to believe that there was a conviction among our parties that the Labour Government would be in power for a very long time. I reflected on that, but then I remembered that he went on to say—clearly indicating that he does not believe that Labour will be in power for very long—that 99 per cent. of what we had said was misleading. I assume that that bit about the Labour Government being in power was in the 99 per cent.
My biggest concern about having had so wide-ranging a debate is that it means we have almost entirely lost sight of my amendment. The Minister has talked about the vital importance of the powers that the Secretary of State would have, given his rationale of why they might be needed, and given assurances that there would be wide-scale consultation; he said that both Houses would have the right to make a decision and to vote on the matter. He has given an absolute assurance, to the satisfaction of us all, that if the power was used and funds were transferred to another distributing body, whether new or already in existence, all the commitments and liabilities would go with them. We are grateful for that assurance, but my amendment was not about any of those things.
The amendment is quite simple. Given that we have lost sight of it, however, I remind the Minister precisely what it says:
“In exercising his duties under section 33(3), the Comptroller and Auditor General may make recommendations to the Secretary of State regarding the desirability of making an order to provide for the money to be held for distribution by a different body specified in section 23 (without altering the purpose for which the money is allocated).”
I began my remarks by saying that the amendment was wimpish and that I would prefer to move an amendment that got rid of the powers, but that I was moving one that merely said that the Comptroller and Auditor General should make a recommendation to the Secretary of State about the order. The Minister agreed that it is almost certain, but not guaranteed, that the Comptroller and Auditor General will be consulted by the Secretary of State, so we are almost there, but nothing he has said justifies his unwillingness to accept the amendment.
The hon. Gentleman answers his own question. I specifically described the role of the Comptroller and Auditor General and said that he would be consulted. I also talked about the ongoing NAO and PAC input into the question of balances. The hon. Gentleman went so wide in moving the amendment that I thought that—he is not even listening, Mr. Gale.
I thought that some of the allegations and charges that the hon. Gentleman made should be answered. If next time he keeps his comments narrowly to the amendment, I will answer on that specific matter.
I said that I had erred and strayed. I apologised to you, Mr. Gale, and the Committee, including the Minister. I do not blame him; I merely point out that because that has happened, it would be helpful to get back to the amendment in my final remarks.
My point is simple: the Minister says that the NAO or the Comptroller and Auditor General will “almost certainly” be consulted; I merely say that that should be a requirement—that the Comptroller and Auditor General should make recommendations to the Secretary of State. I do not see the problem, so I find myself in difficulty. Had the Minister accepted the amendment or given a slightly stronger assurance, I would have asked that it be withdrawn, but I now have the dilemma of whether to press the amendment to a vote or to follow the alternative course of action, about which I am beginning to feel rather more strongly, of trying to vote down clause 8. I choose to beg to ask leave to withdraw the amendment.
‘(2A)An order under this section may not prevent a body from meeting commitments it has made to provide funds in accordance with any agreed timescale.’.
The amendment would protect heritage projects that have already had funds committed to them in the event that Heritage Lottery Fund balances are taken under the reserve powers in the clause. I think that the Minister has already guaranteed that that will not happen but the proposed amendment deals with the potential use of those reserve powers. The Minister has given an absolute, categorical guarantee, but that is not in the Bill and, as we have established over the past few days, we regard that as a fundamental difference. I shall not stray back over that ground.
If for some reason balances were taken and given to another body—we have heard that that is possible under the Government’s proposals—the amendment would ensure that projects to which funding has been committed but which have not yet drawn down all or part of that funding will not lose those committed funds. That would mean that projects that are a long way into the planning stages or midway through a programme of restoration will not face sudden closure. We have heard how long projects can take and how much they can cost. They require different sorts of funding at different stages: some need to be heavily front-loaded, some need funding midway through, and others need funding more toward the tail-end. It is extremely difficult to apply one blueprint to each heritage funded project.
I hope that the Minister will accept the amendment; I even expect him to do so, given what he has said in the past few minutes. It is a reasonable amendment and only clarifies what appears to be the general thrust of the caveat in subsection (2). He must know that if he refuses to do so, he opens up the prospect of already committed lottery funds being used for other projects. I am sure that he does not want that, but if it does happen, what will happen to the existing commitments? Who will decide what the new projects are and which body will take over the balances? I have pressed the Minister on that, but he has been unwilling to share his thoughts with the Committee.
If the amendment is refused, anyone applying to the HLF will have to take into account the risk that heritage funds could vanish before their eyes in the middle of a project. I wonder to what sort of liability those who had originally drawn down the funds from the HLF, or those who are running or responsible for the project, would be exposed? What would be their exposure if in good faith they had sought £10 million or £5 million from the HLF, received a third of it, got the project under way, employed architects, retained contractors and found suddenly, midway through, that the money was no longer there? I wonder what that would expose them to in terms of their legal responsibility. Again, the law of unintended consequence come into play. I wonder whether the prospect of people becoming personally liable in that scenario might deter some people from starting such projects and or from becoming involved in what could be major rejuvenation programmes in local communities—something that both the Government and Opposition are keen on.
We simply do not know enough about the powers in the clause to let it go through unamended. That has been clear from the start. I urge the Minister to accept the amendment, which would be wholly in line with his personal assurances. He would be in the difficult position of arguing against himself if he rejected the amendment. I genuinely cannot see any reason why he cannot accept it.
If the Minister accepted the amendment, would that not be wonderful? It would genuinely show that he does not want to send the wrong signals to the heritage sector. I do not know whether the Government are still signed up to this, but they announced a project called “Listening to Britain”—or something like that: Ministers were meant to go out and listen to what people were saying. Perhaps people out there listening to this debate would wake up and say, “Hey! The Government are listening to us.” We are nervous about the matter, but if the Government listen to what the Opposition have said and take on board our concerns about the guarantee of funding for projects under the legislation, people might be somewhat reassured.
To use a phrase I dislike intensely, the Minister could achieve a double whammy. He could reassure the cynics among us who suspect more devious intentions behind the clause and he could reassure the heritage sector that it will not suddenly be cut adrift mid-stream if the Minister, the Secretary of State, the Chancellor or anyone in the Cabinet finds an urgent need for funding in another area that could be loosely designated a heritage matter, leaving many projects throughout the land hung out to dry. I urge the Minister to accept this very reasonable amendment.
We went out, consulted and got elected. We are discussing the National Lottery Bill, which does not just concern the Heritage Lottery Fund. I know that the HLF has done a lot of briefing, but the discipline in the Bill is for all the distributors, not just the HLF. As I said, it is bringing its balances under control. They have come down by 17 per cent. in the past 12 months and are coming down by another 10 per cent., and that is moving in the right direction.
The amendment seeks to add detail to the new power set out in clause 8 to reallocate excessive national lottery distribution fund balances from one lottery distributing body to another one. It would add a requirement that the power may not be used to prevent a distributor from meeting existing contractually binding grant commitments if the distributor and the grant recipient have agreed a timetable for paying the grant.
The hon. Gentleman may be concerned about the effect of the reallocation order-making power on lottery distributing bodies that pay grants over extended periods. Let me reassure him that he need not be concerned. We would use the reallocation power as a last resort only if a distributor had persistently failed to take steps to manage its distribution fund balances at a reasonable level. The power could not be used without consultation with the distributing body concerned and a vote in both Houses. If we were to propose making an order, one of the key factors to consider would be the existing commitments of the distributor concerned and when they fell due for payment.
I can give an absolute assurance that the clause is not about individual schemes. On the contrary, it is about lottery fund distributors bringing their overall balances down to something that is reasonably manageable; down to where the PAC, the NAO, the Government and the general public believe they ought to be. We will ensure that the financial commitments of the individual schemes will be fulfilled.
The Government have said that they would not exercise the power in a way that would threaten or put into doubt any commitment of a distributor from which they proposed transferring a fund balance. I am happy to repeat that undertaking today.
I have just made the commitment. In operation, an order would be a last resort. That can be quoted in any of the debates that would have to take place in both Houses before the order could be enacted. I give that clear assurance; it is important to do so.
The clause is not about creating uncertainties in the marketplace where the distributors use money to invest in and develop schemes or projects. That is not the object. It is about ensuring that lottery funds are used properly and effectively, and dealing with what the NAO and the PAC have been saying for some time. Indeed, the funders themselves said in 1997 that the collective balances ought to be brought down to about £1.5 billion. They are nowhere near that. Even with all the pressure that we have put on the funds during the past four years, they are still in excess of £2 billion. That is why we have introduced the measure.
I thank the Minister for being so generous in giving way. I wish to clarify what I said earlier. I did not intend to insult him in any way or to question his integrity. It has been clear throughout our proceedings that he is doing an adequate job of steering the Bill through the Committee. My question was about what would happen if there were in law no protection of existing projects. If the Minister were not here tomorrow, would the Minister who followed him necessarily have to stick to his commitments?
The Government would have to carry out commitments made by another Government, unless a change were made in the law or by some other method. Ministers have to act within the law and be reasonable. The commitment has been given, and that is what will stand and what would reasonably be carried out. It is not just a commitment of a Minister but a commitment in what will, I hope, be an Act, that any other Minister who comes to the House with an order would be subject to a vote of both Houses. The debate and scrutiny are there, and the scrutiny is set against the background of what is in the Act. That is why I give those reassurances now.
I am grateful to the hon. Member for East Devon for tabling the amendment. I am sure that it is just a probing amendment. He obviously wants to get some reassurances on the record and I am more than willing to give them. We are talking about good financial management of the funds; we are not in any way trying to undermine any of the distributors or any of the schemes or projects that they are investing in. That would be completely contrary to what the Government are trying to achieve. What we are doing is in concert with what the PAC and the NAO have told us—on not one, but two occasions—in their reports.
In any case, the amendment is unnecessary as the reallocation powers apply only to balances and not to commitments made by a lottery distributor. The distributor would still be obliged to honour those commitments, which is why it would be important to take into account the commitments in considering how to exercise the power.
I was listening very carefully, but will the Minister just repeat what he said? I think that I heard him say that the existing distributor would continue to have responsibility for ongoing commitments, although the funds would be passed on to the new body for it to start afresh. If I have got that wrong, that is fine; if I have not, I am deeply worried about what he has just told us.
I am talking about the expenditure and the commitments that go with it. The distributor would be obliged to honour the commitments, which is why it would be important to take those commitments into account when considering how to exercise the power. We are talking about the commitments, as well as the financial management. I ask the hon. Member for East Devon to withdraw the amendment.
Well, perhaps the Minister would be kind enough to indicate when he is going to make a joke so that we can all prepare ourselves.
We are making a fundamental point. The Minister can pray in aid the NAO report and the timely PAC report, but, overall, those reports are about bringing balances down, and we have done that. The amendment is intended to protect projects that have had funds committed to them from the possibility of those funds being redistributed in some way.
Again, we have the Minister’s verbal commitment on this matter. He has made so many verbal commitments that we almost do not need a Bill; that is, we would not need one if we could hold him to account when we felt that those verbal commitments had not been honoured in any way. I am not impugning his integrity. No doubt he will indicate where he feels that I have impugned the integrity of other Ministers or staff at the Department for Culture, Media and Sport in the past, although I still do not believe that I did.
Again, we are being asked to take something fundamental on trust. Without seeking to insult any individual, I have to say that this Government are suffering from a trust deficit as far as the public are concerned. The Opposition are expected to probe the Executive, of whom the Minister is the shining embodiment, and to hold them to account. Part of that role involves ensuring that things are not just taken on trust, and do not go through with a nod and a wink or on a private reassurance. We are talking about legislation. As the Minister quite rightly said, he hopes that the Bill will become an Act. It would be a dangerous Act if it were not to include this amendment.
Probing amendment or not, it has in fact probed the Minister’s thinking and I do not find his answers or his reassurances sufficient. Therefore, with your indulgence, Mr. Gale, I will press the amendment to a vote.