National Lottery: Proceeds (Hansard, 25 May 1995)

The Parliamentary Under-Secretary of State, Department of National Heritage (Viscount Astor)
My Lords, the National Lottery has raised £524 million so far for good causes. The distribution of those proceeds has only just begun, with £69 million being allocated by the 11 distributing bodies for 284 worthwhile projects.

§ Lord Donoughue
My Lords, nothing is perfect, not even the present Government—

§ Lord Graham of Edmonton
That is a bit strong!

§ Lord Donoughue
Yes, my Lords. Is the Minister aware that there are already concerns about the arrangements for distributing the proceeds of the lottery? There are concerns about the priorities that have been established as regards the distributions to charities. There are also concerns about the criteria for the millennium distribution and about the presentation of the heritage distributions. Above all there are concerns about how much is being retained—currently, it is probably 9 to 11 per cent.—by the managers, Camelot. Will the Minister ask his right honourable friend the Secretary of State to reconsider some of these matters? Above all, will he look at whether Camelot should be required to publish every month the amount it is retaining from this huge revenue?

Viscount Astor
My Lords, we have to remember that the lottery funds only started to flow into the distributing bodies in November. So far 284 schemes in our sports heritage have been approved. We expect at least 1,000 projects to be approved by the end of the year. These are early days. Of course I appreciate the noble Lord's concerns as regards how the distributing bodies manage their task but, as I say, these are early days and we must let them get on with the job that was set by Parliament under the Act. As regards Camelot's profit, it is worth emphasising that over the course of Camelot's seven year licence its take-out to cover both operating costs and profit will be just 5 per cent. That will be the average over the period of the licence. As the turnover increases, so does the amount that goes to the good causes, and Camelot's percentage share goes down. Therefore, the more successful the lottery, the more money that will flow to the good causes.

§ Lord Donoughue
My Lords, before the Minster sits down, does he not agree that although Camelot retains an average of 5 per cent. over a long period, it is currently retaining a figure that is about double that? It has retained that money early in the proceedings, and that is done at the cost of less distribution to the good causes. That is not what we anticipated when we discussed and supported the lottery in this House.

Viscount Astor
My Lords, the percentage retained by Camelot to date is about 9 per cent. which is higher than the overall forecast figure and reflects its higher investment and start-up costs. However, the main point is 1042 that over time the figure will reduce to just over 5 percent. over the course of the whole licence. Therefore, it will average out. The gearing effect of a licence means that Camelot's share will be a lower percentage as the turnover increases. Therefore the figures will balance. I remind the noble Lord, Lord Donoughue, that the licence under which Camelot operates, which is awarded by OFLOT, is available in the Library of your Lordships' House.

The Viscount of Falkland
My Lords, is it safe to assume that there is some kind of a fast track for funds to be distributed from the lottery, to judge from the decision to keep the Churchill papers in this country? If there is such a fast track, how does one get on to it? For example, the folk heritage of this country, which comprises a multi-media collection of videos and films, is now likely—according to a report in the Observer last Sunday—to go to the United States because of lack of funding here. How could that heritage be put onto a fast track?

Viscount Astor
My Lords, there is no fast track as such. Applications are a matter for the distributing bodies. As the noble Viscount said, the Churchill papers have been saved for the nation. That decision was made by the National Heritage Memorial Fund; it clearly fits in with its published criteria for assessing applications. It is for the distributing bodies to assess applications and I believe they are doing so. They have had many applications and are dealing with them as fast as they are able.

§ Lord Hailsham of Saint Marylebone
My Lords, would it not clarify the atmosphere of civilised discussion which characterises this House if we avoided analogies from the motorway? We have already had a U-turn and a fast track. Should we not return to the Queen's English?

Viscount Astor
My Lords, that is a laudable ambition. Perhaps if my noble and learned friend can find a way of turning that into an application for lottery funds, he might find some advantage.

§ Lord Howell
My Lords, are the Government aware of the increasing concern as regards the distribution side? Charities in this country are losing much income as a result of the National Lottery but they have not yet had a penny distributed to them. In spite of the fact that £104 million has been allocated to charities, they will not receive any money at all until next November. Now we learn that the committee distributing money to charities is to set up 13 regional offices to advise them about that. Is that not a totally wrong use of lottery money which ought to go exclusively to charities and not be spent on bureaucracy? Furthermore, is the Minister aware that voluntary sports clubs, especially in the cities, are having great difficulty raising the 35 per cent. sum that is needed to submit a claim whereas bodies involved in the arts only have to raise 10 per cent. to qualify for a grant? Will the Minister examine that terrible discrepancy which is affecting money for sports provision?

Viscount Astor
My Lords, perhaps I may answer the noble Lord's last question first. The grants made by the Sports Council for lottery applications are a matter for that council. It has only just started distributing lottery funds and it will obviously have to take many factors into account.
1043 As regards the National Lottery Charities Board, I remind the noble Lord that the arrangement for regional boards is part of the National Lottery. It was debated in this House. The setting up of the boards is part of the legislative procedure on which the Government gave their assurance. It is important that the National Lottery Charities Board gets it right; it will probably receive more applications than any other body. It has decided that its primary aim for first grants will be to improve the quality of life of people in communities in this country who are disadvantaged by poverty. The board will look at further applications this autumn.

§ Lord Nathan
My Lords, can the Minister assist us as regards the concentration of power in the hands of those responsible for distribution? I am thinking particularly of the charities. Is a consequence of this that an industry will develop of consultants on how best to approach the matter? Does that situation arise?

Viscount Astor
No, my Lords, I do not think it does. It is for the charities boards and sub-boards to take decisions on applications for lottery funds.

§ Lord Annan
My Lords, does the Minister agree that we should give the bodies which distribute the moneys a fair run before we begin criticising every decision that is made? Should we not remember how often great works of art have left the country because, perfectly understandably, the government of the time thought that the taxpayer could not afford the amounts requested? Here we have a marvellous chance to retain works of art in this country. I say that with reference to the Churchill papers and many items which will come up in the future. I would greatly regret it if each donation became a target for envy.

Viscount Astor
My Lords, the noble Lord, Lord Annan, puts the case very well. It is extremely important that at a time when the distributing bodies have only just started receiving applications for grants we resist the temptation to tinker with the system just to keep a few people happy. We must give those bodies a chance to get going and operate properly.