Ian
Pearson: I appreciate the probing nature of the amendment,
which would impose a cap on the costs that the BLF can defray to limit
its administration charges to 5 per cent. of the dormant account
funding transferred to it. Although I appreciate and share the concern
about the effective use of public funds that no doubt motivated the
amendment, I hope that hon.
Members will recognise why it is important that the scheme’s
ability to operate is not constrained by a rigid and arbitrary
cap.
I do not
think that the issue is as straightforward as the hon. Member for
Fareham suggests. I want the BLF to be as effective and efficient as
possible at delivering money to the good causes to which it has been
allocated through the dormant account funding mechanism. I do not want
money to be delivered at the lowest possible cost, because in areas
such as working with young people, I want the BLF to talk to young
people and discuss their needs, rather than simply concentrate on
throwing money out the door in as simple a process as possible, with
limited checks. I do not think that anyone really wants that.
We want to
ensure that the BLF’s costs are properly controlled and that it
is held accountable for them. Its costs have come down across its
activities. As set out in its 2007-08 annual report, it currently
spends about 9.1 per cent. of its income on operating costs.
It operates a portfolio approach to funding, with commitments being
made over three years and payments being made over five years or more.
As a consequence, it requires some flexibility to administer its budget
over a longer-term cycle. That is a practical reason why an annual cap
on its costs would inhibit that activity. I reiterate that I appreciate
the probing nature of the amendment.
We want the
BLF to approach its distribution of dormant account funds with a
similar thoroughness to the way in which it assesses individual grant
applications and to its work in developing partner relationships with
the projects that it funds and supports. That applies to small-scale
projects as much as to larger ones, which often involve more
administration costs to support them in getting up and running. We
expect the BLF to consult young people, so that they are actively
engaged in shaping bids for community resources. That is a worthwhile
activity, but intensive effort and sensitive handling are required to
manage it appropriately.
I agree that
it is important that the BLF is able to operate with effective scrutiny
and that its ability to assess and support bids is not constrained. I
am aware that, in the other place, the lords drew comparisons between
the BLF and other organisations. I am sure that the Committee would be
interested in this year’s National Audit Office report,
“Making grants efficiently in the culture, media and sport
sector”, which shows that the BLF’s costs compared
favourably with public sector funders and other funders in the
voluntary sector. Nevertheless, there is no room for complacency, and
we expect it to work effectively and efficiently and to ensure that as
much of its available resources as possible are distributed to
front-line organisations. The hon. Gentleman and I share that
commitment. Under
the National Lottery etc. Act 1993, the BLF is legally required to
comply with provisions for a statement of financial requirements issued
by the Government. That makes clear its responsibility to ensure its
finances are managed appropriately. However, it is properly the
responsibility of the accounting officer for the relevant
Department—in this case the Department for Children, Schools and
Families—to be sure that the administrative costs incurred were
appropriate, as part of the overall duty to make effective use of
public funds. It is also the
responsibility of the accounting officers of the devolved
Administrations to do the same in respect of their relevant
functions. I
assure hon. Members that an accountability framework is in place and
that we are satisfied that the requirements and responsibilities under
that framework will be sufficient to ensure efficient and effective
allocation of resources. If there is any doubt about the BLF’s
future efficiency and effectiveness, I would draw hon. Members
attention to the power in clause 25 that will enable the Government to
add or remove distributors of dormant assets. On that basis, we think
that the Bill already allows for sufficient checks to ensure the
efficiency and effectiveness of distribution. I hope that the hon.
Gentleman agrees and will withdraw his
amendment.
Mr.
Hoban: I am grateful for the Minister’s thoughts on
the matter. I suspect that the Secretary of State’s powers under
clause 23(5) to give directions
on “the
management and control of money received by the
Fund” might
also be used where the Government do not want to take the nuclear
option of changing the distributor and to give some guidance to the BLF
on how it spends the money allocated to it and how it uses it to pay
its administrative costs.
The BLF has
always indicated to me that it came out very favourably from the NAO
report on the efficient use of money and that it compares well with
other grant-making bodies. It is important to ensure that the BLF and
the Government recognise the importance of keeping costs to a minimum
to ensure that as much money as possible gets through to the causes;
otherwise we might not see quite as much money as expected coming
through. However, on the basis of the Minister’s comments, I beg
to ask leave to withdraw the
amendment. Amendment,
by leave,
withdrawn. Clause
18 ordered to stand part of the
Bill.
Clause
19Distribution
of money for meeting English
expenditure
Mr.
Browne: I beg to move amendment No. 5, in
clause 19, page 10, line 28, at
end insert— ‘(1A) The
Secretary of State may, by order, amend the distribution areas listed
in subsection (1). (1B) An
order made under subsection (1A) may not be made unless a draft has
been laid before, and approved by a resolution of, the House of
Commons.’.
The
Chairman: With this it will be convenient to discuss
amendment No. 32, in
clause 19, page 10, line 34, at
end add— ‘(3) For the
purposes of making a distribution under subsection (1), each of (1)(a),
(1)(b) and (1)(c) should rank
equally.’.
Mr.
Browne: This is a sad moment for me, because this is the
last amendment that I have tabled to the Bill, although I shall no
doubt find some remarks to make on other items before business is
concluded. Amendment No. 5 is untypical of my other amendments, because
in an amazing spirit of charity, I am seeking to give the
Government a little more flexibility by allowing the Secretary of
State—the Government have appointed the Secretary of State for
Children, Schools and Families as the responsible Minister, rather than
a Treasury Minister, which some members of the Committee might find
curious—to amend the three areas in which the dormant accounts
money can be distributed by the BLF. Those three areas relate to young
people, financial management and financial inclusion. I see merit in
having the scope to modify the largesse, if public demand so warrants
and Ministers feel that it is appropriate. That is the purpose of
amendment No. 5, but the Minister might feel that I am being unduly
generous. Amendment
No. 32, which was tabled by the hon. Member for Fareham, makes a
reasonable point. Unless I have missed something, throughout the
debates on the Bill, the Government have been rather vague about the
amount of money to be allocated to each of the three areas identified
as priorities. We have been led to believe, not only because the lead
Government Minister is the Secretary of State for Children, Schools and
Families but because of the emphasis in the comments made by Treasury
Ministers, that the primary area that will benefit relates to young
people.
Of course,
young people may benefit under financial management and financial
inclusion provisions too, but projects specifically aimed at young
people appear to be the main thrust of what is being proposed by
Ministers. However, I understand that nothing in the legislation
specifies that. Of course, that makes quite a big difference; people
who are involved in an organisation that is solely concerned with
advancing the interests of young people might be enthusiastic about the
Bill because they think that 90 per cent. of the money will go to young
people and only 5 per cent. to financial management and 5 per cent. to
financial inclusion. They will celebrate if the Bill is passed. If the
Government then turn round and say, “Actually, we are only
envisaging 1 per cent. going to young people, 1 per cent. to financial
management and 98 per cent. to financial inclusion,” those
people may feel that they were sold something slightly
different to what they thought was the case when
the legislation went through all its stages in both Houses of
Parliament.
Therefore,
although I think that my amendment is a charitable one, I am big enough
to say that the more important and interesting amendment of the two is
amendment No. 32. I do not necessarily follow the argument that the two
amendments should be equally weighted, so I would not necessarily
support amendment No. 32. Nevertheless, I think that the issues that it
raises
are—
Mr.
Field: Hedging, as
usual.
Mr.
Browne: I leave hedging entirely to the people of
expertise in the City and the Conservative party.
I would not
necessarily support an equal distribution—one third, one third,
one third—but the onus is on the Minister to try to indicate,
preferably in legislation but at least orally to the Committee, what he
sees the division
being.
Mr.
Hoban: May I first address my remarks to amendment No. 5?
There is a very clear logic to that amendment, which was tabled by the
hon. Member for Taunton. Clause 12 was removed from the Bill because
the Government did not want a triennial review in perpetuity, yet we
are casting in stone for perpetuity—until time ends—that
these are the three priorities for that money. A point may arise at
some time in the future when the Government wish to change those three
priorities, but they would then have to introduce primary legislation
to change them, so the hon. Member for Taunton may have done the
Government a service by pointing out this gap in the Bill.
Regarding
amendment No. 32, I am not sure that I would support it either, if it
went to a vote. I tabled it for the very reason that the hon. Member
for Taunton gave; there is nothing in the Bill that tells us how the
money will be spent, or what priorities will be given to the various
projects. I assume that the order in the Bill reflects the order of
spending and that more will be spent on A than on C. However, what I do
not know is how much more? Is it just a fraction more? I also do not
know how the Government will determine the priorities.
A very clear
signal has been given by the fact that, in our debates, the lead
Secretary of State has been referred to as the Secretary of State for
Children, Schools and Families, who, in an earlier incarnation, gave
evidence to the Treasury Committee’s inquiry into unclaimed
assets—I will come back to that inquiry in a minute, because I
think that we can see where the order of priorities comes from, judging
by the Secretary of State’s evidence to the Committee. That
suggests that the main area of expenditure will be, as the clause puts
it, on
“the provision
of services, facilities or opportunities to meet the needs of young
people”. However,
it would be helpful for the Committee and outside bodies to understand
just what weighting will be given to that priority in comparison to the
other two. Some people out there will be interested in knowing that.
They may wonder if they can apply for funding under those streams. The
Minister may reply that we will have to await the strategy produced by
the Big Lottery Fund for England to know what the priorities are, but
it would be helpful to signal the order at an earlier
stage. The
third priority will be left in quite a difficult position. The Treasury
Committee’s report on unclaimed assets gives a very clear steer
that the social investment wholesaler will need a significant endowment
to function properly. The conclusion to the report
states: “We
find the concept of using gearing to multiply the potential impact of
unclaimed assets attractive when compared to more traditional
grant-giving distribution methods. We have been told that the Social
Investment Bank needs minimum funding of £330 million over five
years for it to be viable, but we do not, at present, see any sign of
the Government committing resources to social investment of this scale.
We believe that the Government cannot will the ends if it does not will
the means. We want the Government to allocate sufficient resources to a
Social Investment Bank funded in part through unclaimed
assets.” The
Treasury Committee gave a clear signal. The then Economic Secretary,
who is now Secretary of State for Children, Schools and Families, also
touched upon the issue in the debate.
4.45
pm Sir
Ronald Cohen, the chairman of the Commission on Unclaimed Assets, said
that it would
be “very
difficult to get an allocation from Government for a purpose such as
this if the unclaimed assets were not
available”. The
sense was given that unclaimed assets would be the source of funding
for the establishment of a social investment bank. The suggestion is
that if the priorities are as set out in the Bill, there will not be
enough money available from unclaimed assets to provide a sufficient
endowment. I
am not arguing for the benefits of one cause against those of another.
If we had the time or inclination to do so, we could make cogent
arguments for the proportion being divided in particular ways. We might
be able to put percentages on youth services, financial inclusion and
the social investment
wholesaler. From
the way that the Bill has been drafted and the mood music around it, I
think the problem is that most of the money will go to facilities for
young people and the third priority will get the small change. That may
not be sufficient to produce the benefit that people who support a
social investment bank believe it should have. Lord Davies of Oldham
said of this issue in another
place: “We
want to go ahead with the top two priorities but the third concept in
the clause is dependent on resources being
available.”—[Official Report, House of Lords, 15
January 2008; Vol. 697, c.
GC493-494.] That
sends a clear signal about the
priorities. There
is a lot of interest from the third sector not just in the first two
priorities, but also in the third. This debate is an opportunity to air
those issues and for the Minister to give more clarity on what he
believes might be the distribution between the three
causes.
Ian
Pearson: I will be delighted to bring as much clarity as I
can to this issue. There are two very different amendments. Amendment
No. 5 would insert an order-making power to amend English spending
areas by affirmative resolution. In reply to the hon. Member for
Taunton, we believe that the areas we have identified are important and
enduring. We have consulted on the areas and do not feel that there is
a need to change them, even in the long term. One of the reasons why
there is no need to change them is that youth services are an important
area now and for the future. I confirm that we regard youth provision
as a priority. Financial inclusion and financial capability are
rightfully areas in which the Big Lottery Fund could make a significant
difference. We clearly put it on the record in the other place and on
Second Reading that, if resources permit, we would consider funding for
a social investment wholesaler. That remains our
position. There
is still great uncertainty about the quantum of resources available to
the Big Lottery Fund in the first instance and on an ongoing basis. We
have yet to see how it will work out. We have discussed estimates of
the amount of genuine dormant assets, and it will be up to the reclaim
fund through its business plans to decide how much of those assets are
to be transferred to the Big Lottery Fund for distribution. At the
moment, there is a lot of uncertainty about the areas, and putting
rigid percentages in place would not make sense. It is right, too, that
the balance of priorities within the three
areas might need to be changed over time. I explained that the process
of making directions on spending decisions will involve a range of
Departments, with overall direction coming from the Department for
Children, Schools and Families, which reflects the priority that we
give to youth service provision. It seems a sensible way in which to
give direction and guidance to enable the Big Lottery Fund to do its
work, yet still retaining some flexibility as circumstances
change. | 
