Examination of Witnesses (Questions 60-79)
MS SUE
STREET, MS
CAROLE SOUTER
AND MR
STEPHEN DUNMORE
12 JANUARY 2005
Q60 Mr Steinberg: How much is that?
Ms Street: That is what we are
looking at. That is around £750 million.
Q61 Mr Steinberg: £750 million.
I am very worried, therefore, bearing in mind how much London
has had already, not including the Dome. That means good causes
in my part of the world is going to dip out again because the
money is going to be concentrated in the South of England and
particularly in the Olympic bid. Have we got worries about that
or not?
Ms Street: I think that, of course,
constituency MPs and Members of this Committee will want to look
to their own constituencies. From the information I have Durham
has benefited a lot, £46 million in the past.
Q62 Mr Steinberg: How much did you
say the Dome was again?
Ms Street: Several hundred million.
Q63 Mr Steinberg: Right.
Ms Street: But some very important
projects in Durham. Of course, all of my colleagues in the distribution
funds will have to look to distribute across the geographic spectrum.
Q64 Mr Steinberg: Are you saying
that if we are successful with the Olympic bid that the distributors
can look forward to a lot less money?
Ms Street: I have explained, our
projections are 5% could be diverted.
Q65 Mr Steinberg: What was the original
expectation the Dome was going to cost?
Ms Street: I do not have that.
I think the Dome came in on budget but the visitor projections
were extremely optimistic.
Q66 Chairman: We had a report on
this this morning, actually, so we know a bit about it. It cost
about £600 million, is that right, NAO?
Sir John Bourn: Yes.[4]
Q67 Chairman: £600 million because
of the shortfall in visitor numbers. That is the answer to the
question.
Ms Street: No doubt you will be
discussing that next week, Chairman.
Q68 Mr Steinberg: I am very worried
that my good causes in the North of England are going to end up
as good causes for the Olympics?
Ms Street: I note your concerns.
Q69 Mr Steinberg: I hope you will
do more than note it. Can we move on. Would you agree, therefore,
that there is this danger looming, it would be advisable for the
distributors to spend as much as they can at the present time
and give out more grants?
Ms Street: My reasoning would
not be the same as yours. Parliament will have the opportunity
to take a view on the Olympic Games and whether they want it.
That is why I cannot answer your concerns, because it is a matter
for Parliament and for ministers. As a matter of good financial
management, as I have said, we are extremely keen, and we have
had robust discussions with the Lottery distributors to reduce
balances.[5]
Q70 Mr Steinberg: How can you ensure
that the distributors now move much more speedily to allocate
grants?
Ms Street: I think the movement
has to be not necessarily in speed. HLF in particular is very
fast in getting money out of the door. The move has to be to implement
their own policies and for some of them to see if they want to
move a little bit along that spectrum of caution and over-commit
more than they do now which the NAO clearly signals—
Q71 Mr Steinberg: Clearly the two
organisations sitting either side of you have something like half
a billion pounds in surplus, is that right?
Ms Street: A bit more than that.
Ms Souter: Our balance is just
over £900 million but if I can explain, it is not surplus.
All of that money, and by the end of this financial year another
£280 million on top, is committed to specific projects, Woodhall
Colliery and things like that, projects which are either being
developed and shortly will be ready to go or have spent some money
but not yet spent all of it.
Q72 Mr Steinberg: I understand your
problem, I do. With the new National Lottery Bill there could
be problems, clearly, particularly with yourselves. Do you
think it is fair that with the new recommendations any interest
being held separately should be shared equally amongst the distributors?
Ms Souter: I can understand perfectly
the Government's thinking behind it.
Q73 Mr Steinberg: Do you think it
is fair?
Ms Souter: It would be for Parliament
to decide.
Q74 Mr Steinberg: Yes, but do you
think it is fair?
Ms Souter: I think at the moment
the need for heritage projects is so great that I would be very
sorry to see any loss of income to heritage projects. Clearly
that is a matter that will be put before Parliament and for Parliament
to decide.
Q75 Mr Steinberg: You see I have
a great deal of sympathy with the argument that has been advocated
that you should be spending the money more quickly but also what
worries me as well is money should not be given out willy-nilly
and that money is given to the projects. How do you assess that
projects are doing what they said they were going to do?
Ms Souter: We have very clear
published criteria for each of our grant programmes which we provide
in all sorts of different formats for people and obviously we
are working within terms of our strategic plan which runs to 2007.
The assessment process is a very formal process and we look at
each of the criteria and assess against those. Obviously it is
a recorded process as we are distributing public money, we have
to be accountable for what we are doing. With the largest projects
we will employ a monitor to make sure that what is happening on
the ground is what people said they were going to do in their
project. Now the degree to which we check projects, and the frequency
with which we check projects, obviously depends on the size of
the project we are talking about. If we are talking about a £20,000
local history project, which might be run through our Local Heritage
Initiative programme with the Countryside Agency, there will be
a very light touch monitoring assessment there. If we are talking
about a £20 or £25 million grant, thinking about the
£20 million given to the Royal Festival Hall, for example,
there will be inevitably a much greater degree of monitoring
and detailed assessment as the programme goes along. We have talked
about risk a lot already, I think it is right that we assess the
risk of the various projects and apply a degree of monitoring
accordingly.
Q76 Mr Steinberg: A final question
to Mr Dunmore: what do you hope the Bill that is going to come
before Parliament shortly will do in terms of the distribution
of the interest and the distribution of the balances?
Mr Dunmore: Certainly we welcome
the Bill and the particular reason why we welcome the Bill is
because it will legitimise the Big Lottery Fund which will be
very helpful. We welcome the fact, also, that in the Bill the
Government is committed to giving us a much more flexible framework
than the framework that the New Opportunities Fund had which will
enable us to add value to the programmes that we have developed
and to respond to the views of our stakeholders.
Q77 Mr Steinberg: Can you answer
two specific questions?
Mr Dunmore: On the reallocation
of the interest, I feel fairly neutral I think it could be regarded
as being a fairer way of doing it. I do not think it will make
a great deal of difference to the way we behave. I do not look
at my balances in the NDLF every week and say: "This bit
of it is interest and this bit is principal", I just work
on the basis of the balances that we have got and the firm targets
that we have for reducing them. I am not sure that will make a
great deal of difference to me. Again, I feel fairly neutral about
the other process that is proposed in the Bill as well.
Ms Street: I wonder if I could
correct something: I said £750 million but I am advised—I
do not know if this brings you small comfort—it should have
been £450 million not 750 million.
Q78 Mr Williams: For the Olympics?
Ms Street: That would be the diversion
from the good causes.
Q79 Mr Steinberg: 5%?
Ms Street: Yes.
4 Note by Witness: The New Millennium Experience
Company which built, fitted out and ran the Millennium Dome received
Lottery grants totalling some £600 million. Back
5
Note by witness: I can confirm that the situation is essentially
as described in paragraphs 4.15-4.17 of the NAO's Report. The
National Lottery is expected to provide up to £1.5 billion
to help meet the cost of the Games. Of this, about half would
be raised by special Olympic Lottery Games, running over seven
years, and the remaining £750 million would come from sports
distributors (£340 million) and changing shares to good causes
after 2009, should any of the remaining £410 million be needed. Back
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