HC Deb 21 October 2003 vol 411 cc616-22

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Heppell.]

7.28 pm
Stephen Hesford (Wirral, West)

I am obliged to you, Madam Deputy Speaker, and to the House authorities for granting me the opportunity for a debate on what is a serious and urgent matter for my constituents.

The reason for the debate is an allegation of bias in the distribution of lottery funds from Sport England, which I shall consider by examining two bids made in my constituency, although my remarks are not limited to those bids. I shall make a more general proposition about north-south bias in the distribution of lottery funds.

The House will know that this year Sport England experienced a funding crisis and had to review lottery funding. I am not concerned about the extraneous events but about Sport England's response to the crisis.

The two bids from my constituents were for sports facilities at Pensby high school for boys and for West Kirby sailing club. The House will know how much effort is put into preparing such bids and what a disappointment it is for them to be turned down by Sport England.

Without a shadow of doubt, Pensby boys school's bid for £900,000 to refurbish and build sports facilities on its playing fields would have benefited the local community—some 30,000 possible users of those facilities in an area that does not have the required facilities for activities such as five-a-side football, netball, tennis and so on. West Kirby sailing club's bid for about £80,000 to extend its clubhouse and training facilities would have enabled it to expand its training facilities for disadvantaged youths from inner-city Birkenhead. Those bids are currently the subject of an appeal, and I shall return to that in a moment.

I want to address three issues: how the specific applications were dealt with; what I consider to be the bias in the distribution of money by Sport England, which is perhaps part of a north-south divide; and the sham nature—I hope that that does not overstate the position—of the appeal system to which those two bids are subject.

The trail started on 14 July this year, when Sport England wrote to the possible recipients of the money. Almost identical letters were sent to Pensby boys school and West Kirby sailing club, and one of the features of the letter detailing the rejection by Sport England is that it contained no real information. I ask the House to bear in mind that considerable criticism because it is a feature that will crop up continually in my speech. Those involved also indicate rather curiously that the bids were refused partly because they were based on criteria that had already been set out in a letter in April. I question that because the criteria set out in the April letter were not relevant to what has been subsequently described as the new business case.

On 17 July, West Kirby sailing club wrote to Roger Draper, chief executive of Sport England, to query the refusal and said: We have been given no reason for the rejection of our application, other than the comment in the Press Release, which says that the projects which have not been approved did not meet Sport England's new business objectives. I shall say why that is problematic for West Kirby sailing club. I should make it clear to the Minister that the bids were not new; they were submitted as long ago as early 2002. The House will know that the bids go through a staged process to be granted. Stage 1 involves the initial vetting. Stage 2 involves the allocation process. Both bids had gone through stage 1 and were well on their way to being sanctioned when they hit a snag.

On 26 February, Gordon Tebay, who was Sport England's senior development manager for facilities in the north-west, sent an internal memo that suggested that the tender figure represented tremendous value for money and used the words: representing a good value for money course of action to take. Later on, the e-mailed internal memo says that the facilities development checklist was discussed with the club and DL&E—one of the contractors—and that it was agreed to address the points formally by way of tying up these loose ends in a written response as far as facility development issues at Stage 2 are concerned. It continues: Overall, I feel that the Club has worked prudently and the facility development offers good value for money to Sport England and the lottery fund.

It goes on: The Club is extremely keen to proceed to get the scheme converted to award"— stage 2— at the March case conference".

At that point, therefore, it looked as though Sport England's representative was in effect signing up to getting the stage 2 permission when the funding crisis hit. The e-mail finishes: I do hope the Club can achieve conversion to Award asap and trust you can oblige them in this respect. Based on that information, the club was entitled to think that, in effect, it had the go-ahead. Yet in the fullness of time, the process came to a shuddering halt, for reasons that are not convincing.

In terms of the Pensby boys school bid, its appeal note indicates that it feels that it was disadvantaged by the time lag caused by Sport England taking 10 months for the formal approval to stage 1, as opposed to the three months advertised. That put back the decision process to such an extent that the bid hit the funding crisis, which it would not have done had it been dealt with in a timely way. My first point is that the reason for rejection is unclear. The various reasons given in correspondence appear to be fluid, but the response to attempts to get information about the two bids was secretive.

On the question of appeal, I wrote to Sport England because concerns were being expressed by those two bids as to what the appeal meant. On inquiring, Paul Churchill of West Kirby sailing club learned from others who were in the process of appealing that some people had been told that there was not an appeal—there was a suggestion of people being fobbed off. I wrote to Sport England to clarify what the appeal meant, and I received a letter on 18 September. I do not know whether Sport England intended any irony when it composed the letter—probably not—but it sets out the so-called appeals process as follows. It set up what it calls an independent adjudicator—the appellate body—which turns out to be an ex-employee of Sport England. What the appellate body can do is very little, because the Sport England letter states: The adjudicator cannot decide that a rejection of an application for funding should be overturned. That is an astonishing proposition. It gives rise to the question, "What is the appellate body for?" In effect, the ex-employee sifts appeals, perhaps makes a comment, and then sends the appeal back to the very body from which the appeal is being made.

It is even worse than that. The appeal goes back to what is called a case team, which has had no involvement in the original assessment, which reassesses the application. But that independent reassessment cannot overturn the original decision, because when it has looked at it, it goes back to the original decision makers, who then take the decision. One has to ask whether it is likely that the people who turned something down in the first place are going to overturn their decision. I called the appeals system a sham, and in reality it is. I have no confidence that it will work, although I hope that the decisions in relation to my constituents will be overturned.

Further to that, to underline—if it were needed—the way in which the appeal system has been less than helpful to Pensby boys school and West Kirby sailing club, Mr. Sillitoe, the independent adjudicator, sent identical letters to both appellants, despite the fact that on the face of it their cases were radically different. He told them that he would be away until November and that they should not expect to hear from him until then, although I am not sure whether that was supposed to help them. In fact, we know that he will not be part of the decision-making process, so a lot of help that was.

I was worried by some of the things that I have mentioned, so I wrote to Sport England on 7 October setting out those and other issues. It may or may not surprise hon. Members to know that I am yet to receive a response; I do not know if or when I shall receive one, or what its form might be. My letter made it plain that I did not think that the appeal process was fair or reasonable or that the original decisions were balanced. I said that the decisions were inconsistent, and that inconsistency was inherent in the process, which leads me on to my third point.

When I wrote to Sport England about its appeals system, I asked it to send me details of all the bids that had gone through the same procedure as those from Pensby boys school and West Kirby sailing club. I also asked for a list of successful and a list of failed bids. I drew the following conclusions after calculating the value of bids and examining where awards were made. Nationally, one in four bids in the tranche were rejected but one in three bids from the north, which is made up of the north-western, north-eastern and Yorkshire regions, were rejected. Only one in five bids from the southern region, which is made up of London and the south?eastern and south-western regions, were rejected. Only one of all London's bids was rejected. Nearly half all rejected bids came from the north and nearly a third came from the north-west, which is where my constituency is. Nearly twice as many bids were rejected from the north as from the south. More than half the total money allocated for successful bids went to the south and nearly half all successful bids were from the south. On average, a successful bid from the south received £200,000 more than a successful bid from the north. Fewer than a third of all successful bids came from the north and they received only a third of the total money for successful bids.

David Taylor (North-West Leicestershire)

Does my hon. Friend accept that the patterns and worries that he is outlining as examples of the north-south divide also apply to the midlands—especially the west and east midlands? The east midlands is at the bottom of the league table under most lottery distribution assessments, and its failure rate for bids is even worse than that of the north.

Stephen Hesford

My hon. Friend is doing his best for his region and he has a point, which I am sure the Minister and the House have heard.

When I compared more closely the kind of bids from the south that were successful with the two bids from my constituency, I pulled out two examples that might enlighten the Minister in relation to the definite appearance of bias. Bexhill sailing club, which is not on a needy or deprived part of the south coast, received backing to the tune of more than £112,000. Likewise, Weymouth and Portland sailing academy received £2.5 million. Although I do not know the details of those bids, I cannot believe that they were so different from the bid by West Kirby sailing club which was rejected.

I also noted applications that I thought similar to the bid by Pensby boys school. Portsmouth local education authority, on behalf of the Prior school on the Hampshire coast, was awarded £992,000, and Herschel grammar school, which I think is in Sussex, received £2.5 million.

David Taylor

Needy causes.

Stephen Hesford

Clearly.

Those bids demonstrate the type of applications that are successful. They got past the new criteria applied by Sport England whereas it rejected the bids from my constituency. They stand in stark contrast to the bids by Pensby boys school and the West Kirby sailing club.

One of the various suggestions why the bids were rejected—I emphasise that I am not talking about a key single suggestion that one can understand and get a grip of—was that they had no long-term viability. That is a joke. West Kirby sailing club has been established for 102 years. There is no reason to think that the club, which is thriving and could have gone on to benefit my constituents and others in poorer parts of the Wirral, would not have been in operation for another 102 years.

The bid by Pensby boys school had the backing of the local authority, which pledged £400,000 as match funding. The idea that that did not have long-term viability or that it was connected with an excessive risk leaves my constituents cold. Martin Jones, the head teacher, Glyn Davies, the then deputy head teacher, and Paul Churchill, the commodore of the sailing club, put a lot of work into the bid. I look forward to the Minister dealing with some of the concerns raised, because it looks as though that is something that Sport England does not want to do.

7.48 pm
The Minister for Sport and Tourism (Mr. Richard Caborn)

I congratulate my hon. Friend the Member for Wirral, West (Stephen Hesford) on securing the debate. He made a forceful case in which he raised a number of points about Sport England, in particular the process of adjudicating on lottery awards, to which I shall return in a moment.

My hon. Friend said that about twice as much sports lottery funding is received by applicants from the south than by applicants from the north, leaving aside the national stadium, and he quoted figures from Sport England to support his case. I have some sympathy with him. At times we see too much of the London syndrome in our national life, and that can be unfortunate. However, the figures on which he based his case do not bear close scrutiny.

Sport England has nine regions. I shall not list them all. It does not draw a line across the country between the north and south when it makes policy decisions, and nor do the Government. Aside from anything else, I am sure hon. Members from the midlands and the eastern region would not thank us for placing their constituencies one side or the other of an arbitrary line.

Let us keep things simple and compare the three northern regions—the north-east, the north-west and Yorkshire and the Humber—with the three southern regions, consisting of the south-west, the south-east and London. My hon. Friend has a fair point if we look only at 2002–03, the last year for which full Sport England statistics on awards are available. In that year, the north received 120 awards totalling £32.5 million. On the face of it, that does not compare well with the south's yield of £67.8 million from 163 awards. But matters are not so simple. Across the lottery field, a relatively high proportion of London awards relate to projects that are national in scope, and that does not just mean Wembley stadium.

That is true of awards in other regions, but the concentration of lottery projects that can be said truly to benefit the whole UK is, as one would expect, highest in the capital. In any event, when the figures are adjusted per head of population, the comparison is not nearly as skewed in favour of the south. The population of the three southern regions is much greater than that of the north. I will not do the maths, but others can do the calculations if they wish. The long-term figures show that any perceived inequalities in awards have broadly evened out over time.

Lottery grants, as many hon. Members know, are cyclical, and my hon. Friend is looking at only one year. If we look at the whole period from 1995 to 2003, the north received a total of 1,200 grants totalling £466.3 million. That compares favourably with the 1,751 awards totalling £579.4 million received by applicants in the three southern regions over the same period. It could be said—indeed, it has been mentioned this evening—that the central regions have a common complaint. The midlands and the eastern region received 1,278 awards totalling £351 million, which is a respectable showing, but well behind the north and south before adjustments per head of population.

That is the position under a funding structure without a significant regional focus. Until this year, Sport England has not been formally required to ensure an even spread of awards. Its policy directions required it to take into account the needs of sport…the need to ensure that all parts of England have access to funding and "the scope for reducing economic and social deprivation." Sport England built on that with its 1999 lottery strategy, which confirmed that local projects will respond to local priorities. It put that into practice by designating 12 sport action zones, which are deprived areas that qualify for additional lottery support. Going back to our definitions of north and south, six of the zones are in the north—in Bradford, Manchester, Liverpool, south Yorkshire, the Wear valley and Cumbria—and only two are in the south. The designation of those zones sprang from admirable sentiments, and was backed up with real achievements. Sport England has gone a long way towards putting regional equity into practice, but its directions, strategy and action zones did not amount to a formal requirement to spread funding fairly across the country when addressing need.

That is changing with the reorganisation of Sport England. As part of the Government's modernisation drive, Sport England will in future make 60 per cent. of its total funding available to sport through the new regional sports boards. Each of the nine boards will receive its share of the total based on population, weighted for the index of social deprivation. Each brings together local and regional expertise to ensure that the awards truly reflect regional priorities.

With my Department, I have spent a great deal of time getting the structure right. I am confident that the nine boards will make a significant impact on the way that sport is funded in the regions. The boards will not only make sure that money goes to where it is needed in the regions; they will have the necessary clout and powers to bring in supporting funding from both the public and the private sectors. My hon. Friend will be reassured to learn that I know the chairman of the regional board in the north-west, Andy Worthington. I know from speaking to my hon. Friend earlier that he also knows him well, as he worked in his authority. Andy Worthington will bring a great deal to sport in the north-west.

Stephen Hesford

Amid a situation that is dreadful for my constituents, I confirm what my right hon. Friend said. Andy Worthington worked as a director of leisure services. I know him well, and I wish him well in his new capacity.

Mr. Caborn

I am sure that that will be passed on to Andy Worthington and that he will put an effective board together. That will no doubt have an impact in the medium to long term on the structures for sport in the north-west.

Let me take a brief look at the wider lottery position. Since 1995, the three northern regions have received a total of nearly £2.6 billion in all lottery funding. That compares favourably with the £3.3 billion received by the three southern regions, so the north has not done so badly in the past, after all. In sport at least, I believe that it will do even better in the future. So much for the bigger regional picture.

My hon. Friend is understandably concerned with the interests of his constituents. He put that case forcefully to the House. He referred to two sports lottery applications that, he maintains, were affected by this year's reforms at Sport England. As he said, the reform programme included a stock-take of all lottery-funded projects in January. That led to a number of applicants' schemes being capped, deferred, or—in Sport England's terminology—decommitted. Fifty-four projects were decommitted, and 41 deferred. Of those 95, 20 were in the north-west.

On the face of it, that appears to be a high proportion. Why the proportion should be so high is a matter for Sport England. I cannot answer the specific question raised by my hon. Friend, but I will write to Sport England and, I hope, be able to give my hon. Friend a much fuller answer. As he said, two of the decommitted projects were in his constituency in the Wirral. West Kirby sailing club's application for £88,000 for a new boathouse was turned down, as was Pensby high school's application for £893,000 for sports facilities.

My hon. Friend asked for my views on those two Sport England decisions. He knows full well and acknowledged in his contribution that, as both applicants have appealed to the independent adjudicator, it would be improper for me to comment on either case while the adjudication is going through. For the same reason, I cannot comment on the points he made about officials in Sport England's regional offices, other than to note that these—

The motion having been made after Seven o'clock, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at two minutes to Eight o'clock.