6. Memorandum submitted by
the Museums Association
THE REFORM OF NATIONAL LOTTERY LICENSING
AND DISTRIBUTION
1. BACKGROUND
1.1 The Museums Association is an independent
organisation representing museums and galleries and people who
work for them. The Association has over 4,500 individual members
and 600 institutional members. These institutional members encompass
around 1,500 museums in the UK ranging from the largest national
museums to small volunteer-run independent museums. The Museums
Association is a democratic organisation; its governing Council
is elected by the membership. It was founded in 1889 and is a
registered charity. It receives no regular government funding.
1.2 The MA welcomes the opportunity to submit
evidence to this inquiry. Museums in the UK have received over
£750 million in funding from the Heritage Lottery Fund (HLF)
since the National Lottery began distributing funds in 1994. (To
put it in context, £750 million is the approximate value
of public investment in revenue funding for the museum sector
as a whole each year in the UK.) Museums have also secured funding
from the New Opportunities Fund and the Millennium Commission.
The National Lottery has begun to transform the UK's museums,
improving displays and upgrading buildings, as well as adding
to museum collections, for everyone's enjoyment. But there is
still much to do and, of course, revenue issues have arisen.
1.3 The Museums Association's comments in
this submission are limited to a relatively narrow area of the
committee's inquiry. We do not wish to comment on the administration
and regulation of the National Lottery itself. We do, however,
have some specific comments on the changes to the distribution
of good causes income.
2. THE PATTERN
OF DISTRIBUTION
OF LOTTERY
AWARDS: DOES
THE EXISTING
PATTERN OF
LOTTERY AWARDS
REPRESENT A
FAIR AND
EQUITABLE INVESTMENT
IN THE
QUALITY OF
LIFE ACROSS
THE UK AND
ACROSS SOCIETY?
2.1 Museums reach wide audiences, arguably
wider than many other forms of heritage and culture. Recent research
found that just over a third of people from ethnic minority groups
had visited a museum or art gallery in the last year, only slightly
lower than the figure for the population as a whole[24].
Over a fifth of people in the two lowest socio-economic groups
visit a museum or gallery every year, compared to under 5% of
people from the same groups who attend a classical music event,
for example.[25]
Museums are dispersed across the UK: there are significant museums
and galleries beyond the UK's capital cities and major urban centres.
Hundreds of village museums, often volunteer-run, contribute to
a sense of identity in communities throughout the UK. Museums
also reach out far beyond their walls through their education
activities, web sites, research, public art and touring their
collections. Providing funding for museums and galleries has the
potential to help to ensure a wider distribution of the benefits
of the National Lottery across the UK and across society.
2.2 That said, Lottery funding for museums
has certainly so far been weighted in favour of London. Although
this is understandable to some degree, given the concentration
of major museums in London, the Museums Association would like
to see funding spread more evenly throughout the UK. In England,
the regional museum hubs being established as part of the Renaissance
in the Regions initiative will offer a useful focus for investment.
Investment from HLF will be an essential addition to the government's
new revenue funding, to ensure that the museums in the hubs will
be able to renew their displays and facilities.
2.3 However, while greater equity in distribution
at a regional level is desirable, equity at a more local level
is neither desirable nor achievable. It would simply not be practical
to seek to ensure that all wards or constituencies, for example,
received a similar level of lottery funding for museums or any
other type of heritage, given the pattern of distribution of museums
and collections across the country. Although there is scope for
the Lottery to fund some new museums and galleries, the majority
of funding for museums will best be targeted at improving existing
facilities. Funding distribution therefore has to be responsive
to the current distribution of museums. A constituency with a
small museum cannot be expected to receive the same level of funding
as one containing a very large museum. Moreover, museums and galleries
serve audiences from outside their immediate local area: one survey
found that over 40% of visitors to larger local authority museums
were from outside the local authority boundaries[26].
We would caution against new methods of funding distribution which
took a narrow or simplistic approach to ensuring a fairer regional
distribution of funding.
2.4 Furthermore, the priorities of distributors
like the Heritage Lottery Fund which seek to preserve and enhance
the nation's cultural and artistic assets, so that they can be
enjoyed by more people, will inevitably be different from those
which seek to benefit communities more directly. It is reasonable
that grants for community events should be equitably distributed
across the UK, or concentrated in areas of greatest socio-economic
need. It is not reasonable that funding for museums and galleries
should be driven by a geographical imperative. The Heritage Lottery
Fund has a duty to help preserve and provide access to the most
important parts of our cultural heritage wherever they are found.
And people can and do travel to visit museums and other kinds
of cultural heritage.
3. DEVELOPMENT:
IS ENOUGH
DONE TO
ASSIST COMMUNITIES
THAT POTENTIALLY
MERIT LOTTERY
FUNDS TO
DEVELOP PROPOSALS,
ETC?
3.1 HLF has gone to considerable effort
to improve the support and advice it gives to applicants. We consider
HLF's work in this area to be a model of good practice.
3.2 However, it is clearly the case that
there remains a good deal of misunderstanding among potential
applicants about the way that lottery funding is distributed.
For example, we have heard anecdotally that a lot of small organisations
considering applying to HLF believe, erroneously, that they will
only get "one shot"; this leads them to put off applying
for small grants, so as not to compromise a potential future major
application. More active work needs to be done with potential
applicants at an earlier stage to overcome this and similar misconceptions.
4. GENERAL: THE
ADDITIONALITY PRINCIPLE
4.1 We believe that the additionality principle
remains under threat. The government seems to favour the New Opportunities
Fund, with its explicit link to government policy objectives.
The other distributors also appear under pressure to conform to
a government agenda in some respects: for example, emphasising
learning and access above preservation.
4.2 We are concerned that this bias towards
certain policy imperatives is gradually undermining the position
of other distributors. For example, the proposal to change the
way that interest on balances in the National Lottery Distribution
Fund (NLDF) are allocated will have an unfair adverse impact on
HLF.
4.3 HLF has a higher level of balances in
NLDF than other distributors. We do not believe that this is an
indication of inefficiency or excessive caution on HLF's part.
HLF funds more capital projects than the other distributors. Those
projects are typically more complicated and subject to more constraints
than those in other sectors. The redevelopment at Stonehenge is
just one of example of the kind of complex and ambitious projects
undertaken by HLF: years in the planning, highly contentious and
demanding careful measures to protect the integrity of this highly
significant site.
4.4 The government's decision document implies
that for the distributors to hold funds in the NLDF is a waste
of public money, a dereliction of the distributors' duty to get
the money out into the community. But balances held in the NLDF
are not "dead". Clearly, they earn interest, which is
ploughed back into good causes. But more significantly, money
in the NLDF is money which is already hard at work. In many cases,
match-funding can only be unlocked when there is a firm commitment
to funding by a lottery distributor. All the money held in the
NLDF by HLF is committed to projects; and HLF is in fact over-committed
by almost 10%.
4.5 The decision document argues that paying
interest to individual distributors on their balances in the NLDF
provides a perverse incentive to maintain high balances. We believe
that there are practical reasons why HLF's balance in the NLDF
is so high. If HLF loses the interest on its balance, it is being
punished for a perceived inefficiency; but we believe that DCMS
has not proven the case against HLF and has not convincingly demonstrated
that maintaining high balances is a sign of inefficiency. We do
not see how HLF can operate and continue to fund large capital
projects without maintaining large balances. We would be in favour
of an independent review of this issue—perhaps by the National
Audit Office—before any changes are instituted.
4.6 Although we understand that DCMS has
no immediate plans to claw back balances in the NLDF, we are very
concerned that this remains a possibility. If DCMS took away any
part of HLF's balance, HLF would then have to dishonour commitments
that have already been made. This would lead to a waste of public
funds: most HLF-funded projects receive some other form of public
funding in match funding, and most have had public investment
in the form of staff time and external consultancy to get to the
stage of making a successful bid. More worrying still would be
the loss of confidence, which could make it very hard to persuade
other funders to invest in projects seeking HLF backing.
4.7 The introduction of a new Olympic Lottery
game would also have an impact on the amount of money available
for good causes. The Museums Association does not oppose the introduction
of a new game: hosting the Olympics undoubtedly offers great benefits
to the UK and museums and other parts of the heritage could also
benefit from investment as part of the games. However, the Museums
Association notes that the Horseracing and Olympics bill contains
a clause allowing the Secretary of State to raid the NLDF to bail
out the Olympic distributor in "exceptional circumstances".
The Secretary of State would also have the power to specify what
proportions of any emergency funding should come from each good
cause area. We are concerned that, in a worst case scenario, this
could eventually lead to heritage suffering disproportionately.
We hope that the Committee will seek clarification of the government's
intentions on this point.
4.8 A review of the share of good causes
income allocated to each of the distributors is planned for 2009,
when Camelot's current licence comes to an end. In the event of
a successful Olympic bid, any shortfall in funding for the games
would be met by redistribution of the good causes income. Even
if an adjustment in favour of the Olympics is not necessary, the
government has indicated that the proportions allocated to each
distributor may be altered, new good causes added, or existing
good causes taken away. We are concerned that this may lead to
a further erosion of additionality, as well as a possibility that
heritage may cease to benefit from the Lottery. We urge the Committee
to maintain a "watching brief" in this area.
January 2004
24 Source: Focus on cultural diversity: arts in
England-attendance, participation and attitudes, commissioned
by Arts Council England, in partnership with Resource, and the
UK Film Council from the Office for National Statistics (ONS),
December 2003. Back
25
Arts in England: attendance, participation and attitudes,
Arts Council, 2002 (commissioned from the Office of National
Statistics). Back
26
Survey by the Group for Larger Local Authority Museums, 1999,
cited in Renaissance in the Regions: a new vision for England's
museums, Resource, 2001, p 98. Back
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