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Session 2005 - 06
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Standing Committee Debates
National Lottery Bill

National Lottery Bill




 
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Standing Committee A

The Committee consisted of the following Members:

Chairmen:

Frank Cook, †

Mr. Roger Gale

†Afriyie, Adam (Windsor) (Con)
†Bailey, Mr. Adrian (West Bromwich, West)
(Lab/Co-op)
†Caborn, Mr. Richard (Minister for Sport and Tourism)
†Devine, Mr. Jim (Livingston) (Lab)
†Engel, Natascha (North-East Derbyshire) (Lab)
†Foster, Mr. Don (Bath) (LD)
Gwynne, Andrew (Denton and Reddish) (Lab)
†Harris, Mr. Tom (Glasgow, South) (Lab)
†Mann, John (Bassetlaw) (Lab)
†Reed, Mr. Jamie (Copeland) (Lab)
†Selous, Andrew (South-West Bedfordshire) (Con)
†Swinson, Jo (East Dunbartonshire) (LD)
†Swire, Mr. Hugo (East Devon) (Con)
†Thornberry, Emily (Islington, South and Finsbury) (Lab)
†Turner, Mr. Andrew (Isle of Wight) (Con)
†Walker, Mr. Charles (Broxbourne) (Con)
†Ward, Claire (Watford) (Lab)
Alan Sandall, Emily Commander, Committee Clerks
† attended the Committee


 
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Thursday 3 November 2005
(Afternoon)

[Mr. Roger Gale in the Chair]

National Lottery Bill

New Clause 1

GUIDANCE TO DISTRIBUTING BODIES

    ‘After section 27 of the National Lottery etc. Act (1993) (c. 39), insert—

    “27A   Guidance to distributing bodies

    (1)   The Secretary of State shall issue guidance to the distributing bodies on the distribution of lottery funds, including reference to—

      (a)   the means of ensuring that lottery funding is allocated without political interference;

      (b)   the distinction between essential and desirable government expenditure;

      (c)   the distinction between core central government expenditure and lottery funding;

      (d)   the distinction between local government expenditure and lottery funding;

      (e)   the means of ensuring transparency in the funding of projects which receive both national lottery and government funding in relation to—

      (i)   accounting practice, and

      (ii)   public announcements.

    (2)   Before issuing guidance under subsection (1), the Secretary of State must consult—

      (a)   the distributing bodies;

      (b)   bodies (other than public or local authorities) whose activities are not carried on for profit;

      (c)   the national Lottery Promotions Unit; and

      (d)   representatives of local government.

    (3)   Guidance issued under subsection (1) must have regard to the 1998 Compact between the Government and the Voluntary and Community Sector.

    (4)   Guidance under subsection (1) shall not be issued unless a draft has been laid before and approved by resolution of each House of Parliament.

    (5)   The distributing bodies shall report from time to time on how the guidance issued under subsection (1) has been taken into account.”.’.—[Mr. Don Foster.]

Brought up, and read the First time.

Question proposed [this day], That the clause be read a Second time.

1 pm

Question again proposed.

The Minister for Sport and Tourism (Mr. Richard Caborn): Before lunch I was trying to explain to the Committee that the new clause is very reasonable. I shall resist it because it has one or two flaws, and it was badly argued by the Opposition. They did not do the clause any justice at all.

Our approach is very much in line with the thinking out there from the general public as reflected in the consultation. During all the consultations, it was true that people wanted additionality. It was part of the intention in the mid-1990s when the lottery was set up
 
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and broadly speaking, all Administrations have adhered to it. The protection regarding sports, the arts and heritage exists now and will do so in future.

As an aside, several hon. Members argued about Government direction. That has to be considered carefully. Let us consider the amount of money that the constituents of the hon. Member for Bath (Mr. Foster) received from the New Opportunities Fund. I do not know whether he wants us to withdraw it because it is politically incorrect, but we will do if he desires that. The project was for Bath and North East Somerset council to provide school pupils and local partners with secure and accessible flood lighting and hard court surfaces. The facilities have increased participation in a wide range of sports including soccer, hockey, basketball, tennis and netball.

Mr. Don Foster (Bath) (LD): Will the Minister confirm that I heard him absolutely correctly when he said that if I wanted those projects withdrawn, “we will do if he desires that”? Is that not the clearest indication we have ever had of the Government’s willingness to interfere in lottery decisions?

Mr. Caborn: If the hon. Gentleman allows me to complete my explanation I was going to say “after consulting NOF”, but I was only half way through the explanation. The hon. Gentleman is a true Liberal Democrat because he wants to shoot from the hip all the time. That is the problem with the Liberal Democrats; they never think things through. I shall continue to show what this politically incorrect Government have done for the hon. Gentleman’s constituents. The facilities have benefited 1,400 students, and through partnership will benefit 3,500 community visitors in the first year. I shall consult NOF and see whether it is achieving its target. If not, the hon. Gentleman can write to me and I will get the funds withdrawn. Obviously, as a Liberal Democrat he wants to be purer than pure.

There is also a long list of the—politically incorrect—investments in East Devon; Littleham primary school parent teachers and friends association, Maytree pre-school, Bassets farm pre-school and so on.

Mr. Hugo Swire (East Devon) (Con): How much?

Mr. Caborn: The awards to enable pupils to sit in a range of extra-curricular outdoor activity come to £5,000. The cost of pre-school activities and play areas is £5,000. The group providing preschool education costs £1,200. [Interruption.] I shall continue with this politically incorrect list of investments so that everyone can hear it.

In the Isle of Wight, £279,000 has been provided for sports facilities, which will affect 1,500 pupils in the first year and 1,000 community users. If what was said this morning was anything to go by, anyone would think that investments, which were supposed to be politically correct, were made only in Labour constituencies in inner-city areas. I suggest that all hon. Members have gained advantage from the community programmes provided by the New Opportunities Fund.


 
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Mr. Swire: This is confusing because the Minister, typically, is trying to sell these sums as if they were Government largesse when they come from lottery funding, which is exactly the problem. As the Minister has got his civil servants to crawl over all these grants—rather limited grants in the case of East Devon—would he share with the Committee how many of a similar nature his own constituency received?

Mr. Caborn: I do not have that information. I shall write to the hon. Gentleman and put it on the public record.

John Mann (Bassetlaw) (Lab): Not enough.

Mr. Caborn: My hon. Friend says it is not enough.

Mr. Andrew Turner (Isle of Wight) (Con): Since the Minister is being so generous, perhaps he could write to me with details of what largesse my constituency has received from the lottery fund. I would be truly grateful for that information.

Mr. Caborn: The information will be winging its way to the hon. Gentleman over the next couple of days and I think that he will be quite shocked at the results. May I now get down to the serious matter of discussing the new clause?

Mr. Turner: Since the Minister has mentioned my constituency, will he make it clear—as far as I can tell, it was not clear even to those who arrived on time; I apologise for arriving a moment or two late—exactly what point he was trying to make? It did not seem to counter any of the points made by the Opposition during the debate.

Mr. Caborn: That does not surprise me at all. Anything that I have said during the Committee will not have countered anything that the hon. Gentleman has said. This morning’s discussion on additionality highlighted the idea that there seems to be a draconian attitude and that investment—through the New Opportunities Fund—had a political direction and seemingly never went anywhere else apart from Labour constituencies. The debate could be interpreted like that. I am entitled to put that interpretation on it. I just thought that it would be interesting for the Committee to know the spread of the benefits that many constituencies, including those of the hon. Members on the Committee, have received for their constituents. I hope that they are grateful to NOF for that type of direction.

Mr. Foster: I know that the recipients of many of the projects in my constituency to which the Minister referred are indeed grateful. However, since he earlier accused us of concerns about pedantry, will he explain, in pedantic language if necessary, what in anything that I or the hon. Member for East Devon (Mr. Swire) said led him to infer—to imply, to imagine, to think—that we had somehow referred to the issue of Labour constituencies?


 
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The Chairman: Order. The hon. Gentleman invites the Minister to rehearse discussions that have already taken place. He may wish to do that; I do not.

Mr. Caborn: As always, I shall comply with your sound and perceptive directions, Mr. Gale. As we know, this is what we have had to deal with throughout the Committee. I will now revert to the discussion of new clause 1.

New clause 1 seeks to insert a requirement for the Government to provide legislative guidance to distributors on the extent of their independence from the Government, what constitutes additional funding and how that should be reported. It seeks to ensure that the guidance should be drafted only after further consultation with a number of bodies, including as provided for in the 1998 compact between the Government and the voluntary and community sector. The new clause seeks to ensure that the guidance should be subject to approval by a resolution of both Houses of Parliament.

I think that I understand what is behind the new clause. Lottery money is special and should add to, not substitute for, Government expenditure. That bears out what we know from wide consultation: people see lottery money as public money and as different from money raised through taxation. They see it as money that should be spent on different things—things that taxes cannot fund. That makes it even more important that lottery funds be used effectively, reflect public priorities and enhance spending in key areas, whether the source is the private or public sector.

There was an implication that quite a lot of the investment in sport had gone through local education authorities or local authorities. I do not think that there is anything wrong with that. It does not mean that the investment cannot be additional. Many local authorities are incredibly creative, not only in providing facilities themselves but in getting into key partnerships with the private sector. I want to encourage that. That was borne out by the results of the consultation.

Adam Afriyie (Windsor) (Con): During our proceedings, the Minister has been careful to give specific and detailed definitions of the new powers taken on by the Secretary of State. I do not understand why he refuses to define the principle of additionality in the Bill or to accept new clause 1. It would simply clarify a matter about which there is uncertainty and put it to rest.

Mr. Caborn: To be honest, that would not be true. Instead, we would have a bank of lawyers discussing the matter. I agree that, wherever possible, we can be helpful in ensuring that the reality and the public perception is that additionality is working. I hope that what I will say later will help with that. However, what the hon. Gentleman described would be the wrong way of doing things because we would finish up in the courts and the interpretation would be a lawyers’ paradise. That is always the difficulty. It was the difficulty with previous Administrations, as it has been with this one. The question is how we can get the best out of lottery funds; ultimately, a judgment is required.
 
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We believe that that judgment has been consistent through all Administrations, but I shall come to that in a moment.

We as a Government are strongly committed to ensuring that lottery grants are additional, so new clause 1 is not necessary. The Government are responsible for establishing a framework for the national lottery. Such a framework has already been achieved through legislation and policy directions that stipulate that lottery distributors should operate at arm’s length from the Government, empower distributors to establish programmes and make decisions on individual applications without Government interference or intervention, and require distributors to ensure that they target awards at the areas and the people who are most in need of them. Distributors are well aware that lottery money should not substitute for money that should be raised through taxation.

By seeking to define “essential” and “desirable” Government expenditure—I assume on the basis that only the latter would be eligible for lottery funding—new clause 1 risks burying lottery distributors and their lawyers in a mire of bureaucracy.

Mr. Walker: My hon. Friend the Member for East Devon (Mr. Swire) mentioned cancer services funded by the New Opportunities Fund. Is the Minister suggesting that if the fund had not come up with £90 million—I believe that was the figure my hon. Friend gave—that community would not have received services to prevent and treat cancer? Surely, cancer treatment is a core responsibility of the national health service and should not be funded from any form of lottery money whatsoever.

Mr. Caborn: That is true. I do not know the specific circumstances of that case, but there is no reason why additional money cannot be provided for a service. There may well be a requirement to deliver, and that can be delivered, but there may also be additional funds. Take the example of sports facilities. There are general sports facilities, but value can be added through additional spending, whether from the lottery or the private sector. Sainsbury has done a fantastic job in helping with school playgrounds. Fine, the playgrounds were already there, but the additional use of them as a result of the additional investment put into them is very welcome. That is not to say that without that investment the kids could not play and kick a ball around. They could, but they can do it in a better environment than they had previously. That is additional. I do not know the exact circumstances of the case to which the hon. referred—I can look into it—but that is the argument about additional.

Mr. Swire: The Minister, either advertently or inadvertently, stumbled across his definition of “additionality”, and it is very different from ours. Apparently, additionality means using lottery money to top up Government spend. We would argue that that invites blurring of the lines. We define additionality as spend that is completely different from
 
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the Government spend. It should not replace core Government expenditure. A clear difference is opening up, and the Minister has summed it up well.

Mr. Caborn: And the hon. Gentleman has summed up why we are not prepared to start defining additionality. He and I can disagree about it, but what will happen in the law courts? As I said, a definition would create a lawyer’s paradise. All sorts of actions will be taken about all sorts of distributors and we will get nowhere at all. That is why we have taken the common-sense approach in the Bill. I accept that we must give Parliament a base on which to have an informed debate, and I shall come to that, but the past few minutes have showed exactly why we are not prepared to put in the Bill or any other place a definition that would allow lawyers to start taking everybody to court.

Adam Afriyie: There seems to be doubt. Proposed new subsection (1) would provide guidance on

      “(b) the distinction between essential and desirable government expenditure;

      (c) the distinction between core central government expenditure and lottery funding;

      (d) the distinction between local government expenditure and lottery funding”.

If £1 was given by the Government for a core Government expenditure such a new NHS hospital and £999 was given by a lottery fund, would that be an acceptable breakdown?

1.15 pm

Mr. Caborn: I am not prepared to go down that road for the reasons that I gave. I can just imagine the hon. Gentleman and I arguing the matter in court. If there was a definition, the result would be one constituent versus one lottery fund in a lawyers’ paradise. The discussion this afternoon shows the reasons why we do not want to define the term in any way.

Let me proceed, because what I say should be genuinely helpful to the Committee and the House and will make sure that debates about additionality can be taken in the round, and not focus on the specific. If we get down to specific cases, such as cancer services or a school playground, there is a danger of litigation. We politicians are setting out a broad framework, which it is for distributors, not politicians, to operate. The distributors are arm’s length bodies whose members are appointed because of their knowledge, skills and wisdom to distribute funds in the way that our consultation on the lottery demands.

A definition would result in bureaucracy, which would require distributors to fund only projects that fell within a strict and necessarily narrow definition and would negate the many improvements that have allowed distributors to offer excellent joint schemes such as awards for all, which offers simplified applications and quicker decision-making processes designed to encourage those who are most in need to apply and to benefit. I firmly believe that distributors must have the flexibility to support innovative projects and the opportunity to get involved in something to which they can really add value. Trying to anticipate
 
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what sort of projects might be supported necessarily results in the imposition of restrictions limiting the extent to which they can add value.

The new clause proposes that the Government be required to consult specific bodies, including not-for-profit organisations—a very general term. It also requires the Government to have regard to the 1998 compact on relations between the Government and the voluntary and community sector in England. By so doing, the new clause proposes legislation in an area in which we believe it is simply not necessary. Distributors and the Government already consult widely—even more widely than is anticipated under proposed new subsection (2) of the new clause, which I see does not include members of the public. As I have said previously, our aim is to adhere fully to the 1998 compact. That is why I recently met representatives from the voluntary and community sector to explain how the new arrangements will work and, in particular, how we will preserve additionality.

My officials and representatives of the lottery distributors already meet and consult widely with the voluntary and community sector. That is not a sham; it is real consultation. Recently, as well as holding one-to-one consultations we have tried to make sure that the consultation is as wide and as informed as possible. We are indebted to a number of voluntary and community sector representatives for assisting the Big Lottery Fund-led project team by commenting on and testing an improved website and helpline facilities for potential lottery grant applicants. We are trying to ensure that there is a one-stop shop and that the process is much more user-friendly. Their input will help to ensure that the new facilities, which are to be launched early next year, meet the needs of those whom they are intended to benefit.

The new clause would also require distributors to report from time to time on how they are taking such matters into account. We are already working with distributors to ensure that failed applicants get the feedback they want on their applications and that the criteria for successful grant applications are made clear when programmes are launched.

At the meeting between the voluntary and community sector and myself to which I referred earlier, the chief executive of the Big Lottery Fund, Stephen Dunmore, agreed to produce an annual report showing how the additionality principle had been observed. We had an extensive discussion around the table in my office. Concerns were expressed then, and have been again in our debate today. Stephen Dunmore said that he would produce an annual report, which I have agreed will go before both Houses of Parliament and which will be a well-founded source of information that can be used by individuals, by Select Committees and by hon. Members for scrutiny.

Having the matter quantified in the broad annual report is a step in the right direction. One swallow does not make a summer; we have to be careful not to predicate the whole of a policy on one isolated case. We are trying to produce an annual report that, in the round, shows how funds have been used for good causes and how they are additional to other
 
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expenditure. Stephen Dunmore is keen to ensure that that happens and it is important to the lottery’s integrity.

Mr. Swire: I do not follow the logic of placing an annual report on additionality in the Library of the House of Commons when the Minister and the Opposition cannot decide what they mean by additionality. We are fundamentally in disagreement, so what on earth is the purpose of that report? What will it report on? We do not know how the Minister is going to define additionality.

Mr. Caborn: Let me spell it out in words of one syllable: we are going to produce a report of which additionality will be a part. We are always in danger of focusing on one area of this issue without looking at it in the round.

Mr. Swire: We are debating additionality under the new clause.

Mr. Caborn: I know what we are debating under new clause 1. I am just trying to inform the Committee of how we came to our position. I had a discussion in my office with the voluntary sector and the chief executive of the Big Lottery Fund. He was trying to be helpful by saying that in his annual report he will try to make sure that, from his point of view, the principles of additionality are quantified.

It is not good not to have additionality. The chief executive and the board are the custodians of the money and how it is distributed, and the board is responsible to Parliament through the chief executive, who is the accounting officer. In his report, he will try to quantify and describe how the board believes it has delivered what we in Parliament have asked of it.

Adam Afriyie: Will the Minister explain how anybody can report on something that is undefined?

Mr. Caborn: Somebody has to define the concept for the purpose of day-to-day operations, but if the concept were tied down to a definition that would be challengeable in law, those funds might be put into all types of litigation. [Interruption.] Let me explain this very serious point. We believe that if we took certain courses of action, we would create a lawyers’ paradise. As previous Administrations have done, we believe that the best way forward is to put the fund at arm’s length from Government, which we have done, and to make it accountable back to Parliament, which it is. The broad direction given to the independent people working at arm’s length from Government is to receive applications and apply the principles that Parliament has asked them to apply. They report back to the Government in an annual report. The accounting officers are also responsible to Parliament through the Public Accounts Committee.

There are a number of checks and balances. How those people apply the principle of additionality or deliver on the rest of their remit’s broad themes—in the case of the Big Lottery Fund, those are health, education and the environment—is always open to scrutiny by Parliament. That scrutiny should continue to be carried out by Parliament rather than the courts
 
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of law, where we believe the whole thing would get bogged down and could be very expensive and time-consuming.

 
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