Tom
Levitt: I am grateful to my hon. Friend, who has made a
significant announcement. I hope that he will answer the other point
that I raised earlier: the review must be able to achieve something. If
it is dealing with a voluntary code established by a group of
volunteers who are running the scheme, it is difficult to see what
teeth the review might have to change the direction if necessary. I
would not exclude giving the review the power to recommend that the
scheme be made mandatory. I do, however, share his concern that we
would not want to go back to primary legislation to implement whatever
was recommended by the review. I welcome what he has said but it needs
to be a review that can make changes that are necessary. I accept that
a sledgehammer is not an appropriate tool to crack a nut; neither is a
feather.
Ian
Pearson: I agree with my hon. Friend. We should not commit
to reviews and mention them in Bills, when they will be just exercises
that take up administrative time and do not produce anything positive.
I would expect the review to be a thoroughgoing analysis that would
lead to action that produced change, within the confines of the
legislative framework and the powers available to the Government
through what will by then, hopefully, be the dormant bank and building
society accounts Act. With that and the commitment that I have made in
mind, I hope that hon. Members can support me in agreeing that clause
12 should not stand part of the Bill.
Question put and
negatived. Clause
12 disagreed
to. Clauses
13 and 14 ordered to stand part of the
Bill.
Clause
15Banks
making transfers under section 2: information in directors’
reports Question
proposed, That the clause stand part of the
Bill.
The
Chairman: With this it will be convenient to discuss new
clause 1— Building societies making transfers under section 2:
information in directors’
reports— ‘(1)
Where— (a) the directors
of a building society are required by section 75 of the Buildings
Societies Act 1986 (c. 53) (Directors’ report) to prepare a
report for a particular year,
and (b) in that year the
building society made transfers in relation to which section 2
applied, the report must
identify each of the charities concerned and specify the amount
transferred to each of
them. (2) The requirements of
subsection (1) are to be treated for the purposes of the Building
Societies Act 1986 as requirements of that
Act.’.
Mr.
Hoban: New clause 1 stands in my name. Having further
considered the new clause and the explanatory notes to the Bill, I feel
that the new clause is sadly redundant, although it was very well
drafted. What I do not understand—the Minister may be able to
help me out—is why the provisions referring to building
societies are not in the Bill, whereas those relating to banks
are.
Ian
Pearson: The situation is as the hon. Member for Fareham
suggests. We believe that the new clause is unnecessary. The
explanatory note on clause 15 states that the Treasury intends to amend
the regulations—made under the Building Societies Act
1986—that deal with building society accounts and reports, so
that they include the same requirement to report on participation in
the smaller institution scheme. The answer to the hon.
Gentleman’s question is that where a regulation-making power,
under which the relevant provisions can be made, already exists, it is
normal practice for that power to be used, rather than making a new
power with primary legislation. That is why we are explaining what we
are doing using that power, and that is why that detail is in the
explanatory note rather than in the
legislation. Question
put and agreed
to. Clause
15 ordered to stand part of the
Bill. Clause
16 ordered to stand part of the
Bill. Schedule
2 agreed
to.
Clause
17Distribution
of dormant account money by Big Lottery
Fund
Mr.
Hoban: I beg to move amendment No. 29, in
clause 17, page 9, line 17, at
end insert— ‘(4A) Any grant
or loan made under subsection (1) must
not— (a) replace or
substitute for government or local authority
expenditure;
(b) subsidise or provide part of the costs for a
service that is provided on a contract basis for a statutory
body; (c) replace statutory
funding that has been withdrawn or is in danger of being withdrawn;
or (d) duplicate services that
a statutory body currently
provides.’. The
amendment tries to establish, in a not very elegant fashion, the
principle that the money from the reclaim fund is in addition to
Government spending. That is important. People whose money will be
transferred from their dormant accounts to the reclaim fund and then to
the Big Lottery Fund will want to know that that is not a substitute
for Government expenditure, that it is increasing the resources
available for youth services or for financial inclusion. There is no
guarantee of that in the Bill. If the choice of the three causes in
England had been different, the concern might not be relevant. The
problem arises because there is Government expenditure on the provision
of youth services, and councils already spend money on it. Financial
inclusion is a significant priority not only for the Minister’s
Department, but for the Department for Children, Schools and Families
and the Department for Work and Pensions. I have looked at Government
output and know that money is spent on this
area. I
do not believe that any Member of this House would want to see the
money that taxpayers contribute to financial inclusion drop from
£12 million this year to £10 million next year because
the Government know that £2 million will come in from dormant
accounts. If an additional £2 million comes in, we want to see
£14 million spent on that cause so that there is a
boost in spending. I have not touched on the social investment fund in
the context of additionality because I do not believe that the
Government are currently providing that capital to a social investment
wholesaler. I
hope that the Minister understands our concerns. Our argument is that,
if this funding comes on stream part way through a comprehensive
spending review period, it will be easier to check the additionality
because the spending plans will be set out in the CSR. Given that the
current CSR will expire at about the time this money comes on stream,
it would be very easy for the Government to set their spending
priorities taking into account the money that will flow from the
scheme. With the amendment, we are looking for confirmation from the
Government of the mechanism that they will use to ensure that the money
is genuinely
additional. Another
problem relates to the Big Lottery Fund, which will be the distributor.
It does not give money only to voluntary organisations. That would be
one way of ensuring that there were additionality. Having said that,
there are even difficulties in that area because on the financial
inclusion front some Government money goes to Citizens Advice, which is
a voluntary
body. At
the start of the CSR period, the Government could decide to reduce the
amount of money that is spent in the affected areas in the knowledge
that the business plan of the reclaim fund suggests that
£10 million or £20 million a year may go to
the three causes, as stipulated in the Bill. There is a concern about
the additionality of this money and it was not satisfactorily addressed
in the other place. Lord Howard tabled an amendment to try to achieve
an end of this sort.
Kerry
McCarthy (Bristol, East) (Lab): I entirely understand
where the hon. Gentleman is coming from and I appreciate the intention
behind the amendment. I am keen to ensure that there is no such element
of substitution. Local authorities rightly make decisions on whether to
fund new projects or carry on funding existing projects. It would be
difficult to implement the amendment without tying the hands of local
authorities and saying that they must continue to fund existing
projects. If they withdrew the funding for an existing project, they
would not be able to use the new money to replace it. I am concerned by
the
practicalities.
Mr.
Hoban: I do not dispute the challenges behind this
proposal. However, I do not want a situation in which a local authority
decides to withdraw funding because it knows that money will come. That
is why new subsection (4A)(c) in the amendment states that the money
must
not “replace
statutory funding that has been withdrawn or is in danger of being
withdrawn”. It
would be easy for a local authority to decide not to fund a youth club,
a youth group or a financial inclusion project in its area in the
knowledge that it will be bailed out by the Big Lottery Fund. That is a
challenge. The Big Lottery Fund currently gives money to local
authorities that might in a way be substituted by some of the money
that will come through the scheme. Additionality is critical to the
Bill because people want us to spend more money on these priorities,
not to substitute the money from dormant accounts for Government
money. 4
pm One
of the original objectives of the national lottery was to try to
increase the money available to community organisations and voluntary
groups. That purpose has been diminished somewhat because money from
the Big Lottery Fund goes to meet some Government priorities. There is
a sense that if this creeps into the allocation of money from the
reclaim fund, there will be no augmentation of the resources available:
the same money will be spent but will be funded from different sources.
We want some assurance from the Minister about how he believes the
scheme will work in practice to ensure that additional money is found
and this is not a
substitute.
Mr.
Field: My hon. Friend has got is absolutely right but I
fear that the pass has already been well lost on this matter.
Immediately after my hon. Friend succeeded me as the shadow Financial
Secretary to the Treasury I had the joy of spending a year on the arts
and culture brief, one of the elements of which was the National
Lottery Act 2006. As my hon. Friend rightly points out, at the outset
the national lottery was designed with four heads in mind: arts,
charities, heritage and sports, as well as the millennium fund in the
run-up to and immediately after the turn of the century.
The 2006 Act
set up the Big Lottery Fund. There are some very good people working
there. I cast no aspersions on their work, but there is little doubt
that the whole issue of additionality and substitution was cast to one
side by the Government at that time. Time and again we warned that
setting up the Big Lottery Fund would move away from the initial heads
for lottery funding. I fear that is precisely what will happen with the
Big Lottery Fund taking over the issue of dormant accounts.
It will inevitably be assumed that a certain amount of money will come
from these dormant accounts each year and there is a worry that it will
not therefore be additional. There will be an element of substitution,
particularly when Government spending at local or national level is
likely to be tight in the years to
come. The
Big Lottery Fund, which now spends over half of the lottery funds that
are distributed, does so according to one or two of the original
objectives when the lottery was set up nearly a decade and a half ago.
It also spends, as the Minister will be well aware, significant sums in
areas such as health, education and other promotional elements, which
would usually be expected to come from general Exchequer funding. The
worry here is that there will not be that sense of additionality in
some of the funding and some of the proposals that the Big Lottery Fund
will have in mind in its distribution policies. I fear that by passing
it on to the Big Lottery Fund, we will not be in any position to
monitor it
properly.
Tom
Levitt: The hon. Gentleman will be aware that the Big
Lottery Fund has always denied the Conservative party’s
allegations of breaches of the additionality rules. However, there is
an acceptance that a lot of Big Lottery Fund funding goes into
partnerships that may involve statutory bodies, but that does not mean
that the funding itself is not additional to that being provided
through statutory measures. I believe that Conservative party policy
would be to reduce that part of Big Lottery Fund funding which does not
go directly into the so-called good causes—the charities. That
would reduce by about 16 per cent. the money that it puts out. It would
damage the partnership funding. I accept that on paper that may be a
grey area, but does the hon. Gentleman not accept the undertakings and
the assurances that the Big Lottery Fund has given that additionality
is maintained in its
actions?
Mr.
Field: I do not entirely accept those undertakings. It is
extremely difficult. The hon. Gentleman used the phrase “grey
area”. I would use the phrase “muddying the
waters”. It comes to the same thing. Clearly there is a level of
uncertainty about whether funds will be additional. Given the
difficulties we will face in relation to public expenditure and the
difficulties at local government level with the various partnerships to
which the hon. Gentleman refers, there will clearly be confusion. It is
therefore important that we have this
debate.
Mr.
Hoban: I shall give my hon. Friend an example of that
confusion. The Big Lottery Fund recently took me on a tour of projects
in my constituency. One project was to provide funding to the borough
council for play opportunities, which is a good example of the
potential for problems. Would the borough council have spent money from
its own resources on play opportunities or was it additional? That is
where the problem comes from; once one starts to fund what could be
seen as a statutory or a Government priority, one starts to lose the
clarity about whether the funds are
additional.
Mr.
Field: My hon. Friend gets it absolutely right. The
concern is simply that the local authority often has obligations, and
it may start a new programme, part of which supersedes an existing
programme, in partnership
with the Big Lottery Fund. For example, I was in my constituency
yesterday visiting a Home-Start UK programme—a part voluntary
project with young mothers in the community. There is little doubt that
an equivalent programme had been in place in the past, but it had been
rebranded as Home-Start and had benefited from Big Lottery Fund
funding. Our concern is that there are grey areas, which is why this
debate is worthwhile.
Tom
Levitt: I do not know of an equivalent body to Home-Start
UK. It is a magnificent organisation for the families that it helps. I
conceded that there was a grey area, but I think that it is a small one
and it is inevitable in partnerships with statutory funding and
non-statutory funding. Does the hon. Gentleman accept that those
partnerships and joined-up funding can be more effective in delivering
socially advantageous programmes than they could be if the two were
funded completely separately and never the twain should meet?
Conservative party policy, by not funding partnerships, would make the
Big Lottery Fund less effective in the way that it helps our
communities.
Mr.
Field: I do not accept that, although I do accept what he
said before. Clearly, joint funding is often the most beneficial method
for our constituents. The question is where that public funding should
come from. The initial idea was that the national lottery would be a
ring-fenced fund. I trust that there is a hope that the dormant funds
will not simply be used to substitute funding from cash-strapped local
or national Government, but will provide additional funding in the way
envisaged in the clauses that we will come to shortly. I hope that the
Minister will give some credence to what my hon. Friend has said. It
has been worthwhile to put on the record that we have expressed some
very deep concerns, not least because there is likely to be some
confusion as the waters are a little
muddied.
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