20. Memorandum submitted by
The Millennium Commission
THE NEW
DISTRIBUTOR AND
THE MILLENNIUM
COMMISSION'S
POWER
The Millennium Commission was established by
the National Lottery Etc Act 1993 to mark the year 2000 and the
beginning of the third millennium. In order to do this, the Commission
received and disbursed one fifth of the proceeds of the National
Lottery. However, unlike other Distributors, the Commission was
always intended to have a limited life-span. In August 2001 the
Commission ceased receiving a share of the proceeds of the National
Lottery.
The Commission continues to disburse existing
grants to see its portfolio of projects through to completion.
The Commission expects to have completed its grant giving functions
by 2006. After that date our only duties will be in post completion
monitoring which we are charged with carrying out for approximately
80 years. On a value for money basis it would make sense to pass
this duty to another Lottery body on completion of the grant giving
function, and it is anticipated that the Millennium Commission
will therefore be wound up at that point. This will require Primary
Legislation.
In our response to the Government's consultation
document on the future of the Lottery we made a case for ensuring
that reform of the Lottery distribution process preserved the
powers under which the Millennium Commission has operated. In
establishing a body to mark the millennium, Parliament gave the
Commission the widest remit of all the Lottery bodies, ie it could
fund any theme and any type of organisation which it considered
appropriate. This broad remit probably underlies the fact that
it has been the most oversubscribed fund (the capital programme
received about 10 times as many applications as could be funded).
We have also been able to lever in more partnership funding than
any other Lottery body. We have given grant totalling £1,300
million to capital projects but others have also invested more
than £1,700 million. There is good evidence, from independent
studies, that these projects have had significant economic and
social impacts—from the community benefits of village halls
to the catalytic effects of major urban regeneration schemes.
The Commission's funding of smaller community
projects has, in part, been taken forward by other Distributors
but there was no distributor whose remit was as suited to large
capital projects. We were therefore glad to see that the Government
has decided that the new Distributor should include in its remit
a "programme of transformation grants which will go to funding
big transformational projects of national significance, similar
to some of those funded by the Millennium Commission". In
order to support the development of such a programme we are working
with the Lottery Forum working group which is exploring how such
a grant programme might be run.
We also commented that the Millennium Commission
has been a good partner for other public sector bodies, such as
Regional Development Agencies and Government Offices, because
of its wide remit and the skills it has developed. Whilst it is
perhaps inevitable that some of the skills that have been gained
will be lost as the Commission disengages from funding work we
urged the Government to consider whether its structural and cultural
strengths should be preserved. We were glad therefore to see the
Government's recognition that "the Millennium Commission
has done some outstanding work" and that "it would also
be highly desirable to ensure that the knowledge gained by the
Millennium Commission . . . becomes part of the collective consciousness
of the Lottery distributors once the Commission is dissolved".
It goes on to hope that the new Distributor
"will take on the Millennium Commission's mantle in terms
of vision and innovation" and "enshrine some of the
innovative and visionary aspects of the Millennium Commission
within the new Lottery landscape". This statement reflects
a conclusion of the CMS Committee in 2000 when it said "We
consider the sharing of best practice to have been beneficial
both to the capital projects and to the Millennium Commission.
We recommend that the Government consider ways to ensure that
the increased expertise in project management that has resulted
is not dissipated when the Millennium Commission concludes its
work."
In order to help with the transfer of knowledge
and skills we are examining the feasibility and cost-effectiveness
of co-locating Millennium Commission staff with the new Distributor.
DOES THE
EXISTING PATTERN
OF LOTTERY
AWARDS REPRESENT
A FAIR
AND EQUITABLE
INVESTMENT IN
THE QUALITY
OF LIFE
ACROSS THE
UK; ACROSS SOCIETY?
The Commission has always shared the commonly
held aspiration to achieve a fair spread of Lottery funding across
the country. However a fair spread does not necessarily mean an
equal spread. The Lottery depends on applications and while the
Commission took initiatives (especially later in its life when
it received legal powers to solicit) to encourage applications
from areas or communities which had not been very successful,
we always made it clear that quality of applications would be
afforded primacy in deciding who should be awarded a grant. This
quality-led approach was partly a product of the Commission's
remit. The Commission was tasked with selecting projects from
across the UK which were appropriate to mark the Millennium. The
outstanding applications, wherever they came from, were most likely
to strike the Commissioners as appropriate for support—and
given the high level of over-subscription, there were a significant
number of high-quality applications from which to choose.
Looking back now we can see that in terms of
grant per head the Commission achieved a more or less even spread
on Millennium Awards for individuals (32,000 grants of round £3,000)
and the Millennium Festival (celebratory events in the year 2000)
but there is an uneven spread on capital projects.
CAPITAL GRANTS
|
| Region | Grant per Head
| % of applications
by value which
were supported
|
|
| Northern Ireland | £50.16
| 8% |
| Wales | £43.67
| 23% |
| Scotland | £39.68
| 14% |
| Yorkshire & Humberside | £28.55
| 31% |
| North East | £25.72
| 11% |
| South West | £23.49
| 13% |
| Greater London | £22.18
| 9% |
| West Midlands | £16.35
| 16% |
| East Midlands | £16.20
| 12% |
| South East | £14.68
| 9% |
| North West | £13.16
| 15% |
| East | £9.68
| 19% |
|
| Average | | 13%
|
|
Northern Ireland has done best at £50 per head of population
whilst the East of England has done worst at £10. However
in terms of the proportion by value of their applications which
were successful, the East of England was more successful than
Northern Ireland. In the East of England 19% of applications by
value were supported as opposed to 8% in Northern Ireland. The
picture is not straightforward, but one of the reasons why some
regions were successful was because they made a lot of high quality
applications.
This of course begs the questions why some areas do not make
so many high quality applications and the reasons are complex.
It may be simply that the public demand for assistance from the
Lottery was not equally high in all regions, although this is
unlikely. More problematically, it may be that some communities
had greater difficulty in applying for Lottery funds. In the case
of the Millennium Commission a factor which was also relevant
was that its partnership funding requirements for capital projects
were high (50%) and some regions have more access to European
and national structural funding which could provide significant
co-funding. The inability to access co-funding might therefore
have discouraged potential applicants—although the 50% figure
is not as daunting as may appear at first because co-funding did
not have to be in the form of monetary contributions, and could
come from a variety of sources It is probable that where co-funding
was an issue, it was not that the co-funding could not be raised
by potential applicants, but rather that they did not know how
to go about raising it. In aggregate terms the Commission funded
43% of the total value of its capital programme, ie £1,300
million out of £3,000 million.
Taking this point further, it may be that some parts of the
UK had better developed mechanisms for bidding for funds, for
example Wales, Northern Ireland and Scotland had established bodies
such as the Welsh, Northern Ireland and Scottish Offices.
If the Commission had ring-fenced funds for geographical
areas it could have led to the qualitative standard of the projects
supported in regions with a low level of applications being inferior
to that in regions which produced more high quality applications.
Undoubtedly capacity building such as that carried out by the
Community Fund helped less well resourced communities put together
better applications over time. However, given the time limited
life of the Commission's funding it was a difficult issue for
the Commission to address. We agree that efforts must be made
to reduce inequality of opportunity but there remains a case that
the Lottery should be a challenge fund so that the best projects
are supported wherever they are located.
The Commission recognised that achieving a fair spread meant
more than aiming at geographical equity. Of the 172 projects supported
in the first three rounds of capital funding only four directly
originated from ethnic minority communities:
Whilst it is true that projects such Tate Modern and Eden
cater for everyone, the Commission felt that celebrating the Millennium
in a way that did not specifically recognise the achievements
and aspiration of ethnic minority communities was an opportunity
missed. The UK's population has been ethnically and culturally
diverse for hundreds of years—and it has been a source of
strength and, perhaps more importantly it is a strength now and
will be in the future. Therefore the Commission decided that it
wanted to see more such projects.
The Commission addressed why it had not been able to support
such projects in the past. Simply repeating what we had done in
the past might not have delivered what we wanted to see. Up until
1998 we had only been able to issue general invitations to apply
for grant. In 1998 we were given new powers to solicit applications.
Whilst this did not guarantee a grant to everyone who applied,
it gave communities more confidence to apply if they could meet
the strategic aims which we set, and gave the Commission the ability
to closely tailor funding rounds to meet those strategic aims.
Therefore we ran two funding rounds aimed at supporting more
projects from ethnic minority Communities, the first concentrating
on the UK's Afro-Caribbean community, which had been particularly
under represented in the Commission's portfolio, and the second
more widely to reflect the achievements and aspirations of ethnic
minority communities in the UK.
We were also aware that one of the reasons why ethnic minority
communities did not bring forward strong applications was that
they did not always have access to the resources needed to develop
the comprehensive documentation required to win large grants.
We knew that this was a structural problem and that assistance
in this area would have impacts beyond the application to the
Commission. It would help to build capacity in these communities.
Therefore we reversed our policy on feasibility/development grants.
Once grants were made we also funded people to work with the grant
recipients to help them develop their projects.
As a result of these two rounds we have funded 17 new projects.
This takes the total of ethnic minority led projects to 21 out
of the 200 we have supported.
One of the reasons why some regions and groups do not fare
well is a lack of capacity. Responses from those consulted by
the Commission show that capacity building is very important both
before and after award of grant. It is important to build capacity,
and whilst it is right that Government should focus on "cold"
spots, the difficulty is that these "cold" spots are
likely to have the people least able to apply for and deliver
projects, and afterwards to run them. This is because they are
often inexperienced in organising themselves, in accessing public
funds, and in project management. Therefore, an effective package
needs to do more than just encourage interest and applications.
It would need to extend to helping people to get started, how
to manage projects, secure co-funding and build revenue capacity
and run live projects.
Without addressing issues of capacity there is a danger that
Lottery funding will simply overlay the varying contours of existing
provision and wealth. However given the depth and the complexity
of problems surrounding lack of capacity, whilst able to make
a contribution, it is far beyond the resources of the Lottery
to resolve the situation, if not to make a contribution to easing
the situation. The bodies with a longer life, such as the Community
Fund and the New Distributor, are in better position to deal with
any inequality of opportunity.
The Commission's Millennium Awards Scheme, which gives grants
to individuals, is channelled through Award Partner organisations,
usually at a local level. Several Award Partners highlighted the
value of having local advice and support, particularly for individuals
applying for funds. The thought that this should be flexible was
also raised; that it should "kick-in" for groups from
ethnic minority sectors, for example, when they need it, rather
than being a general service. This also lessens the risk that
projects won't have the support needed to survive in the long-run.
JOINT WORKING
In the eyes of many people the Lottery is a single source
of support for good causes. However in reality it is dispensed
by a number of organisations with differing priorities and procedures.
Given that the Government has not decided to create a single Distributor,
this situation will continue. For some organisations the fact
that there are a number of Distributors is not generally a problem.
They understand well the respective criteria and may prefer dealing
with a funder with specialist expertise in their sector, for example
museums understand the remit of the Heritage Lottery Fund and
HLF has gained immense experience of work in this sector. The
same might be true of a sports club in relation to the sports
distributors.
However for some applicants, and for some projects, joint
working by Distributors is helpful.
Some applicants for relatively small amounts of grant profess
confusion about to whom they should apply, this is particularly
the case where their project provides a public benefit which covers
the remit of more than one Distributor, eg a village or community
hall which provides for artistic and sporting activities. Distributors
working together in providing a "common front door"
for applications seeking grant up to a certain level is helpful
in this respect, eg a single point of application for village
halls. In these circumstances the Lottery bodies can consider
to which distributor, or combination of distributors, the application
should be directed. The Millennium Commission pioneered this approach
with the Millennium Festival. However it was a relatively low
level of joint working as it involves a application process after
which the Lottery bodies act independently. Where more than one
distributor makes a grant to an applicant the process is complicated
by separate decision making processes, payment mechanisms and
monitoring requirements. A development of this approach is where
Lottery bodies contribute money to a pool from which applications
can be supported and decisions on grants are taken at the level
at which the money is pooled rather than being referred back to
the contributing Distributor. This avoids the complications, and
costs, of the simple common front door model. This is the way
in which "Awards for All" works on grants between £500
and £5,000. It is an efficient and popular way of delivering
relatively small grants
Awards for All is not a Lottery Distributor, although to
applicants it may appear so, and each participating Distributor
remains responsible for the use of the sums they have contributed.
However where applicants receive a grant from more than one Distributor
the difficulties of dealing with multiple distributors is frequently
cited by applicants as a problem. Where each Distributor has their
own monitoring requirements and processes this can place a significant
burden on grant recipients. Distributors can and do take steps
to reduce the burden on applicants. For example they appoint a
joint monitor who evaluates progress on behalf of all of them
as a prelude to releasing grant. However because each Distributor
has its own objectives in making a grant and is accountable for
its use of Lottery money, there is an unavoidable burden in dealing
with more than one Distributor. This could only be fully avoided
if Distributors formally delegated the payment of grant, but not
the decision to make grant, to one Distributor, eg if two or more
Distributors made a grant to an applicant for a project one Distributor
was given responsibility for administering the total grant. However
this would involve Distributors giving up control over precisely
how their money was used. For example if ACE and HLF were both
funding the renovation of a theatre, it would either mean ACE
giving up control over the arts element or HLF giving up control
over how the heritage element was delivered. Under present accountability
arrangements this is difficult. It is possible to delegate the
release of funds to another body. Alternatively, it is possible
to establish a establish a joint scheme (which is in effect what
Awards for All is) which administers its own, jointly funded budget,
but this needs to be done before applications are sought. However,
the delegating distributor retains legal responsibility for the
use of its monies and must be able to account for them.
If these problems could be overcome there would be advantages
to the recipient in dealing with one Distributor. The Government's
Decision Document on the Lottery speaks of building up a centre
of expertise. An arrangement where one Distributor delivered capital
projects on behalf of a number of Distributors would help it build
up such expertise and save each Distributor building up its own
expertise on delivering capital projects. Such an approach would
not work well in all circumstances, for example one the Heritage
Lottery Fund's objectives is the preservation of heritage assets
and they have built up significant expertise in this area. Therefore
where they were engaged in the bring back into use a Victorian
Public Bath there would be little point in passing the work to
another Distributor. However where Heritage was delivering a brand
new museum there might be something to be gained from working
with a distributor who had built up expertise in delivering major
capital projects.
Applicants for larger grants may be less likely to see the
need for a common front door. However where a large project includes
elements which fall within the remit of more than one Distributor,
the ability to make one application might be attractive. For example
where a City Council wishes to undertake a significant regeneration
project it might well involve elements of arts, sports and heritage.
Such a project might be defined as a "Transformational Project"
which the new distributor is charged with delivering. A useful
example of joint working could be where the New Distributor was
the recipient of such an application on behalf of itself and other
Distributors. The Distributors could then decide whether and which
parts of the application they might support. The project could
then be funded as now, ie through each Distributor acting independently
or through the New Distributor, if the other Distributors were
willing to delegate authority to them.
Given the amount of money which is likely to be available
for major transformational projects, this way of Lottery Distributors
pooling some resources and working together might also be the
most practical way of delivering a few large projects each year.
We believe that promotion of the benefits of Lottery funding
by grant recipients would be more effective than a central effort.
A visitor to an art gallery, sports stadium or village hall may
gain an immediate and powerful impression of the benefits of Lottery
funding provided they are made aware of the role the Lottery has
played in creating the building.
However there is a tendency for grant recipients to regard
Lottery money as "Government" money and not something
for which they have to give acknowledgement. By contrast commercial
sponsors place heavy responsibilities on grant recipients to acknowledge
the source of funds. The Lottery bodies find it difficult to place
such onerous demands on applicants, because of the cost to the
recipients and the cost to Distributors of enforcing such agreements,
but more requirements should be placed on grant recipients, certainly
large ones, to publicise the source of funding for their projects.
There should be a sharing of best practice amongst Distributors
on this area and perhaps a general raising of standards in this
area.
MICRO GRANTS
The Commission's Millennium Award Scheme already gives out
what may be described as "micro grants" to individuals,
and it has proved both successful and popular. There is a general
feeling that such grants can make a great difference, if targeted
correctly. They can, however, involve significant calls on a distributor
body's management resources because whilst the sums involved are
low, they are often reaching individuals who have never accessed
public funds before and need help and support to manage and account
for them.
The Millennium Awards Scheme is administered through Award
Partners, organisations who have experience of working in their
local area of with targeted groups of individuals. This localised
administration is where micro grants can succeed. The Commission
retains its decisions making powers, but allowing established
organisations to work with individuals has enabled the specialist
advice and knowledge to be readily available to applicants. We
believe there is a strong argument for encouraging other Lottery
Distributors to apply their funds in this way.
LOTTERY DISTRIBUTORS
AS INVESTORS
Supporting projects to help them succeed is welcomed. The
Commission offered development funding to some applications in
its 5th capital projects funding round to enable the applications
to be developed to a point where the Commission could offer grant.
The Commission did this because it was recognised that investment
would be needed for these projects. Clearly this would not be
appropriate or necessary for all applications, but would be highly
beneficial to others, and may help open Lottery funds to some
of the areas that have not yet benefited. Although this opens
distributors to potential claims of bias, it would also allow
distributors to be flexible and react to the needs of applicants.
Similarly, help in developing projects throughout their construction
period must be flexible and based on the needs of the project—although
it must be remembered that there are real statutory limits to
the powers of funding bodies, which cannot, as a general rule,
run the projects on a day to day basis themselves. It must already
be the case that there is a discrepancy between the costs of administering
different applications, and distributors would only therefore
be accepting that the differences in costs may be significant.
The increased costs of helping some projects should therefore
be considered as administrative costs.
Ensuring there is one case officer was welcomed by some projects,
who regard changes in case officers as severe setbacks to the
process. Equally important is the need to ensure case officers
are matched to the projects and communities in which they are
working.
ADDITIONALITY
The Government has reaffirmed that Lottery money will not
be used to substitute for Government spending. This is of course
not the same as defining the principle of additionality as the
Lottery only funding things which the Government does not. Both
the Lottery and the Government fund arts and sports and therefore
a definition of additionality which presupposes a complete separation
of purpose is clearly inadequate. The Arts and Sports bodies receive
both direct Government support and Lottery money and in many cases
do not distinguish how it can be used. The Commission believes
that the definition has to go beyond simply ruling out the substitution
of Lottery money for Government funding. This definition is negative,
it says what the Lottery will not do, not what it will do. It
will not suffice for the future and it will not capture the imagination
or the support of the public whose support is important and who
will understandably call for the diversion of Lottery money into
public services if the case for a different use of their Lottery
money cannot be made.
The Commission believes that the concept of additionality
remains a fundamental principle but Lottery bodies must develop
additionality more boldly and ambitiously. If Government were
starting from a blank sheet of paper it might be possible to come
up with a range of definitions of additionality. For example the
Lottery could have been set up to support innovation and risk
taking—projects which would not normally attract public
funding.
There was never a clear "positive" definition of
additionality at the outset and therefore describing the success
of the Lottery in terms of additionality is not easy. There is
a widespread view that the Lottery has been a success and this
must go beyond simply the point that over £10 billion has
been raised for good causes. If this was the only definition of
success it would be a relatively small success insofar as even
£10 billion is a small sum of money in relation to the vast
amount of taxpayers' money and charitable sector money which is
spent on similar purposes. The Millennium Commission believes
there are other ways in which the Lottery has been successful
by going beyond what Government can do. These include:
— The funding process is more responsive to demand.
It has been application driven process and therefore can create
a portfolio of projects driven by people's aspirations—a
bottom up programme rather than one imposed from the top.
— The allocation of funds is less risk-averse. Its
ability to take risks by virtue of it being set aside from normal
Government funding rules, and beyond the direct control of Ministers,
whilst remaining accountable to Parliament.
— The funding programmes are more flexible. Its
flexibility in terms of its remit (this was especially true of
the Millennium Commission) which meant diverse ideas could be
funded. On a related point the fact that the Lottery monies are
not made available on a year by year basis (the problem of annuality),
as Exchequer funds are, has both meant that Lottery bodies can
avoid the "use or lose it" syndrome that sometimes bedevils
public spending, and it has provided much needed flexibility for
applicants.
— The aesthetic and design standards can be higher.
Whilst the Lottery does not fund extravagance, it has been willing
to support excellence in design in the provision of facilities
for public benefit. The Millennium Commission has supported projects
which have won the UK's most prestigious architecture award for
two years running and also a string of other awards. Some Lottery
funded projects might have happened without the Lottery but the
Millennium Commission believes they would not have been of as
high a standard.
— The Lottery has provided public funds to groups
and individuals who had previously found accessing public funds
more difficult. These ranged from charities which lacked popular
appeal to thousands of individual award winners.
Not all lottery grants will live up to these criteria, and
it is important not to overstate the Lottery's added value, but
the Commission believes that its grant programme as a whole reflects
these ambitions. The Millennium Commission believes that this
approach can be built upon. No doubt other distributors could
point to other achievements, to other ways in which the Lottery
adds value. These achievements could form the basis for a positive,
rather than negative definition of additionality which, if communicated
properly, could win popular support. Whilst the above qualities
of the Lottery are assertions, it should be possible to carry
out some research on how the Lottery has worked over the last
10 years to identify the way in which the Lottery has added value.
The Millennium Commission has ensured that independent research
has looked at what has been achieved and no doubt other Distributors
have similar evidence. Indeed we would urge the Government to
continue to monitor all the available research, and commission
new research if necessary, to ensure that what the Lottery does
well is supported by any changes resulting from the review and
those things it does less well are improved.
January 2004
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