Select Committee on Culture, Media and Sport First Special Report


Appendix 3 - Reply from the Heritage Lottery Fund

As the body which distributes funding from the Lottery to heritage, HLF has given considerable support to historic ships over the past ten years. We were therefore pleased to have the opportunity to give evidence to this inquiry into maritime heritage and historic ships.

In addition to presenting evidence to the Committee, we submitted supplementary information in the form of a letter to Derek Wyatt MP[1], raising three particular issues which emerged from the Select Committee - the role of VAT, the number of Lottery officers, and our decision making procedures. We also wrote to Lord McIntosh in response to his announcement of the new Ships Unit. Copies of both letters are attached.[2]

We would make the following response to the Committee's recommendations:

Recommendation 1.

Like the Committee we welcome the National Register of Historic Vessels and were glad to assist in its creation.

Recommendations 2-5

We welcome the establishment of the new Ships Unit within DCMS and look forward to working closely with it. The Unit will also have an important role to play in the early stages of project development, in providing support for business planning, options appraisals and feasibility studies which HLF does not fund. We would also welcome further support for the Unit ; HLF alone cannot meet all of the needs of historic vessels - 90% of vessels are in private ownership and are not a priority for HLF funding.

Recommendation 6.

We agree that the inclusion of a vessel on the Register - whilst being a useful indicator of the heritage merit of a vessel - does not automatically make it eligible for HLF funding. HLF will only support projects that are sustainable in the long term and that combine heritage conservation and wider public benefits, including access and education. Just under half of the vessels we have funded are on the Register - other awards have gone to smaller vessels or to projects which demonstrate wide public benefits.

Recommendation 7.

As noted above, we have funded many vessels that are not on the Register. Every application is considered against our published criteria, in accordance with our policy directions and legislative framework.

Recommendation 8

We are delighted that the Committee has acknowledged our support to the sector, which of course extends beyond vessels to maritime heritage as a whole.

Recommendation 10

As noted above, HLF is currently the only identified source of funding but we cannot meet all of the needs of the sector. Applications for funding already exceed the sums available and difficult choices have to be made. DCMS has confirmed that heritage will continue to be a Lottery good cause after 2009. Our annual level of new commitments will, however, decline in future as we reach steady state in respect of income and expenditure.

We have also suggested that the new Unit set up a system for monitoring the long term maintenance of ships that have been conserved. In some cases, the need for major capital expenditure on ships - and indeed any other type of heritage - can be reduced through effective long term maintenance.

Recommendation 12

As well as guidance on funding strategies, the new Unit will also need to provide technical guidance, and will require expertise in conserving and maintaining historic ships. Published guidance on conservation is urgently required.

Recommendation 13

The Cutty Sark, in common with other listed structures, is required to pay 17.5% VAT on repairs, but not alterations, to historic fabric. Government has recognised the unfair burden that this places on those responsible for maintaining places of worship, and has introduced a scheme to refund VAT on repairs and maintenance. However, VAT remains payable on repairs to other kinds of historic structures. HLF accepts VAT as an eligible cost for projects that we fund.

Recommendation 15

A key role for the Unit will be promoting these benefits to the Regional Development Agencies and other organisations and seeking funding for maritime heritage from mainstream regeneration and tourism sources. In the light of the DCMS strategy on Culture and Regeneration, we hope the Department will be making a robust case to ODPM for the regeneration benefits of historic vessels.

4 July 2005

Annex : Letter to Derek Wyatt MP, Chairman of the Sub-Committee from Carole Souter, Heritage Lottery Fund.

We are writing to provide clarification of a number of issues that arose at the inquiry

1.  VAT

The Cutty Sark, in common with other listed structures, is required to pay 17.5% VAT on repairs, but not alterations, to historic fabric.

HLF accepts VAT as an eligible cost for projects that we fund.

Government has recognised the unfair burden that this places on those responsible for maintaining places of worship, and has introduced a scheme to refund VAT on repairs and maintenance. However, VAT remains payable on repairs to other kinds of historic structures.

2.  Lottery Officers

We have obtained a figure of 457 lottery officers in local authorities across the UK; we are unable to state with any precision what percentage of local authorities has lottery officers.

3.  HLF funding and processes

The heavy dependence of the sector on HLF for funding for capital works was made clear at the inquiry. Comments were also made about the difficulties and costs associated with obtaining HLF funding. It is important that the committee should be aware that whilst we fully expect to continue to support the maritime heritage for as long as we receive funding from the National Lottery, our funding comes with a number of provisos:

HLF has worked hard to make our funding easier and less costly to obtain. We introduced project planning grants to assist with the cost of surveys such as conservation plans and audience development plans. We operate a two stage process for grants over £1m with development funding available between stages 1 and 2 to give applicants confidence at an early stage that we will support their project, and to reduce the financial burden of developing a project. We also provide extensive pre-application advice. In the case of Cutty Sark, we provided grants for interim conservation work whilst a solution to the technical conservation process was developed over several years.

Nevertheless, there is always more to be done in this area and we welcome proposals for simplification. However, HLF is responsible for the proper use of Lottery players' money, and we do therefore require projects to demonstrate long-term viability before we are prepared to commit capital funding. This can be challenging for many applicants, particularly in this sector where leadership and guidance has been lacking.

For this reason we welcome the new Historic Ships Unit and believe it will have an important role to play in the difficult early stages of project development about which you have heard so much. The unit will need to be equipped with practical expertise on conserving and maintaining historic ships and should provide both advice and financial support for business planning, options appraisals and feasibility studies. Published guidance on the conservation of historic ships is also urgently required.

Finally, we would urge that the Committee recommends that the Unit should promote the economic benefits that historic ships can offer and seek funding for maritime heritage from mainstream regeneration and tourism sources, such as the Regional Development Agencies.

7 February 2005


1  
See Annex to the Appendix  Back

2   Letter to Lord McIntosh not printed  Back


 
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