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Let me deal immediately with one canard—and in doing so I may also help the noble Lord, Lord Hamilton, with his query. The Prime Minister was referring to government expenditure in the Comprehensive Spending Review over three years. He identified that the sum of nearly £700 million should be spent on youth services as government expenditure. During our deliberations

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we will have plenty of opportunity to explore just how we are going to do this, but we are at pains to meet exactly the point that the right reverend Prelate identified.

Lord Hamilton of Epsom: Is the Minister saying that new centres being built by unclaimed assets is not committed money, but something that will happen in the future and that none of the unclaimed assets has been pre-empted for use as a result of the Prime Minister’s statement?

Lord Davies of Oldham: Not at all. We will follow the principle of additionality. It is very important that we should, which is why we propose to set up the machinery in this way to guarantee that. Those are the principles under which the Big Lottery Fund has been obliged to operate since its inauguration under the lottery legislation.

The second point that the noble Lord, Lord Hamilton, raised was about how much we are going to spend. We are pretty vague on how much we are going to get in, and particularly before the end of 2009. The Committee will recall that at Second Reading we had a range of estimates about how much might be made available. I cannot give the noble Lord the figures, but I can assure him that they are quite separate from the £670 million to which the Prime Minister referred.

The right reverend Prelate made quite clear that we need a process of expenditure, on youth facilities in particular, that has imagination, enterprise and locality. There is a range of potential solutions to problems, some of which are idiosyncratic, but others are more general. Nevertheless, problems are addressed differently in different localities. I heard what the noble Viscount, Lord Eccles, said about the Big Lottery Fund. He was eloquent during the processes that established it, and I know he has scrutinised its operations closely. I hope I shall allay some of his greater anxieties on that score, and I shall come to that in a moment.

However, he will recognise that an advantage of the Big Lottery Fund as a distributor is that it meets the right reverend Prelate’s concern that the distributor should be seen to be active in every nook and cranny of our country and in all the component parts of the United Kingdom. There are very few organisations that have that range and capacity. That is why we identified the Big Lottery Fund as the appropriate distributor. It could not have carried out the work that it has done over recent years without being subject to criticism. One cannot be involved in the distribution of the kind of resources it commands without critics—not least those who, disappointed by the decisions, are, by definition, critics—because they rightly hold their causes dear. There always will be criticism of and challenges to the Big Lottery Fund.

I want to emphasise to the Committee that the choice of the Big Lottery Fund is directed towards the effectiveness with which we can reach right across the country. It has headquarters in England, Wales, Scotland and Northern Ireland and a great deal of devolved regional representation.

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Over this period of time it has also gained extensive experience of the third sector and public sector delivery partners, ranging from large-scale national charities through to local grass roots community groups. I take on board the point made by the right reverend Prelate on how we serve the youth of the nation. I do not think that anyone would gainsay that it is an enormous challenge for everyone in the community. It will need local and selective understanding of the problems and the allocation of resources accordingly.

On social and environmental purposes, we have identified youth services and increasing financial capability as priorities. In this day and age, we are all shocked when we see the level of financial illiteracy in circumstances where a great many clear and key family decisions depend upon an understanding of how to manage budgets and, where appropriate, savings. We are aware that this has not been a feature of British education in past years. Changes are now affecting education and, although our children are getting greater access to such education, we have an adult population which has in the past had limited exposure to these issues. So there is a great deal to be done there. The third issue is that of social investment in environmental objectives.

At this stage, I am not able to give the reassurance that the noble Viscount, Lord Eccles, seeks. I am not sure there is anyone, either in government or on the planet, who would totally reassure him about the effectiveness of the Big Lottery Fund. However, it is a significant feature in the landscape, particularly for the third sector. The distribution of lottery funds is a complicated job which is subject to significant convulsions, if I can use that word in a neutral sense—I am talking about the changes which have been effected to the resources made available to it by recent decisions—but it is difficult to identify any other organisation which could meet the necessary range of selectiveness and awareness of local situations.

The second amendment of the noble Lord, Lord Newby, would remove the flexibility to spend on one or more of the three areas; it would require some spending on all three areas. Spending will of course occur on all three areas over a period of time but at this stage we do not know the level of available resources. There will be a question of priorities and all we are ensuring within the framework of the Bill is maximum flexibility with regard to expenditure. In doing so, we are ensuring that the legislation is fit for purpose.

We are going to make clear priorities in regard to youth services and financial literacy. We are greatly interested in the innovative concepts which involve the third sector and we will address resources towards them. If we accept the noble Lord’s amendment, there will be a built-in rigidity, whereas we need flexibility in this legislation to deal with these matters.

We have several other amendments which relate to this issue. I hope that I have given a precursor of the fact that I shall be pretty robust on additionality, as I sought to emphasise when responding to the appropriate question put by the noble Lord, Lord

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Hamilton. In addition, throughout our exchanges on the lottery, we invited all those who were worried about additionality to furnish the Government with a clear, legal, enforceable and operable definition of additionality. With all their fertile and intelligent resources, the Opposition were never able to meet that challenge, which is why I am afraid the Government have been obliged to express the legislation in the way they have. However, we shall return to this issue in due course.

Lord Newby: I am grateful to the Minister for that answer. As I made clear at the start, these are probing amendments and I was not seeking to introduce any unnecessary rigidity into the legislation. I am no clearer than I was at the beginning about how the Government view the three purposes. I am also slightly unclear about the extent to which the Government envisage that they will, or can, direct the Big Lottery Fund in terms of making payments within the three heads. Clause 21 states that a direction may,

It does not explicitly say that a direction can set priorities between the three purposes. It may be, as the Minister implies, that the Government do not have the faintest idea how they will spend the money that comes in and that they will wait to see whether they get any before doing so. None the less, I would have hoped, even at this stage, that the Government might be able to give a slightly more clear indication of where their priorities lie. However, as I said at the start, these are probing amendments and therefore I beg leave to withdraw Amendment No. 51.

Amendment, by leave, withdrawn.

[Amendment No. 52 not moved.]

5 pm

Lord Howard of Rising moved Amendment No. 53:

The noble Lord said: I move this amendment in the absence of my noble friend Lord Astor. The amendment is also supported by the noble Lord, Lord Inglewood.

The amendments in this group seek to pin down Her Majesty’s Government on one issue—that is, the effect of the lottery fund raid, on behalf of the Olympics, on the original beneficiaries of the lottery money, and the use of dormant account money to replace those funds to only one of the distributors.

It is a wonderful coincidence that, soon after the transfer of £425 million from the Big Lottery Fund in March, we now have a Bill which will ensure that an estimated £400 million to £500 million will be added to the Big Lottery Fund’s coffers. It is fortunate for the Big Lottery Fund that many outside opinions consider this initial estimation by the Government of the amount of money that will be gathered in as a result of the Bill to be rather on the low side.

The other lottery distributors are not as fortunate as the Big Lottery Fund and will not benefit from this windfall. It is possible that their boards are not quite

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so friendly with the Government and so have been unable to lobby effectively for the return of their lost millions. I am sure that the Minister will claim that the other lottery distributors are not so well placed to distribute money to organisations promoting the three favoured recipients. That is probably true; it is only the Big Lottery Fund that has such a wide remit, and, frankly, such unclear purposes that it can spend the money in a way that will complement government spending so conveniently. However, there is a later amendment in my name that will go further on additionality, on which the Minister said he had such robust views, so I shall save some of my remarks for then.

On the first day in Committee, in response to a point raised by the noble Lord, Lord Naseby, the Minister said that,

Can the Minister give us an assurance that none of this money will be given by the Big Lottery Fund to projects that would or could have received lottery funding prior to the raid this year? If he cannot, will he admit that dormant accounts are essentially being used to fund the Olympics, via the circuitous route of what is meant to be an independent body—the Big Lottery Fund? Of course, he cannot. Not only does the Big Lottery Fund regularly give lottery money to local authorities, publicly funded schools, NHS-funded hospitals and other responsibilities of our public sector, it will clearly continue this practice with the dormant account money. Large sections of this Bill are lifted directly from the National Lottery Act 2006. Most of Clause 15, large amounts of Clause 16 and most of Clause 21, not to mention Schedule 3, are identical and there is much more that is very similar—so much for this money being entirely separate from lottery money.

I can think of numerous ways that the sports, arts and heritage distributor funds could spend this money in line with the Government’s three concerns—particularly those of young people. Does the Minister really believe that the millions of pounds taken from the sport distributors to spend on the Olympics will benefit young people more than the grassroots recipients of the money originally? I declare an interest as chairman of the National Playing Fields Association. Does the Minister not think that at least some of the dormant account money could be well spent on sport facilities and opportunities for young people? Or do the Government intend that the Big Lottery Fund should extend its remit even wider into areas that are served by other bodies, such as Sport England and various other sporting organisations? I beg to move.

Viscount Eccles: The Committee will recognise that this is not my number one solution; that would be to have a private sector solution to the distribution of moneys. Maybe we shall debate that another time. Plenty of organisations are well experienced in dealing with the issues of education and the problems

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of youth. However, as a second-best solution, it is certainly a great improvement on giving Big a monopoly. The other three funds receive 16 and two-thirds of the money. That would achieve a halving of the moneys available. The other three have advantages over Big. What they are supposed to do is much clearer to the public. Everybody is pretty clear what heritage, sports and arts mean. There is no uncertainty—all three have identities and, I guess, board minutes in which they dissent from some sort of message that they have received from the department. I challenge the Minister to produce a single minute of Big’s board meetings in which it has dissented from the logic of the general policy directions given to it by the DCMS.

My point is that Big is an arm of government and we should be in no doubt of that. It does not have any realistic independence. The chairman and chief executive write a joint report and there is not a single personal note in that joint report, which is very poor governance. The chairman is supposed to be independent of the chief executive when he writes reports and put his own personal view on paper. It does not happen in Big. The other three do that because they have been established longer and are not the heirs to the mixture that Big represents. They have a personality, an identity and stand up for themselves. Therefore, if at least half the money were to go to them, it would be a great improvement on the whole lot going to Big. I support the amendment.

Lord Davies of Oldham: I am grateful to both noble Lords who have spoken and, like the noble Lord, Lord Howard, regret the absence of the noble Viscount, Lord Astor, who would certainly have made a trenchant contribution to this discussion and subsequent ones. Perhaps we will have the pleasure of his company during our later consideration of the Bill.

These amendments would subsume the use of the unclaimed assets and resources within the general National Lottery scheme. We think that it is better, clearer, more effective and more answerable to the nation that Big should take responsibility for distribution, but with an entirely separate accounting and reporting procedure on its work with regard to these assets. That is the principle behind the Bill and we want these unclaimed assets to be entirely separate from other operations of the lottery distributors. We are insisting upon mechanisms within Big that guarantee that.

The background is that these resources represent a once-in-a-generation opportunity which we need to make the most of. We want this investment to make the biggest possible impact and we think that the most effective way of doing that is by identifying clear priorities—which we are setting out—and by ensuring that the money will be used effectively to support long-term commitments, have the biggest impact on the most pressing priorities and have a lasting legacy for communities. I hear what the noble Viscount, Lord Eccles, said in his criticisms of Big. Some of them could be voiced against anyone with the challenging position that confronts the work of Big—particularly as we are still looking at a body that

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has existed for only three or four years and still has considerable expertise to build up. Nevertheless, it is clearly the most effective body for distribution, against a background where it will, as the legislation indicates, have responsibility for a separate fund for the discrete purposes of youth services’ financial capability, inclusion and social investment, which will differ from other work.

5.15 pm

The name “Big” is not exactly the most attractive. If we have a resident poet in the Department for Culture, Media and Sport—if we have, I have not met her—I cannot imagine that poet having been consulted about that title. It gives out all the wrong signals about its work. It will work within a framework—it already works within the framework of the localities that it serves. The devolved Administrations of Scotland, Wales and Northern Ireland will determine their own spending priorities within the general framework. To make the most of the opportunity presented to deliver lasting benefits, it is important to ensure that the distribution mechanism is effective in allocating funds in support of those priorities.

I am mindful of the fact that among Big’s potential disadvantages is the diversion of funds to the 2012 Olympics, to which the noble Lord, Lord Howard, referred. As we have made clear, the Olympics is exactly the kind of objective for which the National Lottery was conceived. It is a major national project of great significance to the whole nation. I cannot think of anything that fits that definition more accurately than the Olympic Games. However, I assure the Committee that challenges to Big’s decisions of allocation to the Olympics will have absolutely nothing to do with the resources that we are discussing in the framework of the Bill. Big will account for those resources entirely separately from its other operations. They will not be linked to the Olympics in any way. The dormant accounts will be managed by Big as an entirely separate and distinct fund, with separate spending areas, financial management and accounting arrangements. Schedule 3 sets out that the fund must prepare a statement of accounts and an annual report related to the distribution of dormant account money that are separate from those covering lottery resources, so that they are transparent.

I cannot think of a way in which the Government could have been more explicit about their determination that these funds will not in any way, shape or form buttress, support or overlap with other resources for which Big is responsible. Its operations will be entirely transparent in those terms.

In moving the amendments, the noble Lord, Lord Howard, has provided an opportunity for voicing concerns about Big’s operations, which should be subject to scrutiny. He should certainly be exercised, as undoubtedly is the whole Committee, about arrangements for guaranteeing the separateness of the resources in question. I assure the Committee that that is exactly where the Government stand on this matter. The Bill reflects the Government’s thinking.

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Lord Howard of Rising: I am grateful to the Minister for his kind comments about my noble friend Lord Astor. I am sure he will enjoy reading them in Hansard tomorrow. I am also grateful to the noble Viscount, Lord Eccles, for his comments and support.

It is fine for the lottery to support the Olympics, but not at the expense of so many other things such as art, heritage and so on. The money from the assets going into Big will simply go to fill up the hole. It would be naive to suppose that there is not some direct correlation between the two. The Minister did not comment on the support of the Big Lottery Fund—I agree with the noble Lord’s comments on the word “Big”; it would take a genius to think of something quite so inappropriate—for other things such as the National Health Service and education. These are government responsibilities but money has been directed towards them. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Shutt of Greetland moved Amendment No. 54:

The noble Lord said: Earlier the Minister was vague on how much was coming in and vague on how much was going out and I wondered whether it might be called the “Vague” fund. No, that could be even worse.

There is a lot here that is right in terms of separate accounting. It is quite clear that the dormant moneys are separate moneys and that there has to be proper accounting. Let us have some clarity; let it be very clear that it is separate and that it has its own name. We should try to think of something better. “Reawakened” seems to bring life. It is a far better name than “Vague” and “Big”, so why not try “Reawakened”?

The main reason for considering the name is the issue of clarity. However, we have to be careful because the Big Lottery Fund knows about giving money away. It has experience, a regional network and so on and therefore there is a case for it to act as an agency for this money. But it has got to be labelled differently from “Big Lottery”.

The right reverend Prelate indicated earlier about faith concerns being involved with youth. We all know that many people from the faith communities have tremendous reservations about taking, or do not wish to take, money from the proceeds of gambling, so it needs to be clear that this is not lottery money. It should be labelled separately and “Reawakened” would be a good name.

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