Select Committee on Merits of Statutory Instruments First Report


First Report


Instrument reported

The Committee has considered the following instrument and has determined that the special attention of the House should be drawn to it on the ground specified.

Draft Payments into the Olympic Lottery Distribution Fund etc Order 2007

Summary: This order allows the Secretary of State to transfer £1085 million from the National Lottery Distribution Fund (NLDF) to the Olympic Lottery Distribution Fund between February 2009 and August 2012. The sum represents a previously agreed transfer of £410 million plus an additional £675 million. The order has an effect on each of the distributors of lottery funds (including the four regional sports sponsors, e.g. Sport England, Sport Scotland) except UK Sport, which is responsible for funding the training of Olympic athletes: the order makes provision to ensure that it does not contribute to the £1085 million transfer. We found the Impact Assessment provided with the instrument inadequate and so asked the Government for additional information: published at Appendix 1. The information includes a statement of the anticipated benefits from the Olympic programme and the uses to which the money sought will be put. DCMS have declined to offer any material on other funding options which they considered.

This Order is drawn to the special attention of the House on the ground that it gives rise to issues of public policy likely to be of interest to the House.

1.  The Department for Culture, Media and Sport (DCMS) have laid this Order under section 29A of the National Lottery etc. Act 1993 and sections 25 and 36 of the Horserace Betting and Olympic Lottery Act 2004, together with an Explanatory Memorandum (EM) and Impact Assessment (IA).

2.  The Order confers on the Secretary of State for Culture, Media and Sport the power to make payments from the National Lottery Distribution Fund ("NLDF") into the Olympic Lottery Distribution Fund ("OLDF"). Article 2 allows the Secretary of State to make payments from the NLDF to the OLDF amounting to £1085 million (the previously agreed £410 million plus an additional £675 million). These payments will be made in 13 equal payments of £73 million starting on 1 February 2009 and for the next 12 quarters; and in 2 payments of £68 million on 1 May and 1 August 2012.

3.  DCMS state that the proposed £675 million additional transfer from non-Olympic Lottery income is significantly less than might have been sought under the terms of the Memorandum of Understanding between the Government and the Mayor of London. The arts, heritage, sport and health / education / environment / charitable good causes will collectively have £1085 million less available to them to distribute between 2008-09 and 2012-13 than they might otherwise have expected, although the staggered contribution will assist distributors in the management of their grant commitments. The Government aim to repay the additional £675 million contribution from the Lottery from the profits from land sales after the Games.

4.  The Order also ring-fences the money provided to UK Sport which is responsible for funding the training of Olympic athletes but seeks a pro rata contribution from all other fund distributors including the four regional Sports sponsors, e.g. Sport England, Sport Scotland.

5.  Paragraph 7.5 of the EM states that "the Government is confident that the revised Olympic budget is robust, and does not expect to make any further call on the Lottery". It also gives the commitment that any Lottery funding that is not drawn down by the Olympic Delivery Authority will be transferred back to the NLDF. These were key concerns raised by those responding to the consultation exercise. Other concerns expressed related to the effect of these transfers being compounded by a reduction in receipts to the National Lottery Fund due to competition from Olympic scratch cards and the potentially detrimental impact on the Cultural Olympiad which will precede the Games, if arts monies are diverted to sports causes.

6.  The Committee found the Impact Assessment provided with the instrument to be inadequate and asked for additional information on the basis for the proposals being made. The information provided is printed at Appendix 1; it includes a statement of the anticipated benefits from the Olympic programme and the uses to which the money sought will be put. DCMS have declined to offer any material on other funding options considered.


 
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