House of Commons - Culture, Media and Sport

Select Committee on Culture, Media and Sport Minutes of Evidence

Memorandum submitted by Sport England

REFORM OF THE NATIONAL LOTTERY

INTRODUCTION AND EXECUTIVE SUMMARY

1. Sport England's vision is clear—to make England the most active and successful sporting nation in the world. This is a vision shared by all of sport. It is a vision that can only be achieved with continuing funding provided through the National Lottery.

2. Sport makes a major contribution to society in policy areas such as health, education, quality of life, tackling crime and social inclusion. It inspires people continually to challenge themselves to achieve personal bests, both in sport and in other areas of their lives.

3. Game Plan[5], published in December 2002, sets the Government's forward agenda for sport—to increase and widen the base of participation in sport and to achieve success on the international stage. As the Agency with the strategic lead for sport in this country Sport England has a key role to play in delivering this agenda, and in particular the achievement of the two key targets:


". . . Increasing significantly levels of sport and physical activity with the target of achieving 70% of the population as reasonably active—defined as participating in 30 minutes of moderate exercise five times a week—by 2020".	". . . British and English teams and individuals to sustain rankings within the top five, particularly in more popular sports".

4. These challenges cannot be met through Lottery funding alone. For example, we have estimated that £550 million is needed over the next five years to bring the condition of the £4.5 billion stock of local authority owned sports centres to a good and acceptable standard[6]. But they will not be met without the continued support that Lottery funding provides. We welcome, therefore, the commitment in the Decision Document that sport will remain a Lottery good cause. This will allow us to develop our strategy and operations through to meet the challenges of staging a successful Olympic and Paralympic Games in 2012, and achieving the Game Plan targets for 2020.

5. In the last 12 months we have radically revised our strategic focus and operating model to create the conditions for success:

— New vision for sport: making England an active and successful sporting nation.

— New role for Sport England: strategic lead for sport in England.

— New focus on the customer in setting priorities for action.

— New, streamlined application and funding process.

— New, more efficient Sport England, cutting bureaucracy and saving £40 million for direct investment in sport over the next five years.

Total investment in sport

6. The challenges we face are significant. But there are good foundations in place. Lottery investment has already made an indispensable contribution to sport in England. Since its introduction, Sport England has awarded over £1.9 billion to a range of sports projects across the country, projects which would not have progressed without lottery support. These projects have helped to transform the sporting landscape, improving the quality of life for individuals and communities.

Figure 1—Sport England Lottery Investment


Total investment	£1,943,759,044
Partnership investment	£1,389,603,779
Number of counties	All
Number of sports covered	67

*In addition to this funding, there have been 18,255 Awards for All grants targeting sport, totalling £65,064,778

7. This £1.9 billion investment has helped generate a further £1.4 billion of partnership funding—a 71% addition which may have been lost to sport without the stimulus of the Lottery investment. And this partnership funding does not take into account the longer-term investment commitment from partners in running and maintaining facilities and activities.

A balanced fund

8. Increasingly, we have taken a strategic approach to the allocation of Lottery funding. We have balanced funding for community sport with funding for elite sport; we have achieved a national spread combined with targeting funding at need; and we have provided funding that supports smaller, local projects often run by new or inexperienced groups, alongside funding for larger projects frequently delivered by long-standing agencies.

Community and Elite Sport

Figure 2—Community and World Class funding totals


Funding stream	Total number of grants	Total amount awarded

Community*	4,209	£1,707,325,376
World Class	551	£236,433,668

*In addition to this funding, there have been 18,255 Awards for All grants targeting sport, totalling £65,064,778

9. Since the introduction of the Sport England Lottery Fund, we have allocated over 85% of funding to community projects.


Woolfardisworthy Sports and Community Hall in Devon was awarded £885,706 (83% of the total cost). The hall is the focus of the local community, providing a base for a range of sporting opportunities and essential community services. There has been a 690% increase in usage for sporting activities since the hall has been completed, with the largest growth being in the engagement of young people in activities. Where previously there was no structured junior football, junior membership now stands at 70 in a village of less than 1,000 inhabitants, and the number of qualified coaches has increased from two to seven. Where previously there was no tennis on offer, there are now 30 adults, 20 juniors and one qualified coach. Taster sports have also been introduced in basketball, badminton, table tennis and tag rugby. Significantly, the facility has been developed on environmentally sound principles where the running costs are a quarter of the costs categorised as good by BRE. This saving is reflected in lower user charges that assist participation rates.	The Sydney Olympics were the highly successful culmination of four years' investment in World Class Performance Plans. With a team dominated by English athletes, Great Britain brought home 28 medals—including 11 golds—across a broad range of sports, the best gold medal haul for 80 years. The Paralympics at Sydney saw Great Britain's best ever showing, second in the medal table behind hosts Australia. This success continued at the Manchester 2002 Commonwealth Games, where Team England surpassed expectation with a final medal tally of 54 Gold out of a total of 165. This represents an increase of 18 Gold and 29 medals in total compared to Kuala Lumpur in 1998, and reduced the Gold medal gap between Australia and England from 44 to 28. In addition to those athletes who had benefited from Sport England's and UK Sport's main elite funding programmes, Sport England provided additional lottery funding of £3.5 million that was specifically targeted at individual sports and athletes for the Commonwealth Games. This funding contributed to 19 of the Gold medal performances and 57 of the overall medals won.

10. We will continue to allocate our funding to deliver against both the Community and Elite objectives for Sport. We are developing a strategic funding route to help people to start, stay and succeed in sport at every level.

National spread and targeting need

11. We have sought to achieve a geographic spread, but with a clear focus on addressing need and inequity in access to, and participation in, sport.

Figure 3a—All Community Funding by region


Region*	Total grants	Award Amount	% regional award compared to total	% regional share of total population
		£	%	%

East Midlands	407	121,568,979	9.0	8.5
Eastern	494	124,933,171	9.3	11.0
London	336	181,566,981	13.5	14.6
North East	202	96,982,751	7.2	5.1
North West	537	170,191,604	12.6	13.7
South East	769	222,559,381	16.5	16.3
South West	625	175,250,852	13.0	10.0
West Midlands	354	106,933,033	7.9	10.7
Yorkshire	436	147,449,117	10.9	10.1
Total regional	4,160	1,347,435,869

*In addition to these awards there have been 19 Multi-Regional awards totalling £17,413,310 and 30 National awards totalling £342,476,197

Figure 3b—Community Capital Funding within Priority Areas


Region	No. of awards within PAI Areas	Total Award within PAI Areas	PAI as % of total award
		£	%

East Midlands	49	21,390,047	17.6
Eastern	32	26,442,939	21.2
London	65	92,459,707	50.9
North East	55	52,442,886	54.1
North West	116	58,725,656	34.5
South East	56	22,609,483	10.2
South West	115	44,595,273	25.4
West Midlands	55	29,594,883	27.7
Yorkshire	91	42,247,532	28.7
Total	634	390,508,406	29.0

12. Figure 3a show the allocation of funding for Community sport by region. Figure 3b shows the funding that has been allocated specifically to support facility development (Community Capital) and the proportion of that funding in each region that has been targeted at the Priority Areas Initiative (PAI)—the 20% most deprived wards in the country.


Community Futures Fund Cornwall, received Sport Action Zone magnet funding of £50k, a 12% contribution to a total funding pot in partnership with Objective one partnership for Cornwall, Cornwall County Council, Job Centre plus, and the Voluntary Sector forum. The Futures Fund provides small grants to assist in the development of skills for employment. Sport is recognised as being important in developing self-confidence, personal skills and teamwork, skills that are top of the shopping list for employers. Gwellheans Fitter Futures project utilises sport to provide drug and alcohol abusers with an alternative way to channel their energy. It is a small project targeting 20 people, providing gym and outdoor opportunities. Initial evaluation indicates that this project is making adifference, generating sustained gym usage, development of personal skills, and confidence.	Cleveland Riding School for the Disabled received an award for £1.4 million to provide a purpose built riding centre for the disabled. This projects provides more than just riding opportunities for the disabled: NVQs are offered in equestrian and life skill areas, the programme provides a social outlet, and there is interaction with the many volunteers who assist in running the programme. The centre sees a role for able-bodied riders in the activities it provides but nevertheless, of the 17,000 annual rides at the centre, over 15,500 are taken by riders with disabilities. One innovative and environmentally friendly feature is the reed bed effluent ponds that have been developed that have assisted in the re-introduction of local wildlife.

13. We will continue with, and strengthen, this approach to our distribution of Sport England Lottery funds for community sport. We are delegating the majority of our funding for community sport to Regional Sports Boards. Funding will be allocated on a formula that reflects both the population of the region and the incidence of social deprivation. Regional Sports Boards will be charged with using the funding to achieve the strategic outcomes we have identified. The Boards will develop regional plans and regional priorities through consultation and continuing engagement with the local communities in their area, and the local and regional partners, and collectively will identify what projects are best placed to achieve these priorities.

Size of awards

14. The ability to support a wide range of projects, of varying size and scope, is a key feature of the Lottery. At the lower end of the scale relatively small awards can deliver benefits at a local level, including attracting groups with little or no experience of developing projects and applying for grants, and encouraging those groups to develop and enhance their capability. At the other end of the continuum, the Lottery provides the crucial mechanism for supporting major transformational projects with the ability to effect fundamental and sustainable regeneration of communities.

Table 4—Community Funding by award size


Award size	Grants	Total award	% of grants in each category	% of award amount in each category
		£	%	%

<£5,001 *	175	655,453	4.2	0.0
£5,001-£10,000	397	3,019,874	9.4	0.2
£10,001-£250,000	2,575	177,096,426	61.2	10.4
£250,001-£1 million	731	350,831,537	17.4	20.5
£1,000,001-£10 million	316	755,799,162	7.5	44.3
>£10 million	15	419,922,924	0.4	24.6
Total Awards	4,209	1,707,325,376

* Excludes the 18,255 Awards for All grants that targeted sport totalling £65,064,778


The Manchester 2002 Commonwealth Games, which relied on Sport England Lottery funding of £165 million was the catalyst for the regeneration of East Manchester: 6,500 jobs and £36 million of inward investment into Manchester. Sportcity, the main venue for the Games, resulted in the regeneration of a 150 acre site, the provision of new public transport links, and the creation of neighbourhood facilities.	Debenham Village Skateboard park in Cambridgeshire was awarded £15,000—60% of the total cost. This project negated the need for a local by-law to ban skateboarding in the local streets. The project was designed primarily by the young people who use the park, engendering a sense of ownership. Vandalism is not an issue and the users effectively self-manage the site, developing skills that they may not otherwise have done. A local youth offending centre also assesses the site and staff believe that behaviour of their charges has improved.

15. We believe the Lottery should retain the capacity to support this range of projects. One size does not fit all. However, we do have concerns about the proposal to introduce a micro-grants programme, reducing the lower limit on Lottery awards below £500. There is a danger that a lottery funded micro-grants scheme might simply become a substitute for other existing small award schemes. We also would not wish the allocation of funding to micro-grants to undermine our ability to fund larger, sustainable projects providing long-term benefits.

Impact of investment in facilities

16. This range and scale of investment—£1.9 billion, attracting further partnership investment of £1.4 billion, much of which may never have stayed in, or found its way into, sport without the Lottery support—has maintained and developed the sporting infrastructure in England. Independent monitoring and evaluation of 1,753 Lottery funded facilities shows that this investment has generated significant increases in usage.

Figure 5—Summary of impact of monitored Community Capital schemes


Category of User	Usage before	Usage after	Increase	% Increase

All	12,601,193	30,636,316	18,035,123	143.1
Schemes in PAI areas	2,238,446	6,086,711	3,848,265	171.9
Female	1,980,807	6,211,759	4,230,952	213.6
Female U18	490,290	1,961,089	1,470,799	300.0
Male U18	730,407	2,886,285	2,155,878	295.2
Elite	10,377	84,414	74,037	713.5
Disabled	46,275	311,492	265,217	573.1
Ethnic Minority	317,774	586,741	268,967	84.6
Number of coaches	4,934	10,596	5,662	114.8
Coaching Hours	9,860	18,058	8,198	83.1
Coach Hours U18	9,874	19,454	9,580	97.0

LOOKING AHEAD—THE PRIORITIES FOR LOTTERY INVESTMENT IN SPORT

17. Whilst this investment has delivered major and vital benefits to sport, and contributed to the achievement of wider social outcomes, sport can achieve more. We have reviewed our strategic objectives, and identified clear priorities for future investment to ensure it has the greatest impact it can in those areas most vital to the well-being of the nation, and to the achievement of success in the international arena. We have also radically revised our operational model, including our Lottery distribution operations, to ensure that Sport England supports delivery of those outcomes in the most efficient and effective way.

18. The catalyst for this re-focus has been the Game Plan report, combined with our own research into current levels of participation and performance, and the forces that are likely to impact on them over the next 20 years.

Increasing participation; reducing inequalities; improving health

19. The latest available research indicates that 30.4% of people are physically active, meeting the Government's target of five times a week for 30 minutes of moderate intensity—the intensity and duration at which activity derives a health benefit. Two-thirds achieve this through the nature of their occupation. Of the remainder, 22% achieve the target through sport, 36% through walking, and 42% through housework, DIY and gardening.

Figure 6—Physical Activity Contributions

* Work hours from International Labour Office (40.2hrs/wk @1998)

Source: Health Survey for England 1998

20. However, there are significant inequalities in participation in sport and active recreation. Women participate 14% less than men; Black and Ethnic minorities participate 3% less than the average; people on low incomes (C2DE) participate 8% less than ABC1; and people with disabilities participate substantially less than able-bodied people.

21. Further, over the last 20 years obesity rates have tripled and are forecast to continue increasing. One adult in five is clinically obese, and more than half are overweight. Sedentary lifestyles and inactivity are resulting in poor health, and increasing health care costs. Sport can, and must, do more to address these problems.

Figure 7—Trend in obesity amongst men and women (BMI>30)

International performance in elite sport

22. At the elite end of the continuum, Game Plan identified that, based on research carried out by UK Sport, the United Kingdom ranked 3rd in the World across 60 main sports; and 10th in the world against the 10 sports that are most important to the UK public. The Lottery investment in elite sport, both through National Governing Bodies and through the English Institute of Sport has helped secure significant successes, as evidenced by both the performance of GB teams at the Sydney Olympics and Paralympics, and by Team England at the Commonwealth Games in Manchester. But elite sport is becoming increasingly competitive, and investment needs to be more robustly targeted if we are to maintain current rankings, let alone improve them.

Developing a balanced strategy for prioritising Lottery investment in sport

23. In order to achieve the twin targets of increasing participation and improving our international standing in elite sport, we are building a balanced strategy for sport, with a simple focus.

Making England Active

Start:

Increase participation in sport in order to improve the health of the nation, with a focus on priority groups.

Stay:

Retain people in sport and active recreation through an effective network of clubs, sports facilities, coaches, volunteers and competitive opportunities.

Making England Successful

Succeed:

Making sporting success happen at the highest level.

Making Sport England Effective

Internal efficiency:

Ensure that we operate and allocate our resources with maximum effectiveness.

Customer-led planning and delivery

23. We have always placed priority on listening to, and acting on, the views and comments of customers and partners. In a Local Government Association (LGA) in 2003, local authorities voted Sport England 3rd overall when asked to identify the organisations with which they had the strongest relationship—with 70% reporting the relationship to be good or excellent, making Sport England the top ranked Lottery Distributor. We run an annual customer satisfaction survey, benchmarking our performance and identifying the areas that customers see as most important to them, and using this as a basis for reviewing and improving our service. We have run a series of stakeholder focus groups to improve our funding process. We used the analysis of nearly 1,200 different comments to provide a strong basis to develop our new approach to managing awards.

24. Over the last year we have sought the widest possible input into the development of our new strategy. We have worked with a network of independent research experts. We have run an extensive series of interactive seminars with over 1,500 leaders of community and elite sport, and partners in health, education, regeneration, community development and local government. Using the outcomes of this work, we are leading the development of a robust national Framework, with a small number of priorities for action sustainable over the long term, and a focus on local innovation.

25. The national Framework is taking shape. In 2004, there will be plans in place with 20 priority sports and with nine Regions—a bottom up approach to planning for sport based on the needs of sport and of local communities across the country.

Setting challenging targets

26. We will be setting a target to achieve, on average, a 1% growth in participation annually, with the objective of achieving 50% of the population playing sport three times a week, for 30 minutes of moderate intensity, as sport's contribution to the achievement of the Government's physical activity targets by 2020. A "run rate" of 1% per year mirrors the best in the world over the past two decades, based upon recent research, and 50% participation is also the suggested outcome from the regional seminars we held in September and October 2003. We will establish targets for reducing inequality in participation amongst priority groups. And each priority sport will be developing targets for world rankings and performance in sport, to achieve the vision for England to be the best sporting nation in the world.

SPORT ENGLAND LOTTERY DISTRIBUTION—FOCUS ON PRIORITISATION AND EFFICIENCY

27. In order to achieve this challenge, we have radically revised our operating model, including our Lottery distribution function, with a concentration on prioritisation and efficiency:

Clear focus on being active and successful

Moving decision-making closer to the point of delivery, and establishing closer and more direct relationships with customers and partners

Increased focus on innovation and delivery.

A streamlined, clearer route into Lottery funding.

A streamlined, more efficient and more effective Sport England.

28. The majority of the changes we have made, or are in the process of making, in developing our strategy and processes for Lottery distribution were set in progress before the publication of the Decision Document, but are in line with, or anticipated, the approach set out within it.

29. We have played a lead role, and will continue to do so, in the cross-distributor forums and projects that have been set up to develop options and recommendations for making improvements in areas such as involving the public more in priority setting and decision-making; developing common practices and standards for pre-application support and other functions; and more effective ways of supporting and managing projects seeking funding from more than one distributor. We will also continue to play a full role on the National Lottery Promotion Unit, identifying ways to promote the role the Lottery plays in supporting the Good Causes.

30. There are two specific issues on which we would wish to make comment.

The merger of the New Opportunities Fund and the Community Fund: maintaining sector specific expertise

31. We have no substantial comments on the principle of establishing a new Lottery distributor, through the merger of the Community Fund and the New Opportunity Fund. We agree that there is merit in the new Distributor taking on a role to lead, in collaboration with other Distributors, development of improvements that can be made to a number of areas of Lottery distribution process and in some cases managing particular functions.

32. We have strong concerns about giving the new distributor a formal role to manage all major cross-cutting capital and/or transformational projects, particularly where the new distributor is not a funder, or is the minor funder. Distributors should always be seeking to identify ways in which they, and the partners and applicants they work with to deliver major capital projects, can improve the planning and delivery of those projects. A key element of this will be sharing experience and expertise with other distributors (and indeed with other parties who are not Lottery Distributors). There is scope for this to be done in a more structured way and there is some logic in suggesting that the new distributor might be the suitable "home" for a centre of excellence, advice and shared expertise.

33. However, it is difficult to see what, if any, benefit will accrue to any project and applicant from the new distributor taking on the lead role. Expertise and efficiency go hand in hand. We believe that our expertise and our close working relationship with sport mean that we can be more efficient and effective in the distribution of funding, and securing matched funds, for sport.

34. With the exception of any expertise and experience it will inherit through the Millennium Commission, the new distributor will have a very limited track record in delivering major capital projects. And it will be some time before it is likely to have developed any such experience and expertise. More fundamentally, major capital and transformational projects require specific and direct expertise relevant to the main sector or sectors in which they are located. This is clear from our experience in supporting projects such as the Manchester Commonwealth Games, including the development of Sport City and the Manchester Aquatics centre, and a range of other major projects such as the Nottingham Ice Rink.

35. We believe that it would be more appropriate to establish a protocol that ensures that applicants have a clear and single route into the appropriate lead distributor, who will be responsible for co-ordinating all decision-making, information requests, provision of advice and guidance, and supporting and monitoring delivery.

2012 Olympic and Paralympic Bid

36. Sport England is totally committed to efforts to win the Olympic and Paralympic Games for Great Britain in 2012, and to making those games an outstanding success, with a legacy that will last long after the final medal is won. The Commonwealth Games in Manchester clearly demonstrated the enormous impact that staging a major event can have, at a national, regional and individual level. This impact extends far beyond the confines of sport.

37. We are supportive of the development of new Lottery Olympic games, which will help to fund a first class Olympic event. Nonetheless, we are concerned about the potential impact that the proposals for funding the Games could have on Sport England's wider remit. Sport England has directly earmarked some £158 million of its lottery resources for bid and games preparation between 2004-05 and 2008-09—including £40 million towards the development of a multi-sport centre in East London that will incorporate the Olympic aquatics facilities. Our current planning is based on a five-year financial plan through to 2009, and our plans have yet to be developed beyond that point. We would envisage developing a strategic and financial framework through to a potential London Olympics in 2012, and working towards achieving the targets for 2020.

38. We have further estimated the impact on Sport England's revenue in terms of redirected ticket sales arising from the introduction of new lottery Olympic games to be £56.6 million over the same period, based on the latest assumptions provided by the DCMS. In effect, this would bring our true total funding contribution to £214.45 million. (We are also developing planning scenarios assuming higher and lower redirection of ticket sales arising from the introduction of the new games). The Horserace Betting and Olympic Lottery Bill also establishes the option for a further call to be made against good cause proceeds, should additional funding be required, through reductions to the existing Lottery Distributors' shares of the Good Causes fund.

39. The existing estimated contribution from Sport England already places significant pressures on our ability to achieve the participation and success targets we have set ourselves, in line with Government objectives in Game Plan, taken in conjunction with the reduction in Lottery income we have experienced since 1997-98. The table below shows that, since that high point, real terms Lottery funding for allocation by Sport England will have fallen by 63% over 11 years through to March 2009.

Figure 8 - Sport England share of Lottery Receipts 1995/96 to 2008/09 - at 1994 Prices

40. Further reductions pre and/or post 2009 would deprive sport in general (and both the Regional Sports Boards and the National Governing bodies in particular) of the critical financial support needed to sustain improvements in participation and achievement both in the run up to 2012 and in the period thereafter.

5 "Game Plan: a strategy for delivering Government's sport and physical activity objectives" A joint DCMS/Strategy Unit Report, December 2002. Back

6 "Condition and refurbishment of public sector sports facilities". Report commissioned from Davis Landon Consultancy, January 2003. Back



© Parliamentary copyright 2004	Prepared 25 March 2004