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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 196-iii House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE culture, media and sport COMMITTEE
Tuesday 27 January 2004 BARONESS PITKEATHLEY OBE, LADY BRITTAN, MR STEPHEN DUNMORE and MR MIKE WILKINS MR PETER HEWITT and MS PAULINE TAMBLING MR PATRICK CARTER and MR ROGER DRAPER Evidence heard in Public Questions 173 - 272
USE OF THE TRANSCRIPT
Oral Evidence Taken before the Culture, Media and Sport Committee on Tuesday 27 January 2004 Members present Mr Gerald Kaufman, in the Chair Chris Bryant Mr Frank Doran Charles Hendry Michael Fabricant Mr Adrian Flook Alan Keen Rosemary McKenna Derek Wyatt ________________ Memoranda submitted by the New Opportunities Fund and the Community Fund and Awards for All
Examination of Witnesses
Witnesses: Baroness Pitkeathley OBE, a Member of the House of Lords, Chairman, New Opportunity Fund, Lady Brittan CBE, Chairman, Community Fund, Mr Stephen Dunmore, Chief Executive, New Opportunity Fund and Community Fund, and Mr Mike Wilkins, Director, Awards for All, examined.
Chairman: Ladies and gentlemen, I would like to welcome you here this morning at this resumed hearing into the National Lottery and I will call Mr Wyatt. Q173 Derek Wyatt: Thank you, Chairman. Good morning. You may not have seen last week's session or read the evidence, or you may have read the evidence, but those running the People's Lottery and Camelot argued that the changes that are proposed are not sensible and that there will be no bidders other than Camelot for a reformed lottery. Is that your view too? Baroness Pitkeathley: I am not sure we take a view particularly about the operator of the lottery. Since we are the distributors, I am not sure that it would be appropriate for us to comment about that. Q174 Derek Wyatt: If the changes to the lottery go ahead and that reduces the amount of money that is available, you w ill have something to say. Baroness Pitkeathley: Indeed, we would have something to say in those circumstances, and of course possible falling lottery receipts is of concern to us, but the way in which lottery receipts are kept up is the responsibility of the operator not of the distributors. Q175 Derek Wyatt: So you will not make a comment about the changes at all in public. That is not your intention, even if you feel privately that this is not a good thing. Baroness Pitkeathley: I think it probably would not be appropriate for the new distributor, as it would be at that time, to comment. Q176 Derek Wyatt: Are you worried that receipts are down by nearly 50 per cent over the last five years? Has that caused you grief and made your job harder? Baroness Pitkeathley: We never projected at the highest possible receipt for the lottery when we were considering how we made our distribution, so we have not had any particular concerns about commitments that we have made because we have only every projected at a sort of mid point of what the receipts were expected to be. Q177 Derek Wyatt: Would other witnesses like to comment? Lady Brittan: May I add to that. We have certainly seen a decline in our income but we have actually planned for it. That was for historic reasons: the first year's receipts were spent over a period of years. Also, we have cut our balances back, therefore we have less income, but we have merely re-jigged the way that we do things, so we are targeting our money much more closely than we did before, and so I think we have factored it into our forward planning. Q178 Derek Wyatt: With the potential of the Olympic Lottery coming on board even earlier than was anticipated - if the Guardian story was correct at the weekend - do you think that will have a severe impact on what you do? Mr Dunmore: I am not sure the Guardian story was accurate - and you would obviously have to ask the Secretary of State about that - but we are very much aware that the forecast is that the new lottery game will probably lead to a reduction of around five per cent in terms of the funding available to the other distributors and we have already begun to factor that into our planning. Obviously we all hope and would prefer that lottery receipts for the individual distributors - and particularly, in our case, for the new distributor - were as high as possible, but I think our main aim is, within the bounds of whatever money is available, that we should spend it as effectively and efficiently as possible. As far as the Olympic bid goes, the New Opportunities Fund and, of course, subsequently the new distributor, is actually contributing in a very large way to supporting the Olympic bid, in terms of the regional dividend of the bid and the legacy of the bid, because we are putting funding into a PE & Sport programme, as I think you know, across the UK, which is producing new and improved sports facilities in schools, but also, in conjunction with Sport England, an Active England programme which is spending £100 million on multi-use sports facilities, so I think we have an investment in the Olympic bid as well. Q179 Chairman: Could you clarify what you mean by your last sentence. Mr Dunmore: We have an investment in the Olympic bid in the sense that part of the process of the Olympic bid, whether successful or not, would be to raise levels of physical activity across the country, and not only in elite sport but also in grassroots sport. We and, indeed, Sport England and the Government would very much see a legacy of the Olympic bid being that raising of activity across the country, contributing, of course, to better health. Q180 Derek Wyatt: If you had one wish about the lottery, what would it be to improve it? Lady Brittan: I think one thing that is quite clear to all of us is that the general public perhaps are not as fully apprised as they should be of the amazing things that the lottery has done across the country, up and down, through all sorts of areas: arts, sports, heritage, education, charities. I certainly hope that in the future period there would be very much more attention given by all of us - and I think we are all guilty - of making the public really proud of what the lottery does and has achieved. Baroness Pitkeathley: I would very much support that. I do not think the public does know. Almost every community throughout the United Kingdom has some improvement as a result of the lottery. I think people do not really make the connection. They certainly do not make the connection about the different lottery distributors or the connection between buying their ticket on a Saturday night and the improvements to their community, and that would be my wish also. Mr Dunmore: I would certainly agree with that. Arguably there is a virtuous circle between people becoming more aware of the benefits of lottery funding and the projects that are being supported, and at least continuing to buy lottery tickets when otherwise they might have dropped out of the game - and there is some evidence to suggest that is the case. I think the more we can promote the benefits of lottery funding from all the lottery funding bodies, the better. Chairman: Thank you, Derek. Michael Fabricant. Q181 Michael Fabricant: Good morning. Does the new distributor have a name? Do you know who might be running it? Do you have any information about it at all? Baroness Pitkeathley: We spent a great deal of time in our joint committee of both boards yesterday discussing possible names but I am afraid I am not able to tell you about a decision that was reached. Obviously the name of the new lottery is finally a decision for the Secretary of State but it will be arrived at through a very extensive period of consultation, because, following on the points that Lady Brittan and I made just now about people making the connection, we think the name will be very important in that regard. But I am afraid there is no news on it as yet. Q182 Michael Fabricant: So that we can clarify the structure, if you like, of the new distribution agencies, would you confirm, please, that there is going to be the new distributor; one for sports, as we have at the moment; the arts distributor; but also one for the Olympics. Do I have that right? Mr Dunmore: That is right. The one you missed out was heritage, which will continue as well. Q183 Michael Fabricant: And heritage, of course. We must not miss that out - they have given a lot to Lichfield! Do you not think the Olympics distributor should be a sub-section of the sports distributor? Mr Dunmore: I think, again, that is probably not an issue on which we would particularly have a view. I think you are talking to Sport England later on and they may or may not have a view on that. I think it is reasonable to suggest that matters of shares of lottery funding between different distributors, and the way in which the distributors are organised, in terms of which ones should exist and should not exist, are really for the Secretary of State with Parliament. Q184 Michael Fabricant: Ah, a politician! While I can appreciate - and I think it is probably right - that there be some mergers in order to save on the cost of overheads - there is a sort of logic in that - can you understand that there is some concern by some of the other distributors that you may end up having a broader role than currently is envisaged for you? You are nodding, so you are conscious of this. Would you like to say a few words about that and either reassure or maybe not reassure the other distribution companies regarding this? Mr Dunmore: Two or three things on that. First, my own personal view is that there is great value in having a number of different distributors which serve different sectors and serve particular needs, so I think there is a virtue in variety. Secondly, it is often not understood terribly well in the outside world that the distributors do work very closely together. You will know that is one of the issues which is in the decision document as well, that the Secretary of State wants us to improve on what we are doing in that respect. We already work closely together. We have, for example, a joint website and hotline for our customers so that people can come in at one point of entry and see where they might best get their funding and support. There is a lot more work going on through the lottery forum, which is the forum of the UK and England-based distributors, looking at a whole range of things which I think will make lottery funding more accessible, simply by enabling the distributors to work more closely with each other rather than reducing the number of distributors. They are things like looking at a common customer charter, a common complaints procedure; the possibility of a single pre-application form. Q185 Michael Fabricant: Would this be operated by you? Mr Dunmore: No. These are things that the distributors can do collectively and where they can share experience. There are, however - and I think I understand the point you are making - certain areas where the decision document suggests that the new distributor might play a lead role; for example, on transformational projects. Q186 Michael Fabricant: Could you explain what you mean by that? Mr Dunmore: The decision document envisages that the distributor will, to a limited extent, take over the mantle of the Millennium Commission and fund large-scale, cross-cutting capital projects. This would probably be with a budget of around £30 to £40 million a year for that particular strand - although we do not know that yet - and therefore we would only be talking about two or three large projects. But I think there is a potential there - because the other distributors also have a lot of experience, both good and bad, of funding those sorts of projects - of the new distributor working with them to set up some sort of centre of excellence in perhaps a very loose way, to learn lessons from the past, and also to make sure we take a common approach to things like risk management and business planning in terms of large capital projects. Q187 Michael Fabricant: When David Mellor first came up with the idea of the lottery, he brought in this concept of additionality, and additionality meant that Britain would start to have and see the sorts of things that we did in the Victorian era. Earlier on, just before we began this meeting, I was talking about follies, but I did not mean it in a derogatory sense, and you could argue that the giant sundial which is being built is a folly - I think a rather nice folly - and is the sort of thing that should not be coming out of taxpayers' funds but that should come out of lottery money. And that is what additionality is all about. Do you think the principal, though, of additionality has now been eroded, and the sort of thing that was previously paid for by the taxpayer is instead coming out of lottery funds, and, as a consequence, to the detriment of sport, heritage and the other distributors? Baroness Pitkeathley: The concept of additionality I think becomes increasingly complex as you have multiplicities of providers. The line that the New Opportunities Fund has always taken about additionality is that there should be no substitution: no substitution for current or planned government expenditure. That is how we always approach the concept of additionality. But I think it does become difficult to untangle, as you have not only public and private sector providers but also the voluntary sector as a very major provider. I think a more helpful way to look at it is really the concept of added value: What value is it that it comes from lottery money rather than from government spending? For that, I always take a reference from the people who get the money, because they are often very, very strong in saying, "It is quite different to get money for a healthy living centre from you and your contingencies fund than it is to get a Department of Health initiative. It is different in the way it promotes partnership, it is different in the way the local people think about it and most of all, it is difficult in the way that the recipients of the money think about it." Q188 Michael Fabricant: Is that not just a criticism of the way a government agency actually does the job? Baroness Pitkeathley: I think it is also an indication that they do see that there is some added value, that they have more influence over the money, that they have much more incentive to work in partnership and to be innovative in a different way, doing pilots, or to try out or to take more risks than you could with public money. So the concept of added value is one which I think should go along with additionality. Chairman: Could I intervene to say that your answers have been both generous and punctilious but when ministers in the Government (and that is the previous Government and the present Government) have come before us and spoken about additionality, their approach to the definition has been absolutely clear; namely, that the lottery should not be raided to fund projects which if the lottery did not exist would be funded by the government or other public agencies. Q189 Michael Fabricant: Given that - I suppose you dare not say it in case you are thrown off the boards - do you think that the principle, as enunciated by the Chairman and, indeed, by ministers, as he quite rightly says, has been breached? Baroness Pitkeathley: No, I do not think it has been breached. Q190 Michael Fabricant: You do not think, for example, that there would not have been health education centres had the lottery not existed? Baroness Pitkeathley: I think there have been some kind of healthy living centres in various places before the lottery existed. What the New Opportunities Fund did with them - and there are more than 300 of them now, about 350 - is to take that concept and really run with it, to take some risks with it, to do all sorts of innovative things such as virtual healthy living centres or mobile healthy living centres, and I do not think they would have existed in the form, in the successful form, without the contribution of the lottery. Michael Fabricant: I suspect this is a debate that will go on and on, Chairman. Chairman: Adrian Flook. Q191 Mr Flook: Thank you, Chairman. Lady Brittan made the point that people do not make the connection with the work that you all do in giving money to your local communities, but I think that they do, in a way. There is lots of anecdotal evidence that where one of your organisations gives money to something which the Daily Mail picks on, it then has an impact that following week on the amount of money that people are prepared to pay. So there is a connection. Would you care to comment a bit further on that? Lady Brittan: I think much has been made of the connection between what you might call an unpopular grant in certain sections of the press and the takings. I understand from the National Lottery Commission that there is no real evidence of this because there is a fluctuation every week in lottery takings, but I do perfectly appreciate your point about what might represent the perceived populist and unpopular causes. The Community Fund, certainly, throughout its existence has been very careful, in the sense that we have always funded right the way across the spectrum in terms of disadvantage, and we take the view that vulnerable people are vulnerable people whoever they are. I suspect you are referring to a certain grant that received a lot of attention. As a result of that particular grant, we reassessed the bid. We decided to award it. We had a thorough investigation and we put a couple more conditions on it. As a result of it, we also realised that we had not entirely understood some of the downstream effects of reputational risk, so we put into place a number measures to make sure that both our grant making committees and, indeed, our applicants understand some of the guidelines about being doctrinaire or political. Nonetheless, we very much take the view that we are a distributor that funds disadvantage. We very carefully look at all the projects that come in front of us in the voluntary community sector and we are now perhaps a little more aware of some of the potential reputational risks before we give a grant. Mr Dunmore: I entirely agree with what has been said but I would like to add that I think that firstly lottery distributors need to take their individual grant decisions independently - and that is independent from Government and, indeed, independent from, if you like, media opinion, from whichever direction that comes. But I do think there is another side to that coin - and this is an issue which the new distributor I think will want to explore and, indeed, is flagged up in the decision document - about various ways of getting more public involvement and ownership of lottery funding and the way in which we work and the decisions which we take, so that people feel more confident that lottery funding is accessible, that the decision-making processes are transparent and rational, and that there are ways in which they can get involved. There is a number of very good examples of public involvement already. The Community Fund, for example, with its regional decision-making committees has one member elected by lot from the general public. That has been a very successful experiment, and I am sure there are ways in which we can build on that. From another perspective, the New Opportunities Fund, with a lot of our programmes we have made allocations to local geographical areas - the PE & Sport programme is one example, there are other examples through the Fair Share programme - so that communities at a local level within the overall framework of the programme and the financial allocation can then work together and decide what the priorities are for spend within that programme. We can obviously build on those sorts of things and I think there are other things we can explore as well. We can certainly explore the possibility of people expressing preferences about large projects through television programmes. That has been done already and is an interesting development - and all these things need very careful safeguards. We can also explore the possibility with certain programmes and certain decisions of the option of setting up people's panels either to comment on or contribute to the decision on particular grants. So all these things I think need to be looked at carefully. Q192 Mr Flook: Moving on slightly, there is a little charity in my constituency called Helping Hands, which is run by a disabled lady called Pearl Buttel - who does not take any money for what she does, but it is not an amateur organisation. They have applied. They took someone on before applying who ultimately has let them down. They have found themselves thinking that they were very deserving of the money but not getting the money, with a massive cash-flow crisis. Do you come across that a lot? Is it because the system is too complicated to apply, because there are too many safeguards, and deserving charities are finding it difficult to put together very complicated professional documents? Lady Brittan: Obviously I cannot comment at all on your particular case. Q193 Mr Flook: Of course, no. But I use that as an example. Lady Brittan: I think we have tried very hard to make sure that small charities which have no paid staff are encouraged to apply, particularly through our regional structure, so therefore there is a lot of one-to-one advice sessions, how to apply sessions - grant-holders, potential grant-holders, people who have grants - and we try to have as much one-to-one contact as is possible. Of course, if an applicant does not wish to take up that one-to-one, in a sense it is their concern, but, by and large, the bulk of our money has gone to much smaller organisations and we have made particular efforts. But we do understand that it is hard sometimes applying for lottery money, particularly for large sums of money, because the larger the sum of money clearly the more safeguards we have to have in place. At the lower end, up to £60,000 and up to £5,000, we have different schemes, and the accessibility criteria and, indeed, what is asked of the applicant is much less, but the bigger sums of money clearly need to have much more scrutiny and we would expect that. Mr Wilkins: On behalf of the Awards for All programme, which is a manifestation of the way that distributors work together - not a distributor in its own right but a partnership between the distributors - we process in England something like 22,000 to 25,000 applications a year, and the application process is remarkably shorter than those required for a major capital project, for example. We turn round applications rather quicker - a maximum of eight weeks at the moment - and applicants have lots of opportunities through the promotion of the programme at a regional level, through lottery distributors and through lottery offices of local authorities and others, to have assistance in making their application. So there is another end to the spectrum of lottery grant making, which is all about the sort of organisation, I suspect, to which you are referring, where we would be taking perhaps a higher risk on not securing every last detail about an application that would be required for a major capital project but getting that money out there. Yes, that does involve a degree of risk, and we do have a certain number of applicants for whom, having been awarded a grant, things go wrong, and we have mechanisms for either assisting them or recovering those monies as appropriate, but there is an emphasis in the Awards for All programme on things being fast, simple, transparent and reasonably slick, particularly in terms of giving the assistance to the applicants at the point where they are making an application, for many of whom that will be their first opportunity of accessing funding, and this is a bottom run, if you like, on the ladder of funding opportunities for many of them. The evidence in the five years that the Awards for All programme has been going is that a number of organisations who first accessed funding through the lottery and through the Awards for All programme are encouraged then to make larger applications for all sorts of projects that they may have trialled or on which they may have done a feasibility study to the other distributors. So there is another aspect to this issue of risk. Certainly, as far as even smaller grants are concerned in the future, the Awards for All programme will be looking at ways in which we can get very small amounts of money, as proposed in the decision document, of under £500, to communities in a very fast and slick way. We cannot spend a lot of money on that because it would cost us more to administer than it would to make the payment. So there are a number of areas in which the lottery is both working together and reaching into the communities. Q194 Mr Flook: Have any of you done any work on how repeat requests are going to compete in the future with new requests in an area where there may be no increase in the underlying amount of money you had to give away? Baroness Pitkeathley: The issue of sustainability is obviously one that concerns us all. I think you have to look at the varying amounts of time for which lottery grants are given. Some of the New Opportunities Fund grants have been given for five years, and in the case of Fair Share some of the endowment grants would go over 10 years. So there is a great deal of difference in when a project grant comes to an end. Thus far, the New Opportunities Fund has very little experience of repeat grants because of the length of time that we have been going. One of the things we all have to contend with is that it is not always right for a project to continue - sometimes a project has done its work in its three or five years and it is perfectly right then for it to come to an end. At the beginning, when large grants are given, we do quite a lot of work with applicants about how they are proposing to sustain it when the lottery money comes to an end, how they are going to embed it in their local community, what other forms of funding they are going to access, and some of them are very successful at doing this. Lady Brittan: We have some of the same problems. Our grants go up to six years: three plus three - but of course not everybody applies for the three to six. Perhaps 25 per cent of our money goes on what we call "development grants", which are between three and six years. We are also very conscious of the fact that we do not want those who come to us for funding to be utterly dependent on our funding, because, in the end, we cannot go on beyond six or nine years or even 12, and so we are trying to do a lot more work on exit strategies, helping people to look at signposting towards other funders, talking through some of the outcomes at the outset. We are moving very much, in the work that we are all doing, to outcome funding, to looking at round outcomes. Pre-application support is going to be amazingly important, I think - because, if somebody starts off on a small funding project, we need to talk through at the very beginning what are the salient points that need to be addressed, what are the chances of its success, et cetera. So we are hoping to streamline the process a lot more and try and think about the issues of sustainability. We are also paying a little bit more towards core costs. Chairman: Rosemary McKenna. Q195 Rosemary McKenna: Thank you, Chairman. There is still evidence that some organisations are finding it very difficult to apply. I know a lot of work has been done over the years because we all work within local communities. Particularly for smaller organisations, what would you like to see happen to assist the small organisations? They cannot afford to pay someone to prepare their bid for them and yet they are very, very often the people in the community who understand and know what is needed. Would you make any suggestions as to how the re-organised lottery could help in that way? Lady Brittan: We are very conscious of the fact that very small organisations do not always have the resources or, indeed, the ability even to start on the ladder - perhaps above £5,000. The £5,000 Awards for All has been, as has been said, a stepladder into the bigger grants but there are one or two who start off higher than that. We have consciously made a lot of investment into infrastructure bodies of one sort or another - the CVSs in particular. Throughout the history of the Community Fund, large sums of money have gone to support capacity building, either at the individual level of the organisation - so from time to time we certainly give practical advice - or occasionally we let a contract to someone else perhaps in a particular sector, like the black and minority ethnic sector, to assist small, struggling organisations, even to prepare business plans. So I think the new distributor will be very conscious of the very small community end and how difficult it is and, indeed, that many parts of the country have very little in the way of voluntary sector infrastructure at all - very few voluntary sector organisations. We are beginning to try to address that through our Fair Share scheme, which is about sending our staff out into the Fair Share areas, of which there are a number in the UK, and part of their work is really to try to encourage the formation of voluntary organisations and help them, once formed, fragilely formed, to become more sustainable. Mr Dunmore: My response would be that it depends on the programme that you are running and there are many different ways of doing it. Diana has explained some of the ways we have already done it. There are others. With the New Opportunities Fund's Green Spaces and Sustainable Communities programme, we handed the different bits of the programme over to award partners, both from the voluntary sector and statutory sector, who had experience of working at the community level. It was very much a managed programme and those award partners would identify areas and communities that needed support and help them in developing their bids and bringing forward proposals for funding. The healthy living centres programme is an example of a different way of doing it, where the programme was very much predicated on partnership across sectors but it was also very much predicated on communities identifying their own health needs and so in that programme we put a lot of encouragement and support into getting different bodies to work together at the local level in partnership and 50 per cent of the 350 healthy living centres we are funding are led by, in many cases, relatively small, community-based groups. The reason they have been successful is because of the very positive partnership-working with their statutory partners which that programme has encouraged. I think the answer is many different ways, but this is going to be a real challenge for the new distributor. Chairman: Chris Bryant. Q196 Chris Bryant: Thank you, Chairman. If I could go back to the issue Adrian Flook raised a little earlier. Lady Brittan, you used the sentence, "We have now come to understand the downstream effects of reputational risk rather better." What do you mean by that? It sounds a bit "managementese". Lady Brittan: Maybe it is managementese. There are a number of risks that grant makers have to look at. They have to look at financial risks, they have to look at whether or not an organisation is sustainable in terms of its balance sheet, but one of the other risks is the reputational risk - in fact, partly to the organisation and partly to what you are trying to do. I think we have to admit that one of the grants we have made in the last couple of years had, in a sense, reputational risks or perceived ones on the National Lottery and the operation of it. I regret it and that is what happened. I hope that I explain: it is about your own reputation in the sense of organisational reputation and, indeed, to some extent, there was a lot of comment on the effect on the lottery sales. Q197 Chris Bryant: We were told that a couple of weeks ago, but I wonder whether the effect is by virtue of the award itself or by virtue of the media hype. Lady Brittan: I suspect it was more the media hype. The award itself was a perfectly respectable grant to an organisation that was eligible to receive lottery funding. Q198 Chris Bryant: I am nervous, from what you have said, that you are going to be more timid about funding in the more courageous areas where your fund really could and can make a difference. Lady Brittan: I hope not. I do not think that any grant we have made subsequently or any set of grants that we have made subsequently demonstrate that we have become more timid. I think we have perhaps become a little more savvy about how to manage any adverse publicity that might take place. We have made one or two extraordinarily controversial grants since that time, so I hope that, although we may have learned to have dealt with it a little bit better, we continue to make brave and bold grants to areas of extreme disadvantage which may or may not be at the time in a section of the public's interest or approbation. Q199 Chris Bryant: I think we probably always want it to be in the public's interest, but sometimes I have felt that in particular the fund that you represent is partly there to make a difference where organisations would find it much more difficult to fundraise because they are not the cuddliest organisations out there. Is that fair? Lady Brittan: I think that is absolutely right. Throughout the history of the Community Fund, including the money that we have given to research projects, international projects, right the way across the spectrum, certainly into the groups of people we have targeted for our funding, we have always tried to support and fund a broad spectrum, including those who to some sections of the press in particular are not very cuddly. Q200 Chris Bryant: A different issue: geographical distribution. As I understand it, of the management money that is distributed, a certain amount is set aside for Wales, Scotland and Northern Ireland. Is there a geographical distribution for each of the regions before you start making any allocations in England? Lady Brittan: We do it by population and indices of deprivation: the three countries and then the nine English regions and they are allocated on a formula. Q201 Chris Bryant: You could allocate lots of money to London, for instance, and every single penny be spent in Covent Garden or Mayfair, and that would not end up seeming like a very sane and sensible outcome. Lady Brittan: The Community Fund has a London committee. They have a number of priorities which they publish and they fund within those priorities. They have one or two geographical areas particularly that they want to get money into. So it is certainly not the way you say. Each of our regions allocates money according to the priorities of the region. Mr Dunmore: You are quite right, that in terms of Scotland, Northern Ireland and Wales there is a pre-determined allocation based again on population weighted by deprivation. As I have said, the Community Fund then goes through the same process for the English regions. The New Opportunities Fund has not done that for the English regions and that is partly, again, a consequence of the sorts of programmes we have been asked to run by the Government, which have been national programmes. We have targeted those in different ways, depending on the particular programme. Just to give you an example, when we were funding out of school hours learning projects, we very much wanted to target on disadvantage, but the best way of doing that, after a lot of discussion and consultation, seemed to be by targeting the money, at least to an extent, on those schools with the highest incidence of free school meals - which was a way of tackling disadvantage. Another example would be the PE & Sport programme, where we have made allocations to every LEA area but they have been weighted by deprivation in those LEAs. I think, as a general rule, for most of our programmes we will target them on disadvantage in some way. Very often for our programmes we will use the index of multiple deprivation in order to do the targeting, very much recognising - and I think this is going to be an important issue for the new distributor - that that does not always work terribly well in a rural context and you have to be a bit more sophisticated in your targeting of rural areas. There are other ways of doing it as well. If you are trying to fund particular communities of interest (for example, those who are disabled) then you will target in a different way again. I think you need to be flexible about this. Q202 Chris Bryant: New opportunities. I guess one possible new opportunity would be for kids from a poorer background, an area with multiple indices of deprivation, to go to live theatre, opera maybe, contemporary dance, whatever. For instance, in South Wales the new Millennium Centre is being built with a large amount of lottery money going into it from the arts end, as it were, but, since there are not going to be any trains that go anywhere from Cardiff after 10 o'clock at night, it is going to be more of a matinee centre than Millennium Centre! Do you get engaged in the business of making sure that people who are from isolated communities have access to the arts? Or is that the arts end? Is that for them? Because you have just talked about access to sport. Mr Dunmore: I guess this would not be particularly around arts, but certainly when we are funding projects - and, again, depending on the programme - we may well take into account the need to fund access issues. I guess an example of that would be healthy living centre, again in rural areas, where we have certainly funded mobile provision of health advice and information, and we have certainly funded transport costs as well for people to get to a place where they can actually receive that sort of advice and support. In our out-of-school-hours learning programme, we funded transport costs around the issue of special schools and children who very much do need some sort of transport facility to take advantage of the after-school activities. Very often the LEA transport will come at a certain time, at the end of the school day to take them home, and if they then stay on for after-school activities you have to provide transport. So, yes, we are very conscious of those sorts of issues. Baroness Pitkeathley: Some of those arts access issues have been tackled through some of our summer activities programmes for young people who are at particular risk also. Mr Wilkins: Perhaps I might also say that this is exactly the stuff of Awards for All. These are small awards, up to £5,000, from essentially community-based organisations - although we also have the ability to fund health bodies, parish and town councils. The sort of projects you were talking about, the issues to do with access, are exactly the sort of things, at the bottom end of the spectrum of lottery funding. We can respond to the particular needs of very small groups who want to have access and who make application to us to have access to the sorts of activities that you suggest. A whole range of the awards that are made through the Awards for All programme on behalf of all the distributors goes into exactly building up that sort of network of lottery-funded, small organisational activities which focus on disadvantage, and the distribution of the Awards for All monies is very similar to the way which Stephen has described for the Community Fund. Although we do not get the same national publicity as the Community Fund or the New Opportunities Fund, we have an absolutely fantastic local press response to the sort of awards we make about just the sort of activities you are describing. Q203 Chris Bryant: How much does it cost to process an application on average? Baroness Pitkeathley: It depends entirely on the nature of the programme. Some of the ways in which the New Opportunities Fund has allocated money is a very cost effective way of doing it, others through award partners, but, where you do individual assessments for open access programmes, naturally that is very expensive, particularly where you have to provide some of the one-to-one support that some people need. Mr Dunmore: Could we offer to give you some figures at a later date. Mr Wilkins: For the Awards for All programme I can tell you it is £176 per application processed. Chairman: Thank you very much indeed for a most useful session. Memorandum submitted by Arts Council England Examination of Witnesses
Witnesses: Mr Peter Hewitt, Chief Executive, and Ms Pauline Tambling, Executive Director for Development, Arts Council England.
Chairman: Good morning. We would like to welcome you here today. May I take the opportunity of mentioning that I have had a letter from Jerry Robinson apologising for not being here. I would like therefore to take this opportunity of saying how much certainly I appreciate the work that Jerry Robinson did while he was at the Arts Council. I think that in many ways he transformed it and for the better. (That is no reflection, of course, on the permanent officials of the Arts Council.) Alan Keen. Q204 Alan Keen: Thank you, Chairman. The lottery income has been declining, and it looks as if that may continue. How do you cope with that? Especially when the Arts Council has a lot of core capital city projects, how do you cope with a reduction coming in, when you have to look after the provinces as well? Mr Hewitt: We receive from the DCMS, on a regular basis, forecasts on lottery income and they give us in general what they describe as a high forecast, medium forecast and a low forecast. The Arts Council's policy general is to believe in the medium forecast - and, I have to say, in general the medium forecast has proved to be reasonably accurate. We have a very careful cash-flow projection system which we have put in place. We are thereby able to ensure that we know exactly how much money we have available for distribution looking quite well into the future. We update it on a regular basis; the mechanics are all there. However, obviously income is reducing and that is unfortunate. There is always much more we would like to do, but, even still, the lottery resources we get are sizeable and they are very, very important to the work of the Arts Council. We do use our lottery resources and our Grant in Aid resources very much together. I think that is one of the important advantages, if I may say, that the Arts Council enjoys, and together we plan for the arts in a systematic and careful way to ensure that we are not tripped up by any reductions on the lottery side in future years. Q205 Alan Keen: With regards to the Olympics, which appears to be going to take some income away from the Arts Council, what are your forecasts on that? Are you really concerned about it? Mr Hewitt: The information we have been given recently from the DCMS suggests that for the years 2005 to 2009 there will be a relatively small decrease in lottery income, about £4 million a year, but potentially increasing quite substantially after 2009, as we head towards 2012. That certainly is of concern to us. The Arts Council's view on the Olympics ambition and the financial implications of that are perhaps most simply put in this way: We do acknowledge that there will be a reduction in terms of "good cause income" as a result of the new Olympics game; however, we think it is very, very important - and I think the people leading the Olympic bid and the Government recognise this - that arts and culture are part of the Olympics ideal. We want to be in there, making a case for resources from the Olympics game - after all, if you take the Olympiad ideal in general terms, it has to involve both sport and culture. We want to ensure that in net terms the arts in this country are hopefully net gainers rather than net losers from what might come out of the Olympics experience. Q206 Alan Keen: You have answered part of the question I was going to ask you. I know it is early days, there is planning needed, particularly with the resources that are required, but has DCMS or the Government in any way discussed with you what you think you might be able to contribute and what is needed for the Olympics as far as culture and the arts are concerned? Mr Hewitt: Yes, they have. From the very first day that the Olympics was announced, I made the case to the Government that it would be very easy to focus just on sport but we need to ensure that culture is right in there. I am very pleased to say that there are signs that the bid company is about to establish a cultural group with a culture chair to take forward those ideas and to build the culture bid right into the programme. As I am sure many of you will know from previous sporting occasions, sometimes we have been rather late in coming to the cultural dimension. For example, although the cultural part of the Commonwealth Games was fantastic in the end, we actually got there quite late, and there have been previous sporting occasions when we have hardly got there at all. I am really urging the Government to make sure we are in there now talking about culture. I also see a real opportunity in hopefully bridging from the Capital of Culture Experience in Liverpool in 2008 through to 2012, so we build over those four years a cultural programme so that by the time we get to 2012 we have something of real excitement and scale and value for the public. Q207 Chris Bryant: Just following on those elements, the Olympic bid of course is for London. Is this going to be a London cultural dimension? You are bridging the gap from Liverpool to London. I am not sure whether this is a new physical entity. Mr Hewitt: Of course the Olympic bid will be branded on London, but I think everybody acknowledges that it needs to be a UK experience. Some of the sporting activities are intended to take place outside of London, I understand, but certainly in cultural terms there needs to be a major cultural festival and set of activities in London but also activities right throughout the country. I know from talking to colleagues from our own organisation in the different regions, we are very, very geared up to ensure that it is a genuine UK celebration, because people will travel outside London and we will be in the world's eye. I think the country as a whole has the opportunity to benefit from this. Q208 Chris Bryant: Was that true of Barcelona? Was it not really just Barcelona and Catalonia that benefited? Atlanta. Mr Hewitt: Different countries have taken different approaches. Certainly, in the case of Atlanta it was very much just about Atlanta, but that may say something about the nature of the United States, or Atlanta within Georgia. It is probably also right that in the case of Barcelona - I do not know, I am surmising - it may be something to do with the particular regional dimension of Catalonia and Barcelona within it, but in its relationship with the rest of Spain it may have been something a bit more to do with Barcelona. Here, with it being potentially the capital city, I think we have a responsibility to ensure that all the regions of the country can have a relationship with this, what I hope will be an extraordinary exciting event in the capital city and outside. Q209 Chris Bryant: I have this picture of you being bled for money to run the Olympics and then on top of that you are going to bleed all your other programmes to put money into an Olympics cultural programme. Then all the major organisations in the country and all the small theatres around the country are going to say, "Hang on, what's happened to us?" Mr Hewitt: I understand that potential danger. That is absolutely not what we would allow to happen or, I am sure, what our regions would allow to happen. They are very, very conscious of what is important to their own villages, towns and cities and their own people, and they are also very conscious of: If we do engage with the Olympics in this way, engage in a way whereby there is a permanent legacy not just in London but elsewhere." So I know that the plans will not be just about putting loads of money into a one-off festival in London and elsewhere; it will be: How can we use this experience to build the cultural provision in general in this country and take it to a further stage? Q210 Chairman: The more questioning has proceeded, and in the group of organisations who were here before you, it would appear that, if anyone by chance was sceptical about the Olympic bid, they might say that there is a danger that the Olympic bid will (a) bleed you of your core money for which you have a great many clients and applicants and (b) breach the additionality principle by bleeding you of lottery money as well. Could you tell me whether I am right or wrong, that, if I were a sceptic about the Olympic bid, I might have justice on my side? Mr Hewitt: I would say that there is no danger of the Olympics bleeding the Arts Council of its, if you like, tax-based funding. I am quite sure that we will ensure that continues to provide for the arts on an ongoing basis in the way that we always have. In terms of lottery and additionality, self-evidently the new lottery Olympics game will take money away from the good causes. Self-evidently, from the proposals put forward by Government, there is the opportunity for them to move money between the Olympics distribution fund and the general National Lottery distribution fund in future years, so certainly there is a threat there. I think the approach that we have to take is that we want to ensure that we are net winners and not net losers. But, to come back to the additionality point, I suppose those who might counter the point that you, Chairman, have just put, might say, "Well, the Olympics in itself is an additional event. It is a one-off. Even now we do not know whether it is going to happen - it may not happen. It is genuinely additional, if it happens. Therefore, as an extraordinary, one-off, special additional event, perhaps there is an argument" - and I am not necessarily saying this is my argument - "to say that therefore additional resources might be found in this case from the lottery." Q211 Chairman: But it was mentioned earlier on - and perhaps you were here when it was - that there is a possibility that the Olympic lottery game will start later this year, which is ahead of any decision on the bid. Mr Hewitt: I have heard that there is some speculation about that. My understanding is - as Stephen Dunmore said - that that is very unlikely. In fact, I believe that within the Olympics regulations the Olympics organisers or Camelot would be prohibited from introducing a game until the decision is taken in the summer of 2005. That is my understanding of the true situation. Chairman: Chris. Q212 Chris Bryant: Thank you. Could I move direction a bit, to talk about devolution. You are England, I know, but I wonder how closely you work with Wales, Scotland and, for that matter, Northern Ireland, not least because some of the major elite organisations of the country must surely have some kind of responsibility not just within the individual home countries. Mr Hewitt: Yes, indeed. We do work very closely. I chair a coming together of the Arts Councils from the various countries on a regular basis. We carry out various pieces of work together. For example, recently we have agreed to extend our resources for touring in such a way that we can break down some of the previous very unfortunate barriers that existed. Q213 Chris Bryant: The Royal Shakespeare Company, I think, was not visiting Wales at all. Mr Hewitt: Exactly. Of course, it works both ways: we also put money into Welsh National Opera to come into England. So we try to avoid the nonsenses that can exist around these boundaries in those areas such as touring and we do talk regularly with the other Arts Councils. Q214 Chris Bryant: The amount of money which goes to the Welsh Arts Council and Scotland is determined. That is fixed. Do you do regional distribution in the same way, that it is fixed within the different regions within England? Mr Hewitt: Yes. It varies slightly between programmes but for our Grants for the Arts programme, which is the programme which assists particularly local activity projects, initiatives at local level throughout the country, we distribute that through the nine English regions according to a formula based partly on population, partly on deprivation indices and partly on physical scale of the regions. So, yes, that is allocation‑‑‑ Q215 Chris Bryant: I will ask you the same question I asked the previous witnesses then. So, especially in the arts, I guess it would be quite easy: you dollop out the chunk of money according to these factors to London but all of it gets spent in Covent Garden. None of it gets spent in Hackney? Mr Hewitt: Well‑‑‑ Q216 Chris Bryant: That is a question actually. It sounded like a statement, but I was not meaning it that way? Mr Hewitt: If I can relate it to London or to any of the other regions, we do have regional offices, previously regional arts boards, who have worked on ‑ are historically very conscious of the needs of different parts of their region and very aware of social issues and deprivation issues in terms of the distribution of their money. So those organisations do ensure at regional level that a good degree of computability is delivered. Our record over the years - of course it can always be improved, but our record in terms of lottery distribution, I think, is reasonably good. For example, more than half of our capital funding has gone to the 99 most deprived local authorities in England, and we have worked very hard to ensure that within those local authorities ‑ for example, let us take Islington, it does not just go to Saddlers Wells, but goes to those parts of Islington where there is genuine deprivation. Q217 Chris Bryant: But former mining constituencies have done particularly badly on arts allocations, falling from something like 28% to 24% of the national average. It is actually getting worse rather than better? Mr Hewitt: In the case of the Coalfields Communities, the information I have been given is that we have put £37 million into the Coalfields, and there are some places, for example, Barnsley, Doncaster, Rotherham, where we have done a lot, put about £500,000 into that area. I would, however, acknowledge that there is more to be done in funding in the Coalfields area, and it is part of our ‑ one of our priority areas. Q218 Chris Bryant: The youth theatre and youth music - I have a slight interest in that as I am an Associate of the National Youth Theatre. I am not specifically asking about it, but youth theatre and music, because much of this happens through schools, is potentially in the area of ‑ the additionality area. How do you resolve that debate and discussion, or is youth theatre and youth music rather the Cinderella for you? Mr Hewitt: Would you mind if I invite Pauline, who is a specialist in that area, to answer that question? Mrs Tambling: We have done quite a lot over the last two years, specifically in the area of youth work and youth organisations, not least because there is a sort of relationship with the Department for Education and Skills. Historically these organisations have fallen between the cracks of the two sectors with our side saying it is education and the other side saying it is arts. What we have managed to do over the last couple of years, not least because we have the existence of our delegate distributor in youth music, we have been able to bridge the gap there. We have increased our allocations to all the national youth organisations. We are working with the DFES very closely so that we can manage this relationship between what we can do through lottery and what we can do through grant‑in‑aid; because it is absolutely essential that we do not take lottery money and give to those organisations if there is a legitimate case for some of the work they are doing happening through DFES funding. We are working very closely with them and so initiatives like the music manifesto, initiatives like the new youth fund that is coming on stream ‑ we would want to play an active part in making sure those organisations benefit from those activities. Q219 Derek Wyatt: Good morning. I was interested about your potential for the Olympics. When Baron de Coubertin created the Olympics there were gold medals for art, there were gold medals for literature. Actually he won with one of his books ‑ I expect he was the judge as well, but he did put one of his dreadful novels up, which I read in French some years ago. I wondered whether you had contemplated doing something similar in actually bringing back, if you like, not the Nobel Prize for Literature, but something that actually could add to the dimension of the Olympics and give us a bigger bid than perhaps we can contemplate at the moment. Mr Hewitt: I think it is a very interesting idea. The Arts Council does involve itself in a number of prizes and awards at the present time. In fact we have been taking a fresh look at that recently. In my conversations about the Olympics this very idea has come up in sport simply because it is competitive and it can show people on the podium first, second and third. That gives it some kind of presence and a profile, which sometimes in the arts we do not always achieve because we have things like the Oscars and all those awards, but I think the question of an awards-based approach to excellence in culture alongside the sporting dimension of the Olympics is a very important one which we should take forward in our more detailed planning. Q220 Derek Wyatt: With Sporting England they have had a very profound rethink with respect to the amount of money that has gone into sport over the last 10 years, in the sense that, although, I think it is £1.6 billion, it has only increased participation by 0.3%. Do you have similar figures? In other words, if you spent more money on providing facilities, would participation be down or up? Can you tell us what you have on that sort of area? Mr Hewitt: I think there is no question whatsoever that participation in the arts and opportunities for participation have increased hugely over the last, I would say, 10, 15 years. The lottery has played a really, really important part in that, because it has allowed us to get to local level through things like Awards for All, through things like our Community Buildings programme which we are doing in the West Midlands at the present time. The entire thrust of our local lottery funding has been about participation and engagement at that level, so I think it has been a massive contributor to active opportunity for people in the arts. I am sure the lottery has been so. It is quite difficult to put a very specific figure on participation because very often we give grants to a whole range of arts organisations on an on‑going basis and they do a mixture of what you might call spectator experiences and participatory experiences; and they do actively try and blur the division as far as they are able to, but I am in no doubt at all that the lottery has been a really major contributor to enhancing opportunities for participation. Mrs Tambling: In the last two years we have been running an omnibus survey to check participation in the arts and people's views on participation in the arts, and we have now two years worth of data on that which we could certainly send you as a follow up to this hearing. Q221 Derek Wyatt: There is a purpose I am asking. In my constituency there is one cinema for 75,000 people, we have very little theatre, we have very little museum facility and we have no art gallery. In a sense I am attracted by the French concept of doing an audited need so that they take, as it were, a 35,000, a 50,000 population and then say that should have, you know, these glues, as it were, that will help the community. What work are you doing on that and how come, as it were, you know ‑ I cannot be the only one, but we do not seem to have anything? Q222 Mr Flook: But you! Mr Hewitt: Our work in this generates very much to our relationship with local authorities. We, as a national body with regional offices, have to work closely with and listen to what the local authorities are saying they need. Local authorities have their own plans - they have their own cultural plans. We have a very close relationship with them, and we try and get into partnership with them to answer the very needs that you are referring to. I recognise that that does depend on the local authority's own priorities and where the local authority wants to put its resource. I also recognise that, of course, local government is itself under tremendous financial pressure right across the board, but I think that is the principal body that we do work with. Derek Wyatt: I understand that, but if you have a new Turner Centre (as there is in Margate), that eats up all the money in the south‑east of England and will do for some time to come. I was more interested in the idea that there was a need for art and there ought to be an audit of art. Therefore have all the arts councils been asked for an audit rather than the other way round? Asking local authorities, "You may or may not have offices..." in their list of political priorities is pretty low down. This is more or less in the concept of getting better facilities at every level? Mrs Tambling: I think one interesting example of that is to bring in a programme for creative partnerships which is actually looking at cultural entitlement rather than looking at provision ‑ and this is mainly for young people and young people in schools ‑ but what we see is a very, very different scenario if you are working in east of London where you have access to pretty much the best and most well‑funded arts in the world whereas if you are working in Cornwall or another place. What we are looking at is mechanisms to look at the cultural needs of those communities, the desires and wants of those communities and how we broker the relationships. Sometimes that will be in terms of bringing extra organisations into the area or, indeed, making buildings available for the arts, but sometimes it will also be in terms of touring companies and bringing special initiatives in, and sometimes the special initiatives will lead to a very, very good case for a new building; but certainly the trend is much more towards looking at what people want to have and what they need and away from looking at what people want to provide for them. Mr Hewitt: I think there is an important difference here between arts and sport. I think sport is in some respects more able to make some formulated assessments of X numbers of people living in X population, and you can relate that to sports halls, swimming pools and those sorts of things. The arts are by nature more varied, more difficult to find a formula to apply, and what a particular community may want or need - as Pauline has said, the committee may look very similar in terms of levels of deprivation and social indices or whatever, but they might have very different cultural interests and cultural needs. It is a more various exercise, I think. Q223 Rosemary McKenna: I suppose the last set of questions is demonstrating the perennial debate that we have between the higher arts and popular culture. You are not answerable for the Scottish Arts Council. I am not suggesting I have any questions there, but recently in Scotland there has been some opinioned work done on whether people would continue to support the Art Council's funding of, for example, Scottish music or the substantial amount of money that that needs as opposed to traditional music and modern music. Is that reflected in any way in how applications are coming to you for funding? Is there an increase in popular culture, traditional music, people coming forward for that? Is that being reflected in England? Mr Hewitt: Yes, it is. In our Grants for the Arts programme we do state that we are particularly interested in supporting areas of the arts that have received traditionally less support than perhaps some of the more well‑established and traditional art forms, and we have been successful in getting substantial additional resources into street arts activity, for example into jazz, into folk music and into those areas of the arts which at one time the Arts Council would have paid a great deal less attention to. So, yes, that is very much our priority, to broaden the range of activities. I think the Arts Council traditionally some years ago had a very, very narrow set of definitions. It was about a particular kind of music, a particular kind of theatre, a particular kind of classical dance movement. We have actively sought to question that and to broaden it, and have done, I think, up to a certain point. We need to do more. Mrs Tambling: One crucial thing we have done over the last two years in reforming our grants programmes is we have stripped out all the specific requirements in terms of types of art. So, for example, in our previous 120 plus schemes that we used to run before we got them down to five, we had schemes for classical music, or visual arts, or whatever. Now you come into the scheme and you come in as an organisation wishing to do an arts project, and the nature of the particular art form is then taken forward without saying, "Oh, you are not doing the particular sort of art that we want you to do," and that has been tremendously successful. On the other side, we have started to use cultural ambassadors, as we call them, to go out and work with communities to help them make applications. So we set internal targets ‑ for example, the black and Asian arts groups ‑ we set internal targets for all our regional offices as to how much they should be giving to those groups in order to increase the amount of take‑up, and then we send people out to help those organisations to know about our grants programmes and to know how to apply and to formulate a very good application so that they do not fall out by the rubric. Q224 Rosemary McKenna: Is most of that funding from lottery funding or from core funding of the Arts Council? Mrs Tambling: Well, the joy of being able to use grant‑in‑aid and lottery funding together is that we can prioritise new, innovative additional work to people who would not have come to us with the lottery funding whilst looking at the some of the historic clients and making sure that they are getting grant‑in‑aid, and the lottery means that we can get some new and different sorts of projects which is refreshing the whole art sector. Q225 Rosemary McKenna: Does that not undercut the additionality aspect of lottery funding? Mrs Tambling: No, absolutely not, because it is actually going out and finding new applicants and new projects and new sorts of work. What we can then do is use grant‑in‑aid as a legacy where we do get those fantastic projects that maybe other distributors have to query whether they can take them on for another 3, 6 years. I am stressing the additionality rule. We can be establishing our targets within our grant‑in‑aid and look at some of the better projects and take them through beyond. Q226 Rosemary McKenna: So you actually have people going out. Ambassadors, you say? Mrs Tambling: Cultural ambassadors, yes. Q227 Rosemary McKenna: Do they go out into the communities throughout the country? Mrs Tambling: In every region. Q228 Rosemary McKenna: So there are people employed as ambassadors? Mrs Tambling: In every region. Q229 Rosemary McKenna: In every region? Mrs Tambling: Because we are working with targets on the one side and ambassadors on the other, the two things can work so that we achieve the targets we are setting ourselves and we can measure region against region: because, quite evidently, there are some regions who have more problems, for example, reaching black and Asian communities and others that have more problems reaching rural, deprived communities. So we can look at the different needs in each region. Mr Hewitt: This goes back to our experience. When we put in place the first capital programme with lottery funding we were horrified to find that the level of requests from the black Asian sector throughout the country was terribly, terribly low. It was really quite shameful. When we came to the second programme we employed some people and said, "Your job is quite simple. It is to go out there and tell people the Arts Council has changed. It wants to hear from you. It is listening. It is ready to fund your kind of work." It was only through that person-to-person contact that we were successful. What happened in the second capital programme? One‑third of the total program was spent on black and Asian organisations absolutely as a result of that person-to-person contact. I think it is in the discretion of how you access new activity, new arts, new people and new communities. By far the most powerful way of doing it is through people. You can do it through portals, you can do it through improving your funding, the application form. You can make things simpler ‑ you can do all that ‑ but the key thing, in my view, is people. We can provide some of those people, and we have to work with other organisations who provide people who are prepared to spread the same message. Q230 Rosemary McKenna: Good. Like local authorities, because - I agree with you - they should set the priorities. Mr Hewitt: Absolutely. Q231 Rosemary McKenna: One more question. When talking about the Olympics, the arts aspect of the Olympic bid, will you work closely with, for example, the Arts Council in Scotland, because there will be events taking place throughout the country and it would be a great shame if you did not work together to demonstrate the kind of culture that is available in different countries. Mr Hewitt: I agree entirely, and we have already started talking with the other countries. Rosemary McKenna: Thank you. Q232 Mr Flook: You may not like the fact, but it would appear to me that you are at the bottom of the pile of all these people who have money to hand out, in the sense that if the average player of the lottery said, "Where do you want the money to go?", you might say, "Hospitals. Schools", you might say "Sports fields", and then you might say, "Oh, and art". Are you concerned that by the merger of two of those big funds you may get squeezed a bit further? Mr Hewitt: Can I say first of all, we carried out some research through the Office of National Statistics Omnibus Survey a year or so ago, and lots of very interesting findings, but one of the findings was that 74% of adults over 16 in this country ‑ I know this is not a lottery specific but it is still, I think, partly relevant ‑ believe that the arts should receive public support, and 73% believe that the arts play a valuable role in public life. I think that in itself is quite an interesting statistic, and it belies some people's assumptions at certain times that the arts are still seen as being out of touch and elitist and not to do with people. Q233 Mr Flook: But 100% would probably say that the hospitals‑‑‑ Mr Hewitt: Of course. Q234 Mr Flook: My point is you are still not at the top? Mr Hewitt: Yes. Compared to hospitals and schools and addressing crime, yes, of course, we are lower down. Are we worried about the mega distributor? We have some opinions about how we must make sure that we work well with the new distributor, but we are not ‑ we do not have a fundamental concern about it. We are looking forward to having discussions with it about their plans for transformational grounds, their role as a centre of excellence, what they are going to do with the young people's fund, and we are already beginning to have those discussions. Q235 Mr Flook: Do you want to express a couple of examples where it might overlap and you might feel that it has to take over some of your functions? Mr Hewitt: Yes. For example, there is this plan for the new distributor to be a centre of excellence in terms of capital funding. The new distributor will be made up of three distributors, two of whom have no previous experience of capital funding, one of whom has; but we have to recognise that because everyone has known the Millennium Commission's lifespan is somewhat limited, inevitably some of this expertise will be drifting away at this time. We on the other hand, along with Heritage and others, have a lot of experience of capital funding, so the centre of excellence actually must build on our experience and not trying to create something new and separate which ignores the fact that the other distributors have a lot to bring to this particular issue. In terms of transformational grants, I know it is the current intention of the new distributor to fund a limited number of big capital projects in the way that the Millennium Commission has in the past, in the way in which the Arts Council indeed has at times in the past. I would like to hear a discussion about big projects which are not about capital, which are actually about people and about communities and addressing the needs of perhaps a whole community, a whole town, even a whole city. I think the future is at least as much about people and talent and ideas ‑ the software, if you like, as opposed to just the hardware. So transformational projects, I would like to think, could be as much about people and their lives as the buildings and the facilities that they occupy. Q236 Mr Flook: Would one way to deliver, say, to a whole town ‑ to do that would be just one lottery distributor. Is that possible, do you think? Is it desirable as well? Mr Hewitt: I do not think it is desirable that there should be just one lottery distributor, because I think we need to get the best of both worlds. I think bodies like Sport England, Arts Council England, can bring valuable specialist knowledge. A lot of our facilities, for example arts facilities, are specialist and we can bring specialist knowledge to considering applications, etcetera. At the same time I think it is very useful to have a distributor that can do things on a common basis and can do things on behalf of a broader range of interests. I think at times in the past we have had to create mechanisms for distributors to come together, which is cumbersome and legally quite difficult to establish. Having a distributor that can play some part of behalf of them all seems to be something which is potentially of value, so I think we need both. Mrs Tambling: We have had a track record in terms of working with other distributors, most notably Sport England and the opportunities found on the basis of sport in the arts, where Sport England has taken the lion's share of the burden, but we have been very, very heavily involved in making sure that the spaces that are envisaged for funding are for the rights for the spaces for the arts; and I think we need to bear in mind that this is not just about giving away money. Giving away money and monitoring the use of that money is very, very important, but much of what happens in terms ‑ for example a transformational project happens way before and way after the building goes up. It is all that development work that is going on on the ground. It is the expertise that is needed in terms of knowing the sort of people to bring into the area to work with the communities and others, then there is the building and then there is the living in the building afterwards. I do not think we want to disentangle the building project from the development work that needs to go on both before and after that project is built. Q237 Chairman: Could I put to you a question which, I suppose, applies to Sport England as much as it applies to you; namely the problem that you face, and that is faced by your would-be recipients, by large projects which by definition have to be located somewhere. I was looking at the statistics with which we were provided for lottery recipients or, rather, total lottery receipts within Parliamentary constituencies. In my constituency it is something over £8 million. As I recall, in the neighbouring constituency of Manchester Central it is nearly £300 million. There are two problems, it seems to me, about that. One problem is that if any Manchester constituency ‑ and, of course, it is the same for other large cities ‑ contains an application to you or to Sport England which is deserving of itself, the answer may be, and I fear that the answer was in the case of the old English Sports Council, "Well, Manchester are getting so much anyhow, we cannot spare this for you." So there is a question of distorted distribution within an area, but there is also the problem that within a constituency, when one looks at that, really £300 million has gone to Manchester Central, how much of it has gone to local causes in Manchester Central, how many, in your case, has gone to big arts projects which are inevitably at the centre of the great City and how much has gone to sporting projects? The question then further arises to what extent is the additionality principle being approached in those circumstances? Because the lottery is a very convenient repository for the disposition of funds which might well have had to be given out. It could be argued, could it not, that if Sport England did not exist, if the lottery did not exist, the Government would have had to find some channel for the generously large sums of money which it handed out to the Commonwealth Games. Mr Hewitt: If I can answer your last point first, I think it is obviously a very challenging question. I think if we look back over what the lottery has done for the arts landscape in this country over the last nearly 10 years, it is absolutely staggering; and when I talk to people outside England about our lottery and what our lottery has done for culture, and when I imagine back to what the landscape looked like in 1995, it is truly astonishing what has happened, and this links into what I said earlier, that I think we should be promoting the good things about the lottery a lot more than we have done. That is the case. Obviously the question is how much of that would have happened through public governmental support in any case. To me that is the key question that needs to be answered in addressing the additionality point. My fear, my feeling, is not very much of it would have happened. I agree there would have been a pressure on the Government to do some of it, and it would have done some of it, but my guess is that that landscape would be no more than 10 or 15% improved in comparison with the 100% improvement that the lottery has delivered. In terms of the question of Manchester in relation to the other Manchester authorities, again I agree it is a very difficult issue. I am quite sure there are times when at regional level, in considering applications with regard to the big conurbations, account is taken to some extent of the levels of benefit that have been enjoyed by some of the major conurbations, and there is always a danger that very good local smaller scale activity might be squeezed out. We try very hard to ensure that is not the case and to take into account the inherent value of the project itself, but it is something which ‑ you are quite right ‑ we do find ourselves considering. In terms of the benefit to the broader community, because I lived and worked there for many years, I know Tyneside the best of all the Metropolitan conurbations. If you look at what has happened in Newcastle Gateshead over the last five to 10 years ‑ first stimulated by the Angel, which obviously has become a symbol with huge value, and then leading to the transformation of the Riversgate in Newcastle Gateshead ‑ I would suggest that you could argue that the benefit of all that to the local communities of Newcastle and Gateshead is very substantial in terms of jobs, in terms of the whole lifting of that part of Tyneside; and there are lots and lots of knock‑on positive effects that have occurred, but one does have to put that alongside the fact that the people of Newcastle and Gateshead do need to go to the riverside to go to the Sage or to go to the Baltic, to go over the bridge and to do those things ‑ live theatre, whatever it might be. So it is a valid point you raise. Mrs Tambling: Without the lottery we probably would have had a huge amount of pressure for renovation and we probably would have seen the renovation of some of our established arts organisations. It is inconceivable, I think, that we would have seen an ocean centre in Hackney, or an art gallery in Walsall, or the development in Newcastle Gateshead, or the Lowry Centre, or the Sage. Those things are actually ‑ they could never be possible without the lottery. People would not have thought of putting those buildings in most of those places. Chairman: Thank you very much indeed.
Memorandum submitted by The Arts Council England and Sport England Examination of Witnesses
Witnesses: Mr Patrick Carter, Chairman, and Mr Roger Draper, Chief Executive, Sport England, examined.
Chairman: Mr Carter, Mr Draper, we would like to welcome you both very much indeed here this morning. Mr Wyatt will start the questioning. Q238 Derek Wyatt: Good morning. Obviously there has been some apprehension, both this morning and last week in sessions, about the potential Olympic Lottery and the implications it has for Sport England. Can we just clear up this business whether it can start before and after this guardian story? Mr Carter: I think I could give you my understanding. I do not think it is definitive. My understanding is that the IOC will resolve, because they own the brand, that the brand cannot be used until the city where the games is going to has been chosen. It would seem logical. Q239 Derek Wyatt: The more interesting question is the impact that the Olympics might have on Sport England's budget per se. I remember we had Trevor Brooking in here saying he needed £5.4 billion to repair the swimming pool and that that would not be possible. At the time we were not doing very well at swimming, but we are doing much better at swimming now. What are your anxieties about the fact that you will lose more money? Mr Draper: I think in terms of the cash flow, we have cash flow through now until 2009, and we have built in a commitment of £158 million up to 2009. Also, whilst we cannot project through to 212, there would be a commitment from Sport England in total of around £280 million. So, put in a wider context, that is about 20% of our overall funds that we have cash flowed through, 40% of the remaining money would go to local community projects and around 30% going to our national programme supporting elite athletes and national governing bodies. So traditionally 85% of our investment has gone into local community projects. We have to make sure there is a balance. There is no point in having a fantastic Olympic Games if we are going to inspire a whole nation to get involved in sport and physical activity only to walk into their local communities and see run down facilities with no coaches, and so on. So it is about twin‑track investment, but I think our major concern is the 63% overall decline in lottery funding that we have seen and we have to cash flow into 2009. Q240 Derek Wyatt: Given that some of us on this side feel the Olympics is such a big thing it should not be a lottery and that it breaches the additionality, how then do we develop, as it were, in your own words, you know, more sport when you have got less money? Is it not the responsibility of the Government to come forward with extra money for sport? Mr Carter: Absolutely. Sport will only flourish if it has investment. So the question will be how do we get that money? That is a question the Government will have to face. Will the money therefore come from the Exchequer, if we are to create a successful sporting nation? Q241 Derek Wyatt: On the changes that you have made to Sport England, why do you think it took so long to recognise that the participation rates were so low? Are you confident now that we will get a fitter nation? Mr Draper: Again in terms of the figures, one of the first things that we actually did when we came into Sport England was to understand our customer base, and whilst the 0.3% increase in participation across the board is widely noted, we dread to think what that would be like if the investment had not gone in. In terms of Sport England and the lottery funded projects, we have through our research found that in those projects where there has been funding there has been a 143% increase in usage. Again I think it highlights the fact that we are only really scratching the surface across the board and that if we are going to hit the targets groups that we want to hit ‑ we know there are 20% of people in this country who are what we class as sporty types, we know that there are another 20% at the other end of the extreme that probably fit into the sort of couch potato category; it is the 44% who are what we call on the subs' bench that we have to convert to getting active, doing 30 minutes a day, because we certainly feel that sport can contribute, not just in terms of winning medals on the elite side, but also to the health of the nation. Obviously that is going to come to the fore this year with the Chief Medical Officer's report, and so on. Q242 Derek Wyatt: Looking at some individual sports, I notice that in Premier Rugby the players have in their contracts that they must spend 20 hours a month in schools. Kids like heroes, and I suspect that is a good idea. In the elite programme that you fund is it also in the contract that those elite athletes must also spend an equivalent amount of time a month in schools so that kids can also rub shoulders with these gold medal winners? Mr Draper: I think it has been an area of weakness in the past. Certainly we have tightened up, if you like, the obligations on the athletes who are receiving funding, and we have a scheme called Sporting Champions which is really about getting local heroes as well as national heroes out into those local communities, and we have seen quite a significant impact in terms of young people in particular being inspired, but again - I think a point that was made earlier with regard to recognising the contribution that the lottery can make - we knew that the recognition improved significantly after the Sydney Olympics when we did well from the medal camp because a lot of the athletes were talking about, "We could not have done this without the lottery", but how many people know that £8 million of investment went into the England Rugby World Class programme to make them number one in the world, to get them winning the World Cup and to develop the academies with the premiership club. So again it has got to be twin‑track. It has to be about the local community as well as making England the most successful sporting nation in the world. Q243 Derek Wyatt: But the people who came earlier from the two boards said that no‑one really understands what the lottery has done in communities. There is not enough awareness. Do you think that perhaps the lottery ought to do, as well as the big game programmes, perhaps a monthly half an hour show that it might fund itself that actually tells the success stories of what the lottery does in the UK? Have you put that to them, or have you considered that yourself? Mr Draper: That is one area where we are working closely with the new joint promotional unit to get that recognition at a local level as well a national level. I think, if you look at some of the recent campaigns, they have actually focused on, in particular, local community sports schemes as well as showing whether funding is going towards elite success as well. Q244 Chris Bryant: Potentially the Olympics, if it ends up being held in the UK, offers enormous opportunities, not least in terms of getting lots of volunteers from all round the country to help staff the event and so on. At what point would you start working with the British Olympic association to make sure that the plans are ones that are going to work in terms of finance? Mr Draper: We are already working extremely closely with the British Olympic Association and a number of other sporting bodies, and we know from the success of the Commonwealth Games that it is not just about producing a world class event. It is also about winning medals, it is also about regeneration and, perhaps most importantly, it is about being the guardians of legacy. I have been up in Manchester on quite a few occasions in recent months looking at the legacy of the Commonwealth Games in terms of getting young people involved in sport, whether that is activity buses, whether that is the new athletics arena that opened last week, whether that is the gymnastics centre at Gorton that got the gymnastics equipment. So it is not just about winning the bid, it is also about the investment in elite sport, but, perhaps most importantly, it is about the legacy. We are very supportive of the Olympic bid, but we also want to see a long and lasting legacy for sport in this country. Q245 Chris Bryant: You may be losing out financially by virtue of the Olympic bids because of the way the figures are all going to be readjusted - the amount of money that is going to be disappearing from your cause presumably as well as others - so as to fund the Olympic bid itself. Is there not a danger in the meantime that what that will mean is that the grass roots organisations which have to feed through into providing all these world class sports people in the future are going to lose out? Mr Carter: I think that is, of course, the issue we face, and, you know, the amount of money that we are going to get is forecast to decline. I think the question we have to face is how to get money from other sources therefore. Sport is very much on the agenda now. If you think back, it has probably never been quite so much in the public eye, what with the success of the rugby and the Commonwealth Games, etcetera. I think the Olympics has propelled that to a new height. So I think what we are hoping is that that raised awareness nationally is going to propel more money into sport. Q246 Chris Bryant: You said ‑ and I will not take great umbrage at it ‑ that about £8 million spent on the English Rugby Team-‑‑ Mr Flook: They won. Chris Bryant: Of course, they won. I did spot that, and I was very pleased. Chairman: Stop bickering! Chris Bryant: Then you moved on to the point about your ambition is to make England the most successful sporting nation in the world? Rosemary McKenna: He is Sport England! Q247 Chris Bryant: I know, and I understand that, but in the run up to the Olympic bid the priorities have to change somewhat, do they not? Because it is about the UK bid, and if we are going to win the Olympic bid one of the things that we have to prove is that it is the whole of the UK, the whole of the nation, that is behind the bid. Does that provide any challenges for you? Mr Draper: I think the first point revolves around devolution. In fact, I meet regularly with my colleagues from Scotland, Wales and Ireland on a regular basis, and whilst everyone's role is to get the England Football Team winning, or to win an individual sport, ultimately our goal is to provide success on the UK stage, you know, winning gold medals at the Olympics as well, and we have to make sure that England, Scotland, Wales and Ireland are working closely together to achieve that goal whilst also understanding that individually we want to win at the Commonwealth Games and we want to win in our devolved sports as well. The Olympics has been a very good focal point to bring the home countries much closer together to achieve that common vision. Q248 Chris Bryant: When we looked at swimming ‑ we did report a couple of years ago now ‑ we found there was quite a sharp difference between the desire to get as many people swimming and leading a healthy lifestyle as possible and enabling 40, 20 swimmers to plough up and down for hours, and hours, and hours. Is that true in other sports and how do we resolve that in swimming? Mr Draper: I think swimming is a very good example, because one of the things we have done this year is we have prioritised our sports. Activity and success, in many respects, are very different things. Swimming is actually one of the highest participation sports, and we have seen a 16% increase this year in terms of the numbers of people participating in swimming, but it is also a sport we are becoming successful in as well. Bill Sweden, the new performance director, over the last few years has made significant shifts and we can now hold our head up quite high and say, you know, "We are one of the world leaders in the swimming stakes." Obviously we have got to deliver in Sydney, but there are other sports. Rowing is a good example where, whilst the ARA ‑ the Amateur Rowing Association ‑ are doing a great deal of work in local communities trying to get more people rowing, it is never going to be a mass participation sport. However, we are successful at rowing. Basket ball, which has huge potential in local communities, but we are 24th in Europe currently. Q249 Chris Bryant: But the Rhondda Rebels play everything going. Mr Draper: That is the balance we have got to get, and what we have to do is make sure we get good returns on investment and we get bangs for bucks. What we do know through our research on activity is that we are probably going to get most gain around informal sporting activity, such as swimming, cycling, outdoor pursuits, extreme sports with young people, but at the same time we have also got to concentrate on delivering success in our traditional sports as well, and that means England winning in Portugal in the summer, it means a successful Olympic Games, and it also means that our success in the Rugby World Cup is not just a blip in history, that we go on and win the next world cup and the one after that as well. Q250 Chris Bryant: I know you are trying to do two things which seem mutually exclusive and you are trying to say that they are not mutually exclusive; in fact, they are bound together, but my own experience as a constituency MP - obviously I am Wales and you are England - is that the difficulties that local amateur clubs face just in terms of having pitches that are in decent nick that do not waterlog too frequently so they can play on a regular basis, in terms of getting kit for youngsters and all these different things, especially in deprived communities, still that is where the real emphasis needs to be. Sometimes our obsession with winning medals seems to get in the way of that because the money then just is not there for the grass roots. Mr Carter: We have tried to strike a balance to face that issue. Historically, 80 per cent of our money has gone out into the community, not into the grand projects. We are trying to maintain that balance. We always have to be aware of that. We would not want to walk away from national projects because they are extremely important for setting the stage. Our fundamental aim is to get the infrastructure working the whole time out there so that people can participate. Mr Draper: It is also striking a balance between community sport and elite. One of the things in our new direction is looking very much at multi-use sports facilities that can be used for community use and elite athletes. I was in Portsmouth last week and there were 300 gymnasts in the gymnastics hall, at one end three year olds doing forward rolls and at the other end there was a young girl preparing for Athens. We have to dispel the myth that we just need elite sports facilities or we just need community sports facilities. If we are looking at the usage, we have to strike a balance between them all because there are only so many hours in the day when elite sports people can train. Q251 Mr Doran: Can you say a little about the government's request that the Sports Council put 340 million into the pot for the Olympics? For example, what consultations were there before that figure was arrived at? Mr Draper: We had obviously worked closely with the government on those figures. We were seeking clarity in terms of the sort of funding package. We always recognised that sports lottery distributors would contribute to the bid. As it happens, from a Sport England perspective, we traditionally contribute about 83 per cent. That is why in our cash flows out of the 340 million we are looking at 282 million through Sport England. We cash flowed that in and we felt comfortable with that. Where we are seeking further clarity from government is that if you assume £750 million will come from the Olympic lottery fund, 340 million from the sports lottery, there is a potential nought to £410 million that will come from other lottery good causes. Where we have not received clarity is on whether we are going to get hit with a double whammy and that comes through sport as well, or sport's contribution is the 340 million and the other contribution is coming from arts, heritage and other good causes. Q252 Mr Doran: You have anticipated my next question because I was going to ask how it was split up. I am a Scottish MP so I am interested in how much is coming into the pot from Scotland. Was it done on a Barnet formula basis of 10.8 per cent coming from Scotland and seven per cent or thereabouts from Wales and so on? Mr Draper: Yes. Q253 Mr Doran: In terms of where that money is going, is it a direct transfer from your budget into the Olympic budget, however that is made up, or will you be spending money in kind? Will any facilities that you provide for the Olympics count as part of your contribution? Mr Carter: As we see it at the moment, we want to finance specific projects and the first of these potentially is the aquatic centre, but we want our money specifically linked to a project that is identifiable, particularly because we want to ensure the legacy. We want to track that and make sure it is the right formula in subsequent years. Q254 Mr Doran: The money that you spend on that will count towards the 283 million? Mr Carter: Yes. Q255 Mr Doran: One of the issues for me as an MP from Scotland, particularly from the far north of Scotland, is what do we get out of this. That is the sort of question my constituents ask me. One of the things that has been flagged up as a possibility is that areas like my own, Aberdeen, might be able to attract some of the pre-Olympics training teams. We are going to need investment to have the facilities to offer to potential customers. Have you a programme for developing that? I am talking in the Scottish context but obviously the same issues apply in England. How is that going to be affected because that will require some extra funding, I am sure. Mr Draper: The training venues and the legacy around the country are obviously things that we are extremely interested in. Indeed, because of the forward planning involved in the Olympic Games, we have committed £5 million to the Weymouth Sailing Academy because that is a potential venue and the work needs to start now. Similarly with the Commonwealth Games, whilst the majority of funding was in the Manchester area, all projects locally like the Bolton Arena were funded, and Bisley which was for shooting. Whilst those training venues have not as yet been identified and we have a network in place through facilities, whether that be Loughborough, Bath and so on, there is a lot of work that needs to go on to identify those facilities, whether they be in Scotland, England, Wales or Ireland. Q256 Mr Doran: I do not know how many teams take part in the Olympics. It may be 60 or 70 or maybe more. Potentially, there is that number of local authorities that will be knocking on your door asking for some help to upgrade their facilities to attract these teams so that they can get a share of the benefit. What is your strategy for that? Mr Draper: There are not enough venues to go round for the number of teams. That is where we have to get the twin track investment taking place. We have to make sure we balance the Olympic facilities, the training facilities, as well as the local community development. The Olympics will be a catalyst if we can get everyone behind that for more investment into sport locally as well. Q257 Mr Doran: On a completely different tack, two or three years ago Sport England were coming to talk to us about Wembley. Have you managed to put that saga behind you? What lessons have you learned? Mr Carter: We carry the scars, I suppose. We have learned how to assess major projects, to ask the right questions and to put in place now control mechanisms to make sure they get delivered. It has been a long journey. As we see the arch going up in the next four weeks, I think we will begin to see the beginning of the payback. Q258 Charles Hendry: Mr Carter, you were saying a little earlier that there was a need to propel more money into sport from other sources. What do you have in mind for that? Are you looking at other aspects of government funding? Are you looking at business? Are you looking at individuals? What are you doing about finding those sources and making the money come through? Mr Carter: First of all, we do have to look right the way across sport business. The whole area of sponsorship is developing but probably has not developed fast enough. Around the Olympics we are going to see more of that. It is a uniquely iconic event. Also, we are having a number of discussions with various government bodies on how to get private money in to support their programmes, particularly community programmes. There is a growing awareness in corporate Britain and in individuals that they can make a great difference by investing in communities through sport. That is something we are talking to governing bodies about: things like the Football Foundation, the foundations, how these things become a mechanism for drawing in more money. We are advanced on that and we would like to see that go further. Clearly, as regards public money, we are entering SR2004. As the lead body for sport, we have to make the case to get more money in, to improve the exchequer funding, particularly if we are setting our stall out to bid for the Olympics. We have to make sure that domestically we have the right infrastructure and that infrastructure which we already have is maintained to a sufficiently high standard to make sure people want to go and use it. Q259 Charles Hendry: Do you pay the full rate of VAT on sports construction? Mr Carter: Yes. On a new sports building, I think we do. I will verify that. Derek Wyatt: You do. Q260 Charles Hendry: As far as individuals are concerned, would your advice be to them not to play the lottery and put their money straight into the sporting facilities? Mr Carter: No. I think people should support the lottery. (a) They get to support a good cause and (b) they have a chance of winning, which is probably the thing that mostly drives it. Q261 Charles Hendry: They should put that money into sporting facilities when they win it? Mr Carter: Absolutely. If there is a big win we would like to see people give more of that money to sport. Also, one has to be realistic about where people will put money and who will put it in. I think that probably the biggest seam to be mined is corporate Britain. Q262 Charles Hendry: Mr Draper, you were talking about the 20 per cent who are inclined to take part in sport anyway and the 20 per cent who are very difficult to get involved. If we look at the 60 per cent who are in the middle there, are they more likely to be motivated to get involved in sport because of a good facility on their doorstep, or because they see Britain doing particularly well in something so they are motivated to get involved with, say, the Rugby World Cup? Which is the more important inference? Mr Draper: I think it is the local issues. There is no clear evidence anywhere around the world. Whilst there is the feel good factor and the inspirational factor, most of it is locally having access to local facilities. Also, a lot of investment has gone into facilities and people love cutting ribbons and popping champagne corks but it is people who make things happen. Whoever you talk to in sport, who inspired them? It was their parents, their PE teacher, their coach. It is an area that we have neglected in this country. If you look at every successful sporting nation, France is an excellent example. They did not just do best in their facilities; they also stacked those facilities with excellent coaches who were going into the schools, excellent professional management structures and volunteer structures. One of the things we are looking at is getting that balance much better. We are still behind the French. The investment in French sport is about five times the investment that goes into English sport. If we have any aspirations about our vision to make England an active and successful sporting nation, it is not just the investment; we have to get the people and infrastructure in place as well. I think a big emphasis is on local people, local infrastructure, and getting the balance right. Then, hopefully, we can get a few more talented people through to inspire the youngsters of this generation. Q263 Charles Hendry: Are you satisfied that the sports projects which have been backed through the lottery have been appropriate facilities? The reason I ask that is that at one particular rugby club which asked for a new club house they put in for what they thought was the right size. They were told by Sport England that they had to build it 50 per cent larger. They went along with that because they wanted the money, even though they now have a financial crisis because they cannot get the funds in to cover the running costs. Do you feel that if you look across the board the facilities which have been built have been the appropriate ones? Mr Draper: Again, it is about getting the balance right. It is also a dilemma because it is not an easy job being a lottery distributor, getting the balance between processes, controls and outcomes at the other extreme. I know one of the concerns that we had coming in was how much of lottery money went to people who were good at filling in forms and being process driven and how much was going to coaches on the ground who were getting more people involved in sport. Getting that balance is all about well managed risk taking across the board. It is difficult, but we were pleased recently that, at the Local Government Association who are obviously one of our core customers, Sport England came out as the top ranked lottery distributor in terms of customer satisfaction. You are not going to get every scheme right but on the whole we have made a big impact and we have some quality facilities out there. Q264 Mr Flook: Chris Bryant earlier referred to our most excellent report on swimming. One of the facts that always sticks in my mind about that is that there are more 50 metre swimming pools in the Paris area than there are in the whole of the United Kingdom. Why would anyone come and do their training in Britain, particularly if they are a swimming team of some repute - say, the Australians - when they probably could not get enough training? Frank Doran made an excellent, thinly veiled request for a large, Olympic team to go to Aberdeen. They will not go there; they will go to France or Germany, will they not, in the run up to the games? Mr Draper: Again, that comes down to the investment issue, because it is not just swimming. If you look at indoor tennis courts in Paris, I think there are more indoor tennis courts in Paris than the whole of Great Britain. It simply boils down to investment. Ten years ago the French government decided to invest heavily into local community sports facilities, got the balance right with elite sport and then got the people involved. We have a joint strategy now with swimming. I think we are making a lot of progress. 50 metre pools are going to open in the next few years in places like Liverpool, Leeds and Portsmouth and there will be the aquatic centre in east London as well. Progress is being made. Also, swimming elements are working very closely with the commercial sector as well in terms of public/private partnerships. There are more 25 metre pools now being developed by centres like David Lloyd Leisure, Invicta and so on that during offpeak hours are not being used. Swimming elements are doing a fantastic job brokering deals and looking at usage rates. It really is about working smarter rather than harder. It is a similar issue we are faced with on the whole playing fields debate. We have done a lot of research. What we must not do is live in the past. People these days do not particularly want to be playing on dog fouled, muddy pitches. They would rather go and play on the fantastic developments that have been made on synthetic turf pitches and in JJB soccer domes which are now open 24 hours a day. It is about usage and getting more people involved in the local communities 24 hours a day as opposed to maybe three hours a week. Q265 Mr Flook: You are sounding like a Liberal Democrat who is trying to promise that everything will come out of one small, magic penny. The £750 million for the Olympic Games is going to be spent in the run up to that but, Mr Draper, you seem to give the impression that all will be milk and honey as Olympic teams arrive at Heathrow. They will all be going to various parts of the country like Aberdeen and Cumbernauld, to see the Rhondda Rebels, down to Sittingbourne and Sheppey, into the Weald of Kent and even to Somerset. It is not going to happen like that, is it? Let us be realistic. You are going to have quite a few specific areas but you will not be attracting the Australian Olympic team to Aberdeen three or four months in advance of the Olympics in 2012. Mr Carter: We certainly think they could go to Leeds to swim in the 50 metre pool we are financing or the one we are financing at Liverpool. Q266 Mr Flook: I would be a bit miffed if I was a Leeds City council tax payer and I found that I could not use my pool for three months in the run up to the Olympics. Mr Carter: That is the wonderful thing about local democracy. That is going to be up to Leeds City Council to decide. If Leeds wants to play a part in it and forego the use of the pool for some weeks, that is their choice. Nobody is going to enforce that upon them. Q267 Mr Flook: Have you looked at how Olympic teams travel to their destination in the months beforehand and what they are likely to look for? How much of that will need to come from the 750 million to fund those teams' travel? Mr Draper: It is really looking at the training venues and obviously some countries will choose not to come over here. In fact, in preparation for Athens, the British team are preparing largely in Cyprus or Australia in warm weather climates. At the moment, we are still too far away and it is a big part of our job to make sure that the training plan is in place. Q268 Mr Flook: The government apparently is trying to propose that those people who will be looking at spending the 750 million that will come into the Olympic lottery game should be an Olympic distributor. Does that make sense: another one on top after all you have gone through, all the ugly ones like Pickets Lock and Wembley and to some extent with the good stuff of Manchester? Does it make sense to find somebody else without that experience? Mr Carter: Probably to us there are two issues. One is, on the one hand I suppose, to make sure this money is ring fenced for the Olympics if that is what it is for, so you could see the need to identify that. Whether you need the further balkanisation of lottery distributors is something we are very thoughtful about. The expertise that Sport England has has been demonstrated in things like the Commonwealth Games. Our contention would be that we could undertake a lot of that work, but I do appreciate the need to keep the money separately. It is how those two things work out really that is going to be very important. Q269 Mr Flook: You said you were very thoughtful and gave us one sentence on your thoughts. Could you expand a little? Mr Carter: Yes. We are thoughtful because the whole drive and everything we have done in the last 12 months has been to get as much money as we can into the hands of sport. If a separate distributor meant more cost, more bureaucracy, that is something we would feel we had to challenge because it is not getting money out there to sport. It would be very hard to see how you could meet all the statutory accounting officer requirements without some infrastructure to oversee the spending of such a large amount of money so there has to be a question about needing two structures. Q270 Mr Flook: Is it not just a cost element but also the experience element of the lessons you have learned and the pitfalls that you can fall into? Mr Carter: Absolutely. We would like to feel there would be some benefit from the difficult journey that Sport England has made and that we have that expertise. I think we feel we could and would like to deploy it. Q271 Mr Flook: How are you taking that case to the government? Mr Carter: We are in dialogue. Q272 Chairman: Mr Draper gave a remarkable figure of 16 per cent increase in participation in swimming. Could that have been a factor in the restoration vote for Victoria Baths? Mr Draper: The good news is clear, that swimming is on the up. Chairman: Thank you very much indeed. It was a very bouncy session. |