Select Committee on Culture, Media and Sport Written Evidence

Memorandum submitted by the Heritage Lottery Fund


  Heritage is a powerful source of social capital, the physical fabric of many communities, and a source of national and local identity and pride. The Heritage Lottery Fund (HLF), the UK's leading funder of heritage, invests lottery good causes money in the broadest spread of heritage, across the whole of the UK. In doing so, it conserves a valuable national asset and realises the potential of heritage to improve quality of life, extend opportunity and strengthen community cohesion. HLF is a key source of funding for the UK's national heritage, including museums, landscapes and historic buildings. HLF's huge investment in the UK's world-class heritage, and its progressive approach, have brought about a major shift in the sector, ensuring it is now reaching new audiences and developing new skills and ways of working. The outcomes of the DCMS consultation on the future of the lottery good causes, of HLF's own consultation on its future strategic direction and of the Heritage White Paper will impact on the ability of HLF and the sector to continue delivering change, conserving the nation's heritage and harnessing its enormous potential.


    —  Heritage is broader than just the historic built environment and includes museums, libraries and archives; natural heritage; industrial, maritime and transport heritage; and the heritage of language, dialect and cultural traditions. A more integrated approach from policy-makers would improve the impact of heritage funding and policy.

    —  The Department for Culture, Media and Sport is currently consulting on the future shares of lottery funding that each good cause—including heritage—will receive after 2009. Even if HLF retains its current share of funding, a combination of other factors will reduce the amount that HLF is able to award from around £330 million this year, to under £200 million from 2008.

    —  HLF's present share of lottery funding has left vital tasks still undone: this fact must guide the Government's current thinking about the future allocation of lottery funding to heritage.

    —  Lottery funding cannot, and should not, be expected to meet all the needs of the heritage sector; grant aid from English Heritage and the other agencies must be maintained at reasonable levels.

    —  HLF is currently consulting on strategic aims, and plans to further broaden public involvement and interest in heritage, and simplify its application procedures.

    —  It is vital that the forthcoming Heritage White Paper maintains a robust system of statutory protection to protect and complement HLF's investment.

    —  The separate National Heritage Memorial Fund is one of the few sources of significant funding for acquisitions in the UK. In 2004 the Goodison Report recommended raising the annual government grant-in-aid to the NHMF from £5 million to £20 million. HM Treasury has announced that from 2007-08 the annual grant will be increased to £10 million. NMHF is hopeful that DCMS will be able to secure agreement from HMT that this increase will at the minimum be preserved in the 2007 Comprehensive Spending Review and urges the Government to accept Sir Nicholas's recommendation in full.


  HLF is the UK's leading heritage funder, distributing the heritage share of National Lottery proceeds. It is the only heritage organisation that both operates UK-wide, and funds all types of heritage—including built heritage; museums, libraries and archives; natural heritage; industrial, maritime and transport heritage; and the heritage of language, dialect and cultural traditions.

  HLF currently distributes 16.66% of the money for good causes and since 1995 has committed £3.3 billion in 18,000 awards to heritage projects.

    —  40% of HLF funding has gone to projects in the 25% most deprived local authority areas.

    —  70% of grants in 2004-05 were for sums of under £50,000.

    —  Up to 50% of all funding since 2002 has gone to community and voluntary sector organisations.

    —  HLF funding of £3.3 billion has attracted £2.6 billion in partnership funding.

    —  58% of funding is now decided by locally-recruited committees in each of the nine English regions, and Scotland, Northern Ireland and Wales.

  The aims of the Fund are to:

    —  conserve and enhance the UK's diverse heritage;

    —  encourage more people to be involved in and make decisions about their heritage;

    —  ensure that everyone can learn about, have access to, and enjoy their heritage, and

    —  bring about a more equitable spread of its grants across the UK.

National Heritage Memorial Fund

  The parent body for HLF is the National Heritage Memorial Fund (NHMF), set up by the National Heritage Act 1980 with wide powers to fund heritage throughout the UK in memory of people who have given their lives for the UK. The NHMF operates as a fund of last resort, saving items of national importance that would otherwise be lost. In its 25 years it has awarded £220 million for more than 1,200 acquisitions.

The breadth of heritage

  HLF does not define heritage, instead asking its applicants to identify what they view and value as their heritage and wish to share with, and sustain for, future generations. This breadth of remit means that HLF can take an integrated view, cutting across the traditional, but artificial, boundaries between, for example, a museum and the park in which it may be sited, or the species and buildings hosted by a historical landscape. This pioneering approach to conservation management planning means that the projects HLF funds deliver wider benefits than a more piecemeal approach would.

  HLF's broad remit means that the NHMF is able to concentrate on funding the acquisition of the most significant at-risk pieces of the nation's heritage, often at short notice.


  Heritage provides both the physical fabric—buildings, public parks, streetscapes—and the cultural fabric—opportunities for learning, cultural participation and enjoyment, volunteering, a sense of identity—of our rural and urban communities. Investment of HLF funds attempts to realise the potential for heritage to play a role in community renewal and regeneration.

Investment outcomes

  Research into the impact of HLF's £3.3 billion funding since 1995 shows that it has brought about:

    —  Long-term economic benefit through:

—  recreational and tourism spend: heritage attractions play a critical role in the UK's tourism and visitor industry, and HLF has funded eight of the top ten of the UK's most visited museums, six of the top ten most popular visitor attractions in the UK and all of the top ten free heritage attractions.

—  creating new demand for hundreds of local businesses specialising in building crafts and skills: repairs to historic buildings are more likely to generate local employment and use local materials than new construction.

—   the positive impact on local business environments of better public spaces, refurbishment and reuse of redundant buildings and new cultural facilities.

    —  Benefits to the local area and the environment: heritage projects improve the profile and reputation of an area, lead to a safer and improved environment, reduce anti-social behaviour and improve leisure opportunities.

    —  Community benefits: heritage projects help communities by creating greater public spirit, mutual understanding and pride in the local area, particularly where they celebrate and commemorate the history of ordinary people.

    —  Benefits to individuals: taking part in heritage projects improves the learning experience and helps people to enhance their knowledge, skills and confidence.

  This is backed up by quantitative research into people's views on heritage places and activities:

    —  85% of the population say that the quality of public space and the built environment has a direct impact on their lives and the way they feel.

    —  82% of people think it is important for their local town or city to have its own museum or art gallery.

    —  More people visit museums, cathedrals, historic buildings and parks than go to live sporting events or zoos and theme parks.

    —  There are over one billion day visits to the countryside each year.

Access to heritage—HLF's approach

  The scale of HLF's investment in the UK's heritage has been matched only by the changes that this has brought about. Driven by the nature of lottery funding, HLF has encouraged the heritage sector to move towards a more inclusive and democratic vision, that takes into account people as well as objects. The think tank Demos says that the single greatest achievement of HLF has been:

    "To shift the idea of the value and importance of heritage away from being something that is exclusively determined by experts on behalf of society, to one that recognises the importance of widespread participation in identifying and caring for what is valued collectively".

  This radical approach to heritage has enabled a major shift in the heritage sector, ensuring it is now reaching new audiences and developing new skills and ways of working. Greatly increased visitor numbers at national museums are not simply the product of free entry, but also of the inspiring programmes of renewal, redevelopment, access and education encouraged and funded by HLF. Many public parks funded by HLF now have dedicated and active friends groups as a result of the community consultation that forms part of the HLF application process. Every single local authority area in the UK has received HLF funding, enabling communities to engage with their own heritage, irrespective of whether or not they have a heritage institution on their doorstep.

    —  11,000 young people have been involved in heritage projects through HLF-funded Young Roots projects, 95% shaped and developed by the young participants themselves.

    —  HLF funding criteria have led institutions to put learning at the heart of what they do, creating over 600 learning posts and 290 spaces for learning.

    —  HLF projects are noted for bringing together parts of communities which would not normally mix: 86% of participants surveyed have noted participation from people "who do not normally join in".

    —  95% of HLF projects report better physical and intellectual access.

  HLF also insists on economic sustainability and applicants must demonstrate demand and use for their projects as well as sound financial planning. As a result, no HLF project has failed in the history of the Fund.

  Recognising a growing lack of specialist heritage skilled workers, HLF launched a Training Bursary Scheme in 2004 which has to date awarded £7 million to ten partnerships running traditional training apprenticeships. In addition to this, HLF funds training elements in grant applications, encourages stand-alone training projects for volunteers; and requires all projects over £1 million to have a training plan.


Need and remits

  HLF has begun the task of reversing the legacy of decades of under-investment in the nation's heritage infrastructure but remaining need is immense (see Appendix).

  It would not be possible or appropriate for HLF to meet all of this need. Some will be in private ownership (a low priority for HLF funding), some will be better addressed by fiscal incentives or better management, some needs dealing with through the operation of statutory controls and some is the responsibility of statutory agencies.

  Lottery funding cannot and should not substitute for the support of the statutory agencies which have different remits and responsibilities, such as English Heritage's statutory responsibility for Historic Environment sector policy.

Lottery good causes funding

  The DCMS is currently consulting on future shares of lottery funding.

  The Department has confirmed that heritage will remain one of the National Lottery Good Causes after 2009. The share that heritage receives (currently one sixth of the funding for good causes) is currently subject to consultation and will be announced in early summer 2006.

  A number of other factors will also have an impact on the amount HLF will be able to award in new grants during the lifetime of its next Strategic Plan 2008-2013:

London Olympics 2012

  HLF was one of the cultural bodies supporting the London 2012 Olympic and Paralympic Bid. It was always known that a successful bid would be partly financed from the National Lottery. According to DCMS estimates, for HLF this means £75 million less in ticket sales and up to £68 million less as a result of changes in the allocation of Lottery proceeds, a total "loss" of income of up to £138 million, mostly in the three years leading up to 2012. Afterwards, HLF expects to go back to receiving a 16.66% share of Lottery proceeds.

National Lottery Bill

  The National Lottery Bill, currently proceeding through Parliament, would change the way that interest earned by Lottery Distributors on their balances is distributed. The National Audit Office estimated that in 2003-04 this clause would have cost HLF £15.7 million.

HLF's approach to over-commitment

  Since the start of the National Lottery HLF has committed more funds in new awards each year than it has received in income—on the basis that there would inevitably be a time lag between money being received, awarded to projects and drawn down by grant recipients. During 2005-06 HLF plans to award around £330 million, nearly £100 million more than it expects to receive in income. But it is reaching the point where it cannot continue to over-commit. From 2008, it will only be able to distribute the amount it receives in income each year—around £200 million.

  Even with all of these income reductions, HLF will still be by far the largest UK funder for heritage. But even if it retains its current share of good causes income, this drop in the amount it can distribute each year will mean extremely hard choices. Demonstrably, heritage's present share of funding has left vital tasks still undone: this fact must guide government thinking about the future allocation to heritage.

National Heritage Memorial Fund

  The National Heritage Memorial Fund is one of the few sources of funding for major acquisitions in the UK, standing alongside the National Art Collection Fund, and a small number of foundations and private donors.

  National support for local museum purchases (now the MLA Purchase Funds) has fallen by almost one-third in cash terms since 1980-81, from £1.75 million to £1.32 million in 2004-05. In that time, the NHMF has awarded grants totalling £220 million. However, the Fund's resources are limited and it cannot meet all the demands placed on it.

  Support for heritage should be a partnership between the public (through the National Lottery), private donors (the National Arts Collection Fund, foundations and individuals) and the Government, through fiscal arrangements and a properly funded NHMF.

  This was recognised by Sir Nicholas Goodison's report of January 2004, Securing the Best for our Museums: Private Giving and Government Support, which recommended raising the annual grant to the National Heritage Memorial Fund to at least £20 million a year, from its present £5million, to allow it to function more effectively as a national acquisition fund.

  HM Treasury has announced that from 2007-08 the annual grant would be increased to £10 million. NMHF is hopeful that DCMS will be able to secure agreement from HMT that this increase will at the minimum be preserved in the 2007 Comprehensive Spending Review and urges the Government to accept Sir Nicholas's recommendation in full.


  HLF's present Strategic Plan runs until 2008 and the Fund is currently consulting on its direction after this. Whilst it proposes to continue with its current successful strategic approach, it also proposes to deliver more opportunities for young people to learn about who they are and where they have come from; to increase opportunities for volunteering in heritage, particularly for young people and under-represented groups; and to equip more people to care for the culture, places and knowledge that they have inherited.

  HLF already involves the public in individual projects and in evaluating its work. It is also consulting on a range of innovative options for increasing public involvement.

  HLF has already simplified procedures to speed up the way that lottery money reaches projects, especially for small grants, and its annual customer care survey shows a long-term improvement in applicants' and grantees' views of HLF's performance.

  Complex heritage schemes are demanding and difficult to do well but applying to HLF needs to be as easy as possible, consistent with getting good value for lottery players' money. HLF plans a shorter application process, clearer and more concise application and monitoring materials, and easy-to-use electronic communication routes. In particular, it will review its small grants programmes (funding up to £50,000) to make applying even easier.


  Heritage was chosen as one of the original good causes for the Lottery in 1994 because it had so much potential and so little financial support. Only the National Heritage Memorial Fund covered the whole of heritage for the whole of the UK, so it became the parent body for HLF. In delivering funding to the UK's heritage, HLF works alongside agencies that are responsible for the natural environment (including biodiversity and the countryside), the historic environment, and museums, libraries and archives. HLF works in close cooperation with these agencies to ensure that lottery funding fits national strategies for heritage and provides the capital infrastructure on which other initiatives, such as Renaissance in the Regions, have depended. But the very nature of lottery funding means that HLF has developed a distinctive people-focussed approach, requiring projects funded to deliver a wide range of benefits, above and beyond conservation objectives.

  The diversity of organisations with a heritage role adds strength and value to the sector. HLF's unique breadth of remit across the whole sector and across the UK has enabled it to play a role in bringing heritage sector players together, sharing best practice and developing the voluntary sector. HLF is the only major source of funding for heritage projects beyond the remit or priority of the agencies, including notably regenerating public parks, the transport sector (including historic ships) and language, dialect and cultural traditions.


  Realising the potential of the UK's heritage is about more than money and HLF funding can only complement a functioning statutory system. The forthcoming Heritage White Paper offers the opportunity to put in place a robust system of statutory protection.

    —  HLF invests for the future and local authorities are the guardians of that investment. It is vital that local planning authorities have the skills to deliver conservation objectives.

    —  The current system was initially a balance of incentives and compulsion, but many of the incentives, such as grants for private owners, have now almost totally gone. HLF funding should not replace them and the Heritage White Paper should address this issue.

    —  HLF research and experience has shown the value and benefits of involving communities in decisions about places; any new system should create a genuine role for communities in caring for their heritage


  The view that heritage conservation acts as a brake on the economy is now outdated. There are many examples of the economic impact of regeneration projects and evidence that pound for pound, heritage projects put more back into the local economy through using local labour and materials than new construction.

  Funding for heritage cannot, in isolation from other measures, reverse endemic economic problems but can be a catalyst for changing perceptions of an area. The repair of historic buildings makes a positive contribution to urban regeneration by contributing to the quality and distinctiveness of local areas. Repairing historic buildings also addresses a principal source of public concern about their local areas. HLF's strategic programmes for Places of Worship—run in partnership with English Heritage in England—have benefited more than 2,000 places of worship throughout the UK, while its Townscape Heritage Initiative, on which EH is an adviser, has revitalised over 450 run-down areas. But the contribution that heritage can make to regeneration goes beyond historic buildings—parks and other green spaces are vital, as are works to the public realm and waterways and canals.

  There is a delicate relationship between any regeneration funding and the operation of the local property market. Initial investment may change perceptions of an area which can then create a speculative property market where properties are bought up and left empty in the hope of a rising market. Local authorities can break this cycle by using their statutory and legal powers.


  HLF is the UK's biggest heritage funder and since 1995 has invested over £3.3billion into heritage, in every local authority area of the country. This flow of money into local communities has been matched by major reform of the heritage sector, opening up the UK's heritage and its institutions to a far broader audience than ever before, and giving the public a greater say in the care, management and future of their heritage. At the same time, NHMF has acted as an acquisition fund of last resort, saving many treasures for the nation. Their legacy ranges from the British Museum's Great Court to Hadrian's Wall, to thousands of small heritage projects run by people representing the country's true diversity.

  But there is still a huge job to be done—and DCMS's consultation on the future funding of good causes, HLF's review of its strategic direction and the Heritage Protection Review will affect whether or not the needs of the UK's heritage continue to be met.

  In particular, HLF would like to see a more integrated approach from policy-makers towards heritage funding and policy; a recognition of the continuing needs of the heritage sector in the Government's current thinking about the future allocation of lottery funding to heritage; an increase in NHMF's current grant-in-aid from its current £5million to the £20million recommended by Sir Nicholas Goodison; the maintenance of grant aid to English Heritage and the other agencies at least at current levels; and a robust system of statutory protection.

19 January 2006

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