Clause 17

Part of Dormant Bank and Building Society Accounts Bill [Lords] – in a Public Bill Committee at 4:00 pm on 15 October 2008.

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Photo of Ian Pearson Ian Pearson Parliamentary Under-Secretary, Department for Business, Enterprise & Regulatory Reform, Economic Secretary, HM Treasury 4:00, 15 October 2008

It is right and important that we have this debate on additionality. I recognise the intention of the amendment, but suggest to the hon. Member for Fareham that it is defective and would be damaging. I want to be clear about the principles that underlie the Bill. We are very clear that additionality is fundamental to the distribution of dormant account assets. I do not take a Manichean view of the world—life is a lot more complicated. I shall simply observe that hon. Members and noble Lords rehearsed arguments about additionality for a great amount of time when debating the national lottery legislation, and they had enormous technical difficulties in trying to produce a workable legal definition for primary legislation. Therefore, they came up with a different approach, which is why the National Lottery Act now requires lottery distributors to report annually on reporting practice with regard to additionality. That reporting is informed by an understanding of additionality agreed between the distributors and the Department for Culture, Media and Sport in that

“Lottery funding is distinct from Government funding and adds value. Although it does not substitute for Exchequer expenditure, where appropriate it complements Government and other programmes, policies and funding.”

The point about partnership funding was made by my hon. Friend the Member for High Peak. The practice is now well established. We are committed to the principle that lottery money will not be allowed to become a substitute for funding that would usually fall to mainstream Government spending. Distributors are well aware of that, and the Government expect them to abide by that principle.

In summary, I wish to restate that spending from dormant account money must be additional to the Government’s provision. We recognise that unclaimed assets are, in effect, community resources and it is right that they are spent for the benefit of communities. They are not, and must not be, a substitute for Government funding, but they can rightfully complement and add value to the Government’s funding streams and strategies, whether at central or local level. The hon. Member for Fareham gave an example of when that might be the case.

Lottery funding allows things to happen that would not take place if they depended on Government funding alone. No one would argue that, just because the Government already spend money on the arts, our cultural heritage and sport, the lottery should not do so. The same is true of health, education and environmental projects, which the hon. Member for Cities of London and Westminster said were popular causes that were added back in 1998. By and large, the current system works well. The practice is pretty well established, and we intend to follow that model in the Bill.

Prescribing additionality is not only incredibly difficult to do—I do not think too much of the attempt made at that by the hon. Member for Fareham—but it could have the unintended consequence of restricting the types of projects to which the Big Lottery Fund could award funds. Organisations and innovative projects that would otherwise meet the purposes for distribution could be hindered in their application simply because they might not meet the strict interpretation and legal definition of what is additional if it were specified in the Bill. A definition of additionality could stymie the Big Lottery Fund’s ability to give dormant account money to worthy causes. It could also significantly increase bureaucracy and it would open distribution policy up to further legal challenge. For those further reasons, a definition would be undesirable.

We have adopted the right approach. We should not have a definition of additionality because we cannot find one that is agreeable. However, we have agreed on an understanding of additionality through the National Lottery Act between the distributors and the DCMS, which we shall replicate through our approach. That is why paragraph 9(3) of schedule 3 requires the Big Lottery Fund to report annually on its

“policy and practice in relation to the principle that dormant account money should be used to fund projects, or aspects of projects, for which funds would be unlikely to be made available by” the Government. That mirrors the provisions to which I referred earlier in respect of the DCMS. It is the most appropriate way in which to ensure that additionality is delivered in a clear and transparent manner, so we invite members of the Committee to reject the amendment.

However, it is important to debate additionality because we appreciate the concerns that have been expressed  about such matters. We want to stress the Government’s commitment to the fact that the money will be genuinely additional.