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Clause 17 - Outstanding balances

National Lottery Bill – in a Public Bill Committee at 11:15 am on 1st November 2005.

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Photo of Frank Cook Frank Cook Labour, Stockton North

With this it will be convenient to discuss amendment No. 72, in clause 17, page 11, line 3, at end insert—

‘(1A)Money that immediately before the appointed day is held in the National Lottery Distribution Fund for distribution by the Millennium Commission shall on that day be allocated under section 22(3) of the National Lottery etc. Act 1993 (as substituted by section 7 above).’.

Photo of Hugo Swire Hugo Swire Chair, Speaker's Advisory Committee on Works of Art, Shadow Secretary of State for Culture, Media and Sport, Shadow Secretary of State for Culture, Media and Sport

The clause deals with the outstanding balances of the bodies that are to be wound up. We have already debated whether that should be done by affirmative or negative resolution. The amendments seek to separate the Millennium Commission’s balances from those of the New Opportunities Fund and the Community Fund before they all merge into the Big Lottery Fund. We have debated what the Millennium Commission’s balances should be, and I refer to a written answer that the Minister gave to me last month:

“The Millennium Commission’s current balance held in the National Lottery Distribution Fund is £83 million, of which £67 million has been committed to existing grant programmes and for operating costs. The Millennium Commission remains in operation, and Commissioners retain discretion to offer further grants where they believe this to be appropriate. Under the provisions of the National Lottery Bill, the Big Lottery Fund as successor body, would take on any remaining balance and funding commitments.”—[Official Report, 21 October 2005; Vol. 438, c. 1244W.]

So there we have it in black and white.

The amendments are partially a response to that. We are not wholly convinced of the rationale behind the Millennium Commission’s uncommitted expenditure—which is probably about £16 million, perhaps a little less by now. Nor are we convinced that any balance remaining after all existing commitments are paid out should be swallowed up by the Big Lottery Fund. We have already heard that the Big Lottery Fund will benefit from the proposed rule changes on interest and the National Lottery Distribution Fund. Why should the Big Lottery Fund need even more money when it stands to get more than £600 million a year, or is that just an easy way for the Minister and his officials to do things?

I suggest that we put the remainder of the Millennium Commission’s balance, whatever it might be, back into the National Lottery Distribution Fund pot for distribution among all the distributors. After all, the Millennium Commission originally gave money for projects that were related to sport, the arts and heritage. There is no reason why only one sector should benefit from any unspent balances. I know that the Minister will seek to tell the Committee that the Big Lottery Fund will be responsible for monitoring Millennium Commission projects, but I question whether that will cost £16 million. In addition, why should not all the lottery good causes benefit from future receipts from the Millennium Commission, such as the potential sale of the dome, to which the Minister referred earlier? It will be interesting to know how far the Minister has got in trying to arrange the sale of the dome, what money that might yield and why it could not be fairly redistributed rather than, as is proposed, being put into the one big pot of the Big Lottery Fund. I cannot see why that money should go to the Big Lottery Fund alone, and I ask the Minister to reconsider.

Photo of Richard Caborn Richard Caborn Minister of State (Sport), Department for Culture, Media & Sport

As the hon. Member for East Devon says, the amendments would require the remaining balance of the Millennium Commission fund to be distributed to all good causes. Amendment No. 71 would prevent the Millennium Commission’s remaining balances from being transferred to the Big Lottery Fund. Amendment No. 72 would require the balances to be distributed proportionately to all good causes according to their normal percentage share, as provided in section 22(3) of the National Lottery etc. Act 1993.

The current balance of the Commission is £83 million, of which £67million is committed. As successor body to the Millennium Commission, the Big Lottery Fund will be obliged to take on the funding commitments for the Commission’s existing projects. The combined effect of the amendments would therefore be to prevent the remaining balances from meeting those commitments. Indeed, it would be to rob those concerned of the promised funding. It would not be right to transfer the liabilities of the Commission to the Big Lottery Fund without also transferring its assets.

Amendment No. 72 would prevent the use of any uncommitted element of the balance by the Big Lottery Fund for its own projects, including big transformational projects of national significance similar to those funded by the Millennium Commission.

We have tried to bring the three funds together financially, but we have also brought the staff together. I am pleased that we have gradually been transferring staff from work on the millennium project at the Millennium Commission and integrating them with what will be the Big Lottery Fund. They are working well together, so some of the big projects can still be carried out, with the expertise of the personnel who are carried over to the Big Lottery Fund.

Photo of Adam Afriyie Adam Afriyie Conservative, Windsor

We all accept that if the Millennium Commission has liabilities the funds should be available to meet them. I assume that there are audited accounts. However, it is still not quite clear to me what the justification is for putting the remaining balance in the Big Lottery Fund rather than distributing it to all the good causes via the main distribution mechanism.

Photo of Richard Caborn Richard Caborn Minister of State (Sport), Department for Culture, Media & Sport

I do not know, although I could find out for the hon. Gentleman. I guess that probably 20 schemes, or slightly more than that, are still running. Some, by their very nature, are overspending, so the Millennium Commission has to take a view on whether to continue to give support. I think that the hon. Member for Bath knows that in his constituency the spa area has cost a few bob. Some major schemes of that kind have still not come to fruition. I visited a fantastic one on Thursday night in Leicester, which will still be developing for another 12 or 18 months. There are liabilities that could come back to the Millennium Commission—and then to the Big Lottery Fund.

Photo of Don Foster Don Foster Shadow Secretary of State for Culture, Media and Sport

Without stretching your patience, Mr. Cook, by making reference to a constituency issue, may I suggest that the Minister might want to go further in his response to the hon. Gentleman? My understanding would be that the total amount of money, after commitments, that would be left with the Millennium Commission, is of the order of £15 million, and that a large number of projects are currently making bids to the commission to use that money. Therefore, any assurances made now that the money will not be available would be deeply distressing to projects around the country—and I do not refer to any one in particular.

Photo of Richard Caborn Richard Caborn Minister of State (Sport), Department for Culture, Media & Sport

The hon. Gentleman is right about transferring the funds. The Millennium Commission has been involved in some major capital projects, some of which have not yet come to fruition. Some have come back to it, like the Eden project, which in just the past few months has received an extra £7 million for the education project. That is continuing, and I hope that the fact that we have transferred many of the staff to the Big Lottery Fund will mean that there will be continued development of some of the schemes in question. They will continue for a good many years to come and will be a big asset to the nation. We are trying to manage those factors, through finance and personnel, to ensure that a seamless transfer and, I hope, continued development take place.

I hope on those grounds that the hon. Gentleman will withdraw the amendment.

Photo of Hugo Swire Hugo Swire Chair, Speaker's Advisory Committee on Works of Art, Shadow Secretary of State for Culture, Media and Sport, Shadow Secretary of State for Culture, Media and Sport 11:30 am, 1st November 2005

Yes and no. I am extremely glad that the staff who are moving over are working well together. That is clearly a good thing and to be encouraged. I take on board the Minister’s points, not least about the ongoing commitments of the Millennium Fund. I enjoyed the almost subliminal plea from the hon. Member for Bath. I cannot possibly think to what overspend or need for more money he could be referring, but we will let that one go.

The Minister talks about the principle, but I think that that is clear. What he did not address in his answer to the point raised by my hon. Friend the Member for Windsor was the potential gain to the Big Lottery Fund through the sale of any assets originally funded by the Millennium Fund—an issue that I also raised, citing the dome. The Minister argues that 20-odd existing projects are still under way, and I accept that. Clearly, other projects such as the dome, which are worth a lot of money will—

Mr. Cabornindicated dissent.

Photo of Hugo Swire Hugo Swire Chair, Speaker's Advisory Committee on Works of Art, Shadow Secretary of State for Culture, Media and Sport, Shadow Secretary of State for Culture, Media and Sport

Well, I hope that they are worth a lot of money, or else the situation is even worse than we in the Opposition and the majority of people in the country ever deemed it to be. For the fiasco that it has turned out to be, I hope that the Minister will get some money for it at the end of the day.

Everyone is talking about principle, on which we are keen in the Conservative party. What is the principle of allowing all the finance and money realised by the sale of assets owned by or previously operated by the Millennium Commission to go automatically to the Big Lottery Fund and not to be shared among the other good causes? This is another occasion on which I will not be able to withdraw the amendment.

Photo of Richard Caborn Richard Caborn Minister of State (Sport), Department for Culture, Media & Sport

If we were to take that to its logical conclusion, would the other distributors also accept the liabilities? A proportion of any liabilities for Millennium Commission projects should be accepted as well as the assets. Is that what the hon. Gentleman is arguing?

Photo of Hugo Swire Hugo Swire Chair, Speaker's Advisory Committee on Works of Art, Shadow Secretary of State for Culture, Media and Sport, Shadow Secretary of State for Culture, Media and Sport

I believe that the Minister is to write to the Committee to clarify whether a commitment follows the money. Again, we alluded to that earlier and you would not allow us to go back over that ground, Mr. Cook. We have had two or three different answers.

Photo of Richard Caborn Richard Caborn Minister of State (Sport), Department for Culture, Media & Sport

I was very clear. The remaining assets of the Millennium Commission will transfer to the Big Lottery Fund with liabilities, which it will take on board. Is the hon. Gentleman saying that the cash would be transferred—something in the order of £15 million to £20 million—and that those to whom it is transferred would also take on their proportion of the liabilities? Somebody somewhere has to pick up the liabilities. We have, in law, to accommodate for that. Is it fair that those who receive the remaining assets also stand to pay for the liabilities? That is what we have to understand; there are assets and liabilities. He is saying, “Let us distribute the assets, but do not bother about the liabilities.” Is it fair that whoever receives the assets also receives a proportion of the liabilities?

Photo of Hugo Swire Hugo Swire Chair, Speaker's Advisory Committee on Works of Art, Shadow Secretary of State for Culture, Media and Sport, Shadow Secretary of State for Culture, Media and Sport

The point is that the Minister has an advantage over the Committee as, presumably, he knows what the net assets, if there are any, are. We must assume that there are, and if there are then the situation presumably does not arise.

Photo of Adam Afriyie Adam Afriyie Conservative, Windsor

There is a simple concept in accounting called net assets, which is the difference between assets and liability. It is not complicated. Whatever net assets remain after calculating liability minus assets need to be transferred somewhere. The question is whether those net assets should go to the Big Lottery Fund or be shared between all the funds?

Photo of Don Foster Don Foster Shadow Secretary of State for Culture, Media and Sport

Before the last fascinating exchanges took place, the hon. Gentleman was about to complete a sentence which began something like, “This is another occasion on which I have not yet been convinced by the Minister and I will not be prepared to withdraw the amendment.” If that is how the hon. Gentleman was planning to finish the sentence, it may be helpful to tell him that the Liberal Democrats will not support him if he presses the amendment to a Division, for the simple reason that the amendment does not refer to net assets at all—will he please confirm that?—and, were it accepted by the Committee, it would mean handing over to different distributors money that had already been committed. We are not dealing with net assets, even if that were a good idea, and I am not convinced that it would be a good idea.

Photo of Hugo Swire Hugo Swire Chair, Speaker's Advisory Committee on Works of Art, Shadow Secretary of State for Culture, Media and Sport, Shadow Secretary of State for Culture, Media and Sport

I am grateful to the hon. Gentleman. I am sad that he would not support me if I were to press the amendment to a Division. I have enjoyed his support during the past few days, but the Conservative party has survived without Liberal support since 1912 and will do so again. However, I take his point.

Photo of Hugo Swire Hugo Swire Chair, Speaker's Advisory Committee on Works of Art, Shadow Secretary of State for Culture, Media and Sport, Shadow Secretary of State for Culture, Media and Sport

I stand corrected—1922. By extending the debate on this point, with your indulgence, Mr. Cook, I have tried to tease out what the Minister is getting at. Until the confusion about distributors and the reallocation of funds and what goes with that is cleared up by the Minister, we should not divide.

Photo of Andrew Turner Andrew Turner Shadow Minister (Cabinet Office)

As the clause refers to money, I am beginning to wonder whether the Minister, who has suddenly become interested in liabilities, believes that the funds will be in debt. He shakes his head. He does not believe that the funds will be in debt. Does he therefore believe that, apart from the money—apart from the bank account, as it were—the funds will have some other net liability when they are wound up, or does he believe that there will in fact be a net asset as described by my hon. Friend the Member for Windsor when the funds are wound up?

Photo of Hugo Swire Hugo Swire Chair, Speaker's Advisory Committee on Works of Art, Shadow Secretary of State for Culture, Media and Sport, Shadow Secretary of State for Culture, Media and Sport

The question is directed to me, but I am unable to answer on behalf of the Minister. It is clear that the Minister does not know the position of the Millennium Fund. That is strange, given that he seeks to wind it up and to transfer assets and liabilities, whichever they may be, to the Big Lottery Fund. It is strange that the Minister cannot give us even a   guesstimate as to what the situation is. It is extremely difficult to enshrine in legislation and take into account what we do not know.

I am happy to let the Minister answer on the bigger question and then seek to return to this matter on the Floor of the House. At that time, we may have had greater clarification from the Minister as to the net position of the Millennium Commission. Therefore, I do not wish to prolong this debate any further. I have succeeded in my aims and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 17 ordered to stand part of the Bill.