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The Big Lottery Fund has been here before. About the middle of September the Government took the initiative to place £100 million with the lottery fund, which asked organisations throughout the country to approach local authorities to see if they had any unwanted buildings which could be put to good community use. The £100 million was available for organisations to bid for them, provided that they had the support of the local authorities concerned to put

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the two things together. What happened? On its own initiative, the Big Lottery Fund labelled it “community assets”. That is an example of the lottery already doing that. Here we are with an opportunity to do this. It is important that it is labelled separately. The accounting and so on will be separate. Let us be clear about it. I beg to move.

The Lord Bishop of Chelmsford: I support the tenor of those remarks. I have not checked the accuracy of my figures, but the Committee may be interested to know that it has been suggested that two-thirds of young people who are active in the churches live within the bounds of the M25. One of the reasons for that—whether the statistic is accurate or not—is that there are large numbers of young people in black churches. The remarks made by the noble Lord, Lord Shutt, about anxieties about the lottery would apply to some of those networks of churches. If we want the fund to be used comfortably for some of the innovative work that I am aware is being done among young people in places such as Brixton, it would help to deal with the issue of the name. “Reawakened” has certain religious tones that warm my heart, but whether it is right or not, there is some anxiety in the Committee about the word “Big”. In some quarters, the word “lottery” might raise some anxieties, so if it could be tackled, it would be a good thing.

Lord Hamilton of Epsom: What would the right reverend Prelate think of the “Resurrection Fund”?

The Lord Bishop of Chelmsford: That would warm my heart even more.

Lord Howard of Rising: I shall speak to Amendment No. 62 which is grouped with Amendment No. 54. This small amendment is designed to probe a matter that the Big Lottery Fund appears to have noticed may cause some conflicts of interest. The Big Lottery Fund Second Reading brief highlighted the important issues of accountability and transparency. From what has been heard from Her Majesty’s Government over the spending of the dormant accounts assets, that money will be going to similar organisations to support similar projects to those which money from the lottery currently supports and which it will continue to support.

The National Lottery Act 2006 made it clear that publicising how this money is spent is a matter of some importance, not only to reassure people that the money they spend goes to worthy clauses but also to ensure that people are aware that the funding for prominent and popular projects around them comes from non-governmental sources. These issues will be equally important for dormant account money. Reassuring people that their money is being well spent is slightly less important since, I hope, the banks will have taken every step possible to ensure that no one has any claim on the money, but there will still be public concern that it is not wasted. It is still important that the public do not confuse projects that are financed by the Government and projects that are financed by this scheme. How does the Minister

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envisage that the Big Lottery Fund will draw the necessary distinction between government spending and the spending of dormant account money? The Big Lottery Fund quite rightly sees it as necessary to keep the identification completely separate, but how will that be done? I hope the Minister will be able to come forward with some ideas on this matter. It is of great concern to many people, not least my noble friend Lord Hamilton of Epsom, that this money is spent in a way that will produce the most long-term benefit. A most effective safeguard against money being frittered away would be more rigorous public scrutiny of the projects the Government and the Big Lottery Fund consider it should be spent on.

5.30 pm

Viscount Eccles: I want to ask the Minister to do something, and at a later stage we might discuss it. I want him to go into the Big Lottery Fund’s website and look at what is there—there is a great deal of information there—and see if he can come out with an understanding of what the Big Lottery Fund does.

I shall give a very small example to the Committee. The other day I fell into conversation with somebody in my village in north Yorkshire—a thing that happens pretty frequently—and he said, “You’ll be very interested to hear that we’re applying to the Big Lottery Fund for some breathing space money”. I asked him how much and he said, “We think about £1,500”. It is not difficult to breathe in north Yorkshire and there is plenty of space, but the particular space concerned is a plot of land that were the foundations—and there were very few of them—of a 1920s village hall made of wood and corrugated iron, which became unsafe. The right reverend Prelate will be pleased to hear that we are using the church instead of the village hall because the church is not fully used the whole time.

There is going to be a study of this piece of ground, which is next to an abandoned garden, and there will be a specialist wild flower consultant coming to look it. We are going to put in an application. By my calculation, if that had been given to me to make into a vegetable garden, I could probably have done it in about 100 hours if I were about 20 years younger than I am—and I will bet that about 100 hours are spent assessing whether to give us a grant of £1,500 for a wild flower garden that within two years would otherwise be invaded by nettles. That is my perception of a piece of the Big Lottery Fund.

On the name Big, it was very important to the Government to have an anonymous name, because they have the power to direct what it does. Noble Lords have heard its definition of additionality—and I do not want to fight about additionality at all, because it is not relevant. You can do with it what you will, as the Minister told us earlier. We have had those fights and they are not important; the important thing was to have the Big Lottery Fund in the Government’s hand so that from time to time they could change what it did without anybody understanding why they had come to that decision. That is why the website is so important.

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Ring-fencing the money from dormant bank accounts is no problem to the Big Lottery Fund. Having been the chief executive of the Commonwealth Development Corporation, which distributed money all over the third world, I am perfectly well aware of how you deal with that—you just ring-fence it. But that does not mean to say that you are not doing within the ring-fenced piece exactly what you might be doing within the other piece. There is no reason why you should not do what you want, some of it here and some of it there. Transparency is argued, but my response would be that it is much more like a Kafka novel than it is like transparency.

Lord Bach: This has been an interesting debate on the independence of the dormant fund money spent by the Big Lottery Fund and on the importance of the public knowing that it is separate and different from other money. All those who have spoken in this debate have emphasised the need for that, and that is what these amendments are about.

Even if I had not seen who was to move Amendment No. 54, after reading it I was pretty sure that it would be the noble Lord, Lord Shutt. Who else but him could think of the title “The Reawakened Fund” in the context of the Bill? I express agreement, if I may, not with the name itself but with what the right reverend Prelate said—as usual, his choice of words was spot on. However, we support the tenor of what the noble Lord says and how he argues his case.

It is important to ensure that the process of distributing unclaimed assets is publicised in a manner that reflects the exciting opportunity here. It is also important to ensure that investments are presented in a suitably distinctive way, reflecting the once-in-a-generation opportunity to make a lasting difference in communities across our country. We believe that Big has done that in respect of some of its other activities. Therefore, I want the noble Lord to understand that we agree entirely with the sentiment, and I am sure that there is no disagreement in the Committee in that regard. However, we think that we can achieve the desired effect without necessarily amending the Bill. There is nothing to stop us referring to unclaimed assets by a distinctive title but, just as the right reverend Prelate said a few minutes ago, we are not certain that we are prepared to settle now on the expression dreamt up by the noble Lord. We think that it is a good try but even he may think that this is not the best description. Perhaps we can consider his suggestion along with others, or perhaps the noble Lord will come up with other suggestions. I think that he understands the spirit on which my reply is based—we like the idea but we are not sure that that is the right title.

So far as concerns the amendment in the name of the noble Lord, Lord Howard, again, we take his point. It is a probing amendment about publicity regarding the money that will come from the dormant funds. Our view is that dormant account funds are the public’s money, and it is therefore of paramount importance that we achieve the transparency and clarity that he seeks in relation to where the money goes and who benefits. We would go so far as to say

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that accountability is the key. It is important that people are able to understand and recognise the effective use of the funds in communities across the country. Effective reporting will reinforce such transparency if the public are to support and have confidence in this worthwhile scheme.

Concerns were expressed at Second Reading about the need for dormant money to be treated and accounted separately from lottery money. Indeed, I think that that is what the noble Lord is seeking in his probing amendment, and we agree with him. The Big Lottery Fund has been very clear. It will publicise, brand, report and account for dormant accounts funding separately from lottery funding, and we understand why it is important that it should do that in this case.

Lord Shutt of Greetland: I am grateful for the Minister's comments. “Reawakened” seems a quite logical name for something which was once awake, became dormant and then was reawakened. It may well have people questioning what it means, which is no bad thing, and asking what happened to the dormant money. That was my thinking.

I am perfectly happy to believe that there could be brighter suggestions but “Big” and “Vague” are not two of them. I will think again—indeed, I hope that others will think again—because we should find an appropriate name. With those comments, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 55 and 56 not moved.]

Baroness Noakes moved Amendment No. 57:

The noble Baroness said: In moving Amendment No. 57, I will also speak to related Amendments Nos. 58, 59 and 63 in this group. These are probing amendments to Clauses 15 and 16 designed to tease out exactly how dormant account money is to be calculated and distributed. This is not particularly easy territory even for accountants so I apologise in advance if this is difficult to follow.

Amendment No. 57 paves the way for Amendments Nos. 58 and 59 and amends Clause 15. The definition of “dormant account money” in Clause 15 is important because it drives the “apportionable income” of the Big Lottery Fund as set out in Clause 16 and hence how much can be distributed under Clauses 17 to 20 to the various countries for good causes. The definition of “dormant account money” in Clause 15(2) starts with the amounts transferred by the reclaim fund. That is not difficult. Then it moves on and “includes the proceeds” of money, which is invested either under the National Lottery Act or under this Bill. I believe that this concept of including proceeds is a problem because it focuses on the return from an investment but ignores the initial investment.

For example, if the Big Lottery Fund receives £1,000 from the reclaim fund and invests £300, it has £700 left in cash in its bank account. That is what is

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available to pass to distribution bodies. There are no proceeds from investment because it is simply invested money, so Clause 15(2) says that the amount of dormant account money is £1,000—the amount received from the reclaim fund—which has to be apportioned under Clause 16. But that cannot be right because there is only £700 in the bank ready for distribution.

The effect of my Amendments Nos. 57 and 58 would be that, first, you deduct any money which is invested and then add the proceeds from those investments, including interest. I have drafted that in for the sake of completeness as “proceeds” is rather a vague word. It would then work out that the dormant account money in the year of cash outflows for investment would reduce the money before it became apportionable income. In my example that would be £700 because it would have reduced by the amount invested.

Amendment No. 59 also picks up another anomaly in the calculation of dormant account money. Let us suppose that the Big Lottery Fund has made a loan of £100 when it distributed some money in year one. In year five, the money is paid back in full but with a return, probably interest, of £25, so that £125 actually flows back to the fund. That extra £25 is not within the definition of dormant account money in Clause 15(2) because it is neither money received from the reclaim fund nor the proceeds of specified types of investment in Clause 15(2), and it does not appear to be dealt with in any other way. My Amendment No. 59 says that the excess over the amount originally loaned or granted is added to the dormant account income.

That just leaves making sure that the capital amount of any loan or grant, when it is repaid, is treated correctly. The Bill appears to be silent on that, too.

The £100 in my previous example, when it flows back as a repayment, appears in a form of limbo. My Amendment No. 63 tackles this by saying that the amount repaid up to the amount of the original grant or loan is not treated as apportionable income and is available for expenditure only on the category of income from which it was first made. I am not sure that the wording precisely achieves this, but the intention is that if a loan or grant was made from money for meeting English expenditure, it should continue to be treated in that way, so that, if my £100 was a loan to an English youth facility, on repayment it would be recycled within the English expenditure category and would hence be eligible for meeting further English expenditure, not treated as part of the apportionable income whereby other countries got a bit of it.

I hope that the Minister has followed those points. The amendments are offered in a spirit of seeking to make the Bill work properly in practice. I beg to move.

5.45 pm

Lord Bach: I congratulate the noble Baroness on the way in which she put her amendment and I absolutely appreciate the spirit in which she is moving

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it. I hope that we can give her some kind of answer to her specific examples, but if we cannot, we will go away and think carefully about what she said, because this is an important point. Whether she is right—which she undoubtedly thinks she is—or not, it is necessary that we do some more thinking about the accountancy points that she raises. Let me do my best.

Her first amendment appears to be aimed at ensuring that any sums of money generated through the investment of reclaimed fund money, either by Big or by its agent under Clause 24 on investment provision, including interest repaid to Big under the terms of a loan, are available for distribution in addition to the money originally transferred from the reclaim fund. I hope that I can reassure the noble Baroness that these changes are not necessary to the drafting of the Bill as it stands. It goes without saying that we accept and agree with the spirit of her amendments and that the proceeds of any investment of unclaimed assets in the reclaim fund should be recycled back into money available for distribution.

We believe that the Bill already delivers this by way of the definition of dormant accounts money in Clause 15—the very passage that she referred to. The principal from the reclaim fund plus the proceeds of that sum are invested either in Big or by its agent under the Clause 25 provision. The second amendment goes with the first. We do not think that the third amendment is necessary; it is concerned to ensure that where Big has loaned money and received the principal back with interest, all of the money goes back into the dormant account pot. That money is within the definition, too.

The final amendment seeks to ensure that where Big has made a loan, rather than a grant, when the loan is repaid an amount equivalent to the original payment is recycled back into the spending area where the loan was originally made. We do not believe it is appropriate to set a requirement like this in the legislation. The detailed approach to distributing unclaimed assets is yet to be developed and we are obviously going to draw on a wide range of evidence in developing it to inform our directions to Big.

We can conceive of a position where the relative weight of spending on the various priorities would change over time for wholly appropriate reasons, perhaps because some priorities involve more concentrated up-front investment in facilities, while others relating more to the provision of services and advice are more ongoing in nature. Therefore, we would not want Big necessarily to be barred from recycling most of the receipts of a repaid loan that was made to support one purpose in the past to help meet the funding requirements of another priority, if that was more pressing at the time. We would not want to be tied down by the legislation to the approach which the noble Baroness put forward in her amendment.

While distribution through loans may be appropriate in some circumstances, which is why it is in the Bill—the noble Lord, Lord Newby, and other noble Lords will be interested in social enterprises, for example, because they have indicated that they prefer

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that model of funding—we do not expect it to be our intention to direct Big as a general rule to make loans rather than grants. We would not expect it to be the predominant means of funding and large sums of money therefore to flow back into loans.

We do not envisage Big investing other than to manage money not yet needed for distribution. Investment plus proceeds will be made available when needed for distribution. As far as grants made and repaid are concerned, money will go back into the general pot for the country for which the money is to be distributed. I assure the Committee that English money will stay in England.

I am conscious that my answer has not dealt with the detailed points that the noble Baroness made, which is why I said at the outset that we would like to consider in more detail why she thinks that the present wording is unsatisfactory and whether we might come back with a form of words that is more in line, if not exactly in line, with her amendments. That can be usefully done between now and Report. We are trying to get to the same point; it is just a question of what wording is appropriate. I hope that the noble Baroness will forgive me if I leave my answer there.

Baroness Noakes: I am grateful for the tenor of the Minister’s reply. He did not answer all the points that I made, which he recognised. I hope that what I said in my introductory remarks will be self-explanatory

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when we have Hansard available to us. They focused on my suggestion that the wording either gives the wrong result or does not cater for certain categories of receipt and expenditure. If the Minister’s officials cannot follow that, I am happy to take them through some further worked examples to see how it flows through in practice. I hope that he will reflect—as I think that he did in his comments—that I was seeking to make the Bill unambiguous. In the one category where I gave a solution as to where the money should go, I was not being dogmatic about whether one recycles; I was merely saying that one needs an answer about whether it flows through the apportionable mechanism or is recycled within a category. I am happy to withdraw the amendment on the basis that, between now and Report, we will have the opportunity to bottom these matters out. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 58 and 59 not moved.]

Lord Davies of Oldham: This may be a convenient time for the Committee to adjourn until Tuesday at 3.30 pm.

The Deputy Chairman of Committees (Lord Brougham and Vaux): The Committee stands adjourned until Tuesday 15 January at 3.30 pm.

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