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Section 28 of the Charities Act 1993 allows relevant bodies to investigate dormant charitable accounts, which might be some sort of safeguard. However, in view of the long-term nature of endowment funds, it is reasonable to imagine that a charity's function might change over time. It is important to ensure that the money is being used for exactly the purpose for which it was intended. Recent revelations that lottery funding is going to unpopular causes should not be repeated. An appeals panel reinstated two Surrey schoolboys who had been expelled after threatening to kill their teacher. The lottery gave £200,000 to the organisation giving the expelled boys advocacy—the community education network. My hon. Friend the shadow Secretary of State for Culture, Media and Sport called it
- "another blow to the credibility of the lottery".
Those are controversial examples and I am sure that we are not going to get involved in providing endowments for such things. However, if something goes wrong with an endowment—if it is either unpopular or badly managed—surely we need some device to ensure that the moneys can return to the distribution fund. That is what my amendment is about.
Those are my three amendments. The first would provide reassurance that the Comptroller and Auditor General could become involved; the second would provide an opportunity to debate at what level the moneys distributed should be capped; and the third would ensure that moneys could, if there were a problem, be returned to the distribution fund.
Mr. Keith Simpson: My hon. Friend the Member for Gainsborough (Mr. Leigh), from his formidable position as Chairman of the Public Accounts Committee, has outlined his amendments with clarity. I recall during my time as special adviser at the Ministry of Defence that the only Select Committee that truly alarmed the policy-making civil servants was the PAC. That body, together with the National Audit Office, is quite rightly regarded as the guardian of public expenditure. Given that my hon. Friend generally supports the Bill, I hope that we can view his amendments as probing amendments, and that we can answer some of his questions.
I begin with amendment No. 5. As my hon. Friend pointed out, it would enable the Comptroller and Auditor General—and therefore the National Audit Office—to examine the accounts of any person in receipt of lottery moneys
- "for the purposes of establishing or contributing to an endowment".
Mr. Leigh: That is unnecessary, because the Comptroller and Auditor General always reports to Parliament through the Public Accounts Committee. There is therefore no need to build that into statute.
Mr. Simpson: I accept my hon. Friend's intervention.
It is worth mentioning that the CAG is already the external auditor of distributing bodies, with wide-ranging powers to examine their books, documents or papers and to
- "carry out such examinations into the economy, efficiency or effectiveness with which the body has used its resources in discharging its Lottery distribution functions as he"—
In addition, I understand that the financial directions for lottery distributors require them to include as a mandatory condition of any lottery grant—whether to an endowment or not—a requirement that the recipient of grant provides regular progress reports and any further financial or other information that the distributor may require. That is right and proper. I believe that those two conditions provide the CAG with adequate scope to obtain information about the control and management of funds from lottery grant recipients. I also understand that the Minister is prepared to reflect further on the issue in respect of future lottery legislation and there is a forthcoming White Paper on lottery distribution. We are all in favour of that.
I hope that, when he has heard my hon. Friend the Member for Ryedale (Mr. Greenway) and the Minister, my hon. Friend the Member for Gainsborough will be
convinced that the safeguards are adequate. I fully support my hon. Friend's intention and I certainly do not want to open up in respect of the Bill any area of doubt or vulnerability.
Mr. Greenway: First, I welcome the intervention of my hon. Friend the Member for Gainsborough (Mr. Leigh), who has rightly reminded us in timely fashion that we need carefully to examine issues of accountability and transparency in respect of the distribution of lottery funds and the value for money that they achieve. As my hon. Friend the Member for Mid-Norfolk (Mr. Simpson) says, that matter has far wider ramifications than the changes that his Bill will introduce. We believe—it is the view of the official Opposition—that the matter should be addressed in detail in the forthcoming White Paper on proposed changes to the lottery.
It is now time, some 10 years after its introduction, to review the standing of the lottery. On considered reflection of the findings, we should then introduce and implement the necessary changes. The issues should be examined across the board for the lottery as a whole. We need to examine whether further powers of accountability are necessary and how to implement them. I have no doubt that the Comptroller and Auditor General and the Public Accounts Committee will have important roles to play. However, I do not want to jeopardise the Bill today by introducing the changes in the amendments. As I said, the issues are more wide-ranging than the matters in the Bill.
On amendment No. 3, my hon. Friend the Member for Gainsborough is right to draw attention to the fact that lottery funds are in much shorter supply than when the lottery first started. Indeed, in the charities sector more than others, more applicants are disappointed at being unable to secure the money that they want. However, the Bill does not fetter the discretion or flexibility of the funding body. If it transpires that endowments are not the best way of distributing the bulk of lottery funds made available to the distributor, endowments do not have to be made.
Mr. Chope : Does my hon. Friend share my concern that we have not seen the draft guidance that the Minister intends to give to the distributing bodies? If we had that guidance before us today, it would give us a much clearer idea of the Government's intentions.
Mr. Simpson: My hon. Friend makes a good point. Yes, he is right up to a point, but that does not mean that we should not approve the Bill. I am sure that the Minister and his officials will want to consult funding bodies, particularly the charities board, on that guidance. We are moving into a new area for the charities board, which has not previously been able to give money to endowments. My hon. Friend the Member for Gainsborough touched on another relevant issue: if people can see that their money is contributing to good causes, they are more likely to buy lottery tickets.
Bob Russell: Is the hon. Gentleman seriously suggesting that people buy lottery tickets because a few pence go to good causes? My understanding has always been that people buy lottery tickets in the hope of becoming millionaires.
Mr. Greenway: Undoubtedly some people play the lottery in the hope of becoming a millionaire, but others are more realistic and recognise that their chances are around 14 million to one. They care where the money goes, and I am sure one of the reasons why lottery ticket sales have been falling is that people can see that too many of the proceeds are going to causes that the Government should fund out of public expenditure. People want the money to go to good causes.
I can see the point that my hon. Friend the Member for Gainsborough is making. If money is given to an endowment, how can one ensure that it ends up with a good cause? The answer lies in the response that my hon. Friend the Member for Mid-Norfolk has had to his Bill. In Norfolk, it is hugely popular and that is because of the good causes that the endowments promise to support—small, local charities that, on their own, do not have the capacity or the ability to apply for a lottery grant individually. The endowments will be able to support them, and that is very pertinent, especially for projects that require revenue rather than capital expenditure. While my hon. Friend the Member for Gainsborough is right to remind us that we do not want too much of the Community Fund's money to go into endowments, I hope that those endowments that are funded will—through the charities that they support—encourage ticket purchases and increase sales.
My hon. Friend referred to a comment made by my hon. Friend the Member for North-East Cambridgeshire (Mr. Moss) on Second Reading, when he asked what would happen if an endowment ceased to exist. From my experience of supporting lottery applications in my constituency, it is usual for the distributor to ensure, in the funding agreement, that any moneys that are not put to the purpose for which they were given are returned. Indeed, I have a problem in my constituency at the moment because the sports fund gave money to the Huntington stadium to build an athletics track that will have to be ripped up if it becomes the home of York City football club—of which I am the president—and if that happens, the money has to be repaid or a track has to be built somewhere else. The key is to ensure that the agreement deals with the problem that my hon. Friend raised. As my hon. Friend the Member for Christchurch pointed out, that means that the guidance to the funding bodies has to be right to ensure that that point is covered.
The amendments that my hon. Friend the Member for Gainsborough has tabled raise three issues pertinent to the general management of the lottery. I hope that he will accept that those issues are not for the Bill before us today, which should proceed, without the amendments. I assure my hon. Friends who have raised concerns today that if I am involved in the scrutiny process of the changes in the lottery that the Government bring forward—as I hope to be—I will consider carefully the points that they have raised and ensure that they are properly debated. We need to strengthen the management of the lottery, because that will give it greater credibility and encourage confidence in it. That is the best way to increase ticket sales and therefore the support for good causes.
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