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Moved, as an amendment to the Motion, at end to insert “but this House calls on Her Majesty’s Government to mitigate the impact of this draft order through exploration of other funding options and to guarantee that the arts, heritage, sport, charity and voluntary sectors adversely affected by the draft order benefit from any increase in land value in the Olympic site following completion of the 2012 London Olympic and Paralympic Games”.—(Lord Clement-Jones.)

Lord Glentoran: My Lords, I thank the noble Lord, Lord Clement-Jones, for moving the amendment and support the entire thrust behind it. It is important to put on record that the shopping list that the Minister read out in his introduction to the statutory

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instrument is arrived at entirely as a result of strong, co-ordinated opposition work both in another place and in the Corridors.

Having said that, I thank the Ministers, Tessa Jowell and James Purnell, for listening to us and for giving us their time. We had a longish session in the Corridors of your Lordships’ House a week or two ago, out of which we gained a great deal, much of which we have heard today from the Minister and the noble Lord, Lord Clement-Jones.

It is worth looking at the shambles that the lottery had become under Labour in recent years. When they came to power they totally changed the raison d’ĂȘtre of John Major’s initial vision—that it should be responsive to the electorate and to people in the nation who had projects and ideas that they wanted to follow through—to make it almost a slush fund for government Ministers who had a good idea. When we come to power in a year or so we shall certainly drive to change that back.

Lord Howarth of Newport: My Lords, does the noble Lord appreciate that when Labour came to power in 1997 we found that the National Lottery was in effect an enormous engine of redistribution from families on modest incomes to families on comfortable incomes, and that was the difficulty?

Lord Glentoran: My Lords, I thank the noble Lord for that intervention, but that is surely the difference between one party’s politics and another’s. When the Government, the nation and my noble friend Lord Coe, who is in his place, won the Olympic Games for the United Kingdom and in particular for London, there was a scramble to start sorting out the numbers. My complaint was that there was not enough transparency. We had gone into the game completely together, but we did not get the transparency we were looking for. I suspect that we did not get it because the competence to provide those figures initially was not there. However, one of the good things that has happened after serious pressure from the media, ourselves and the Liberal Democrats is that the house is now in order. I am relaxed to say that I believe that the management set-up of the ODA, LOCOG and the LDA are thoroughly competent to deliver what we expect them to deliver within the budget.

I am especially pleased that Tessa Jowell has agreed to come to the House of Commons every six months to bare her soul and the Government’s on the state of play in the numbers and that cash forecasts will be available. The interim meetings that she has promised us—I already have dates in my diary from her office for the quarterly meetings—will give us another opportunity to understand what is going on in a supportive if at times critical—because that is often supportive—and helpful role.

One of the issues that I have been pushing is that the communication with the nation as a whole still needs to be raised. We are now reading about major cities looking forward to hosting training camps and so on, but when I talk to people—I have been wearing this logo for a week or so—there is still a lack of understanding in the country about the budgeting

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and the management of the funding. The press needs to be given more detailed education. We can then go forward.

In principle, we are with the Government and right behind the game. I have no trouble in supporting the Motion with what the Minister has given us today.

Lord Howarth of Newport: My Lords, all the political parties were in favour of the Olympic bid. All were delighted and proud that it was decided that the Olympics and the Paralympics should be staged in London in 2012. That delight and pride continues to be felt strongly by the public. However, the question of how we were to pay for all this did arise. It was always envisaged that a substantial proportion of the cost should come from the National Lottery. Indeed, with the enlarged budget the proportion to be funded from the National Lottery is smaller than was previously anticipated. Those who suggest that some other way should be found to pay for this great project must say what additional taxes they would like to raise or what programmes of public expenditure they would like to see cut.

Tough negotiations took place. The toughest of all, I suspect, were those between the DCMS and the Treasury. If the DCMS had not fought so doughtily and effectively, the good causes would have lost considerably more for the period following 2009. Of course, tough negotiations also took place between the distributors and those who cared very much about the good causes across the country and Ministers at the DCMS. However, the negotiation was concluded, and we have the situation that we do.

I think that all of us welcomed the protection that it was possible to give to the voluntary sector. All of us who greatly value the arts, heritage, film and sport below the elite level may, in a way, regret the fact that they will have fewer resources available to them from the lottery after 2009. But it is no use whinging; you cannot spend the same money twice, so some things will have to be forgone from 2009, but other good things will happen.

Like other noble Lords, I welcome the commitment announced by James Purnell just before he left the department that there would be no further transfer from the lottery towards Olympic expenditure, but the big question now is, “How quickly will the money come back to the lottery?”. I read in the press this morning that the London Development Agency now thinks that it is possible that the full proceeds of the land sales will not come back to the lottery before 2031. I do not see how anybody can know; surely, it is speculation and fantasy about how much will be realised over what time scale.

What is or ought to be under our control is the use of the £2 billion set aside as a contingency fund. We must hope that that money does not have to be used. Mention has been made of the rigorous system for monitoring and controlling cash flow that Tessa Jowell has instituted. I am certain that the noble Lord, Lord Coe, and the Olympic Delivery Authority are all absolutely determined that the control of expenditure should be tough and proper, so that we

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do not, in the end, dig—or dig deeply, at any rate—into that £2 billion contingency fund. I worry that the declaration that a fund on that scale is being retained is an invitation to every contractor in Europe to get their hand into that particular till. It might have been wiser to keep a little quieter about it and, perhaps, allocate a sensible sum to the contingency reserve without publicising it. Be that as it may; that was not how things were handled. However, if we are entering an economic downturn, it will be greatly to the benefit of the communities in east London and therefore to the economy of London and to the wider national economy that this scale of public work is being undertaken to prepare the sites and the physical infrastructure for the Olympic Games.

We must hope that lottery sales continue to flourish. Even if we should find ourselves in an economic downturn, it is not at all impossible that they will continue to flourish and that the magic porridge pot will continue to bubble. It certainly matters very much to the good causes that that should be the case. I welcome also the announcement by James Purnell that the sum of £750 million, which is the target to be raised by the Olympic lotteries, will be capped at that level. Camelot is optimistic about lottery sales and proceeds during the period following the new licence in 2009. It is its job to be optimistic but we must hope that the new games that it may introduce will flourish. It is absurd to seek to pin down Governments on commitments for as far ahead as 2019, but I express the hope that as time goes by Governments will resolve that, following 2019, there will be no further new causes created or a further dilution or spreading more thinly of the proceeds of the lottery.

The amendment in the name of the noble Lord, Lord Clement-Jones, invites the Government to explore other funding options. It is extremely important that all the different sources of finance that could be available for the good causes should be disposed more coherently than they tend to be. All the funding engines should be driving in the same direction. We need a better division of labour between the lottery, central government expenditure, local government expenditure and expenditure by the voluntary sector, trusts, and the private sector, so that there is more coherence, less overlap and more cost-effectiveness in the use of the totality of resources available for the good causes.

The Government should be congratulated on the increase in grant in aid to complement money from the lottery for the arts and heritage. The additional £50 million that the Government, to our surprise and pleasure, were able to find for the arts will be extremely helpful. Of course there is a row going on, but the Arts Council is absolutely right that there should not be for ever the same charmed circle of funding beneficiaries, but I need not stray further into that particular topic. Sport has enjoyed a prodigious decade of increases of grant in aid and public expenditure. Heritage, by contrast, has experienced a decade of rather short commons, but English Heritage has put a brave face on its settlement in the Comprehensive Spending Review.

The voluntary sector has enjoyed improved tax relief in the past 10 years, but it is worth reflecting whether tax relief may have a larger part to play in

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our exploration of other funding options. The noble Lord, Lord Clement-Jones, has just made the case for a gross profits tax. For arts and heritage, I hope the Government will be willing to consider other tax relief options. I have argued over a number of years, and much more importantly the Historic Houses Association has argued, in favour of historic properties maintenance relief. That would recognise the principle of a stitch in time. It is absurd that our funding system at present seems to require that places of worship or great houses dilapidate to a point at which they are in seriously bad condition before there is any prospect of them getting a grant. That cannot be wise. I hope that the Government will be willing to think again about whether lottery funding might in carefully defined circumstances be available to support the cost of maintenance.

Noble Lords will have noticed that among the many sensible and interesting recommendations that English Heritage has put forward in its Inspired! campaign to find cost-effective ways to support the conservation of places of worship, it has suggested that you can get very good value for money across a diocese if some organisation takes responsibility for regularly clearing out the gutters of all the churches. It may be unglamorous but it would be extremely useful. If we look after routine maintenance, as we know from our experience in our own homes, we avoid having to face enormous bills later. It would be desirable if the Heritage Lottery Fund did not have to find large sums to make up for failures to attend to maintenance over the years. At present, the rules that constrain the lottery drive us in that direction.

I hope that in these circumstances of comparatively straitened finance for the arts and heritage the Treasury will allow the DCMS once again to put its hand into the Goodison bran tub. There are many very good recommendations there. Of course they cannot all be done at once, but Sir Nicholas Goodison’s thoughts on reform of acceptance in lieu and the douceur arrangement could be of very great benefit to museums and galleries and for archives. I declare an interest as chairman of the UK Literary Heritage Working Group.

We ought to look at the possibility of improving income tax reliefs to match those that are available in other countries, to encourage support for cultural institutions—for donations of works of art and so forth—and relief on gifts in kind. I believe that a number of the trustees of our great cultural institutions—not every one of them of course because these institutions should have a board of trustees which contains a blend of skills—should see themselves, frankly, as fundraisers and that should be the expectation. It has not been sufficiently the case, except perhaps for occasional capital appeals. We need a better public-private partnership for the funding of our cultural institutions.

In the circumstances that lie ahead of us with the diversion of money from the lottery for the Olympic Games, it becomes all the more important that the lottery distributors achieve the best value for money in grants that they do give. I hope that they will continue—I am sure that they will—to be shrewd and rigorous in looking to maximise the matched funding that they require from potential recipients of lottery grants.

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I know that it is difficult to apply means-testing to voluntary organisations or to local authorities. It is going to be more difficult to raise matched funding in a period of economic slowdown. It is always difficult to raise matched funding in areas of deprivation. But the Public Accounts Committee report on the Heritage Lottery Fund goes so far as to suggest that three-quarters of the projects funded by the Heritage Lottery Fund might have gone ahead, not perhaps in their entirety, but on some worthwhile basis, had those projects not received lottery funding. If we are looking for other funding options—I hope this is sufficiently in the spirit of the noble Lord’s amendment—correspondingly, we should particularly be looking for value for money.

Startlingly, the National Audit Office and the Public Accounts Committee have suggested that sometimes, the systems of bureaucratic oversight operated by the lottery distributors are excessively rigorous. I think they are found burdensome and to the extent that the distributors are able to lighten up the bureaucratic requirements, they will save money on their own administrative procedures and those they fund will save time, money and energy.

I am pleased that the DCMS is taking a searching look at the regional overheads of the various organisations for which it has responsibility—the lottery distributors, English Heritage, the Museums, Libraries and Archives Commission, all of them with a presence across the regions and all of them seemingly finding it necessary to have their own brass plates on the door. This is a prize that has eluded DCMS for a considerable number of years, but Margaret Hodge is on the case. She will need the diplomatic skills of Kofi Annan to broker agreement between—I would not say the warring tribes—these organisations that take a great pride in their independence.

Worthwhile savings could be found within the DCMS overhead which would be for the benefit of culture. The distributors will of course, as they always do, want to choose projects that provide the best investment for the future, that will constitute a kind of seed corn or where there is good gearing. I do not think that in the circumstances ahead of us they should be chasing the art market or subsidising megastars to perform in our theatres or our opera houses on the scale that they have done before. When funds are a little tighter, there may well be a stronger case for the conservation of works of art than for new acquisitions.

At all events, I believe that investment in skills across the heritage and arts sectors will offer particularly good value for money at this time. At all times, the distributors should look for multiple dividends. Not only is the building refurbished but a new use is found for it, so that more people come into it, more education takes place there, more organisations and communities are inspired to work together and more energy is released. In that way, public value is maximised. It is always right to look for a quid pro quo. If you are going to give money to repair the roof of the Ashmolean, it is right to ask the curators of Renaissance terracottas or blanc de chine to answer the question, “How will this benefit people who live in Cowley as well as people who live in Carfax?”. Similarly, if you are

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going to give money to local authority museums, it is reasonable to insist that the local authority in question should adopt exemplary best practice as set out in the heritage protection review; it should have conservation officers and appropriate planning procedures so that the heritage benefits more largely.

The Cultural Olympiad will mean that, precisely on account of the Olympics, there will be an invigoration of cultural activity and a great range of new cultural activities. I hope that, as time goes by, the Government will be able to inform us more fully what the Cultural Olympiad events will be. With the Olympics, there will be growth in tourism and an unquantifiable benefit in the effect on morale of having this great event of which we will be so proud. The cities of Glasgow as European Capital of Culture and Manchester as host of the Commonwealth Games were brilliantly and lastingly transformed by those experiences. I hope that Liverpool as European Capital of Culture 2008 will likewise achieve a brilliant renaissance. I look forward to the same happening for London in 2012. I believe that, from a cultural point of view, the Olympics will be an event to be compared with the Festival of Britain in 1951 rather than with, say, the millennium. We cannot foresee or quantify precisely what these benefits will be, but I am certain that our culture and our society will be profoundly invigorated.

The Earl of Caithness: My Lords, I have raised more than once in your Lordships’ House the problems that the Heritage Lottery Fund has been facing as a result of the Olympics and I shall speak briefly on that issue today. I am grateful for what the Minister said and for the reassurances that no more than the expected £161.2 million will be taken from the lottery. However, will he say how the HLF will fund any shortfall or loss of revenue through reduced sales of non-Olympic lottery games? Will that be a problem for the HLF or will the Government help?

The noble Lord, Lord Clement-Jones, has tabled a useful amendment, but I question one thing that he said. He said that the amount of money taken from the Heritage Lottery Fund would have a potential impact on projects. I can tell him that it has already had a definite impact on projects. There is no question but that in Scotland potentially very good projects have been withdrawn as a result of the money that has been allocated to the Olympics and the consequent reduction in the budget. Of course the Olympics must be a success. Now that we have them, it is the duty of us all to make certain that they are a success. However, they must be a success throughout the country, not just a success for east London. I fear that, at the end of the day, London will be the only place to benefit from the Olympics.

My noble friend Lord Glentoran said that the lottery is a slush fund for the Government. That is a pretty good statement of the use of the lottery. We are right to question how lottery moneys are allocated. I certainly would like to have a good debate about how the Heritage Lottery Fund works because I agree with some of the points that the noble Lord, Lord Howarth of Newport, made about the heritage lottery and how

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the funds could be allocated. He said that a large percentage of heritage fund projects would go ahead in some form without a government grant. How many of those might have involved local authorities rather than private individuals and small charities, which could actually benefit hugely from a better allocation of the Heritage Lottery Fund?

The noble Lord, Lord Howarth, also mentioned the contingency fund. We see in the Evening Standardtoday that the aquatics centre bill has trebled to £210 million. What happens when the contingency fund is exceeded? What agreement do the Government have with the parties, the mayor and the Heritage Lottery Fund? Is the memorandum that the noble Lord, Lord Clement-Jones, mentioned clear on this point? If raw material costs continue to shoot up and we have this downturn in the economy and the contingency fund is exceeded, who is going to pick up that bill?

5.15 pm

My last point is to chide the Minister. On 17 January I posed to him two questions which he studiously ignored when he came to sum up. I will pose them again in the hope that this time he does not studiously ignore them:

You are taking a large chunk of money away from the lottery. If all you do is return that same amount, given inflation it will be a decrease in money, so I hope that there will be interest attached. My other question was:

up to the total amount the Government want? Instead of having to rely on land sales at some date in the future—the data seem unclear as to when that money is going to be repaid to the Heritage Lottery Fund—and in view of the wording of the Motion tabled by the noble Lord, Lord Clement-Jones, this could be one way that the Government could mitigate some of the very serious effect that has been felt throughout the country by the reduction to the Heritage Lottery Fund, by letting this contribution be handled in a different way.

Lord Davies of Oldham: My Lords, I am grateful to all noble Lords who have spoken in this debate and to the noble Lord, Lord Clement-Jones, for the way in which he introduced his amendment. I appreciated the generosity of his tribute to the outgoing Secretary of State from the DCMS, who succeeded in producing resources from the Treasury which safeguard a great deal of expenditure in areas in need of resources given the changes in the lottery. As he indicated, the new Secretary of State was the Chief Secretary who helped to furnish this arrangement, so that is the best possible augury I can offer. The House has expressed its anxieties about the good causes. I hope to be able to allay those in a few moments. Whether I am able to be quite so precise in detail as the noble Earl, Lord Caithness, enjoins me to be, I am not sure, but I will certainly do my very best to answer his questions.

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