From the June 2001 Issue

Contents:  

1. 100m fund offsets poor Camelot sales

2. Teachers fail to log-on

3. Green awards database

4. Music action zones

5. Research fund launch

6. Awaiting the Arts prospectus

7. Eden and beyond

8. Make core costs count

9. Rural deprivation is invisible

10. Let the cash go local

MAIN STORY

£100m fund offsets poor Camelot sales

A disappointing end to the first licence term will not be reflected in the cash available for the distribution boards. Jane Taylor reports.

As Camelot announced its lowest annual ticket sales since 1997 last week, Lottery Monitor has established that funds going to good causes will be cushioned against the effects of the Lottery operator's poor performance.

Year on year, Camelot's 2.2% decline in sales, from £5.09bn to £4.98bn translates into a 2.7% drop in money going to the National Lottery Distribution Fund for good causes, from £1.43bn to £1.39bn. But this loss of £39m in funds will be more than offset by a one-off payment of nearly £100m scheduled to be handed over to the distribution boards in October, at the end of the current licence term.

This exceptional payment is a result of an escrow account that Camelot set up under its initial franchise conditions in 1994, to guarantee the payment of one week's funds to the good causes in the event of the operator going bust. By 1997 the account was deemed no longer necessary and since then the cash - currently standing at £97.8m, according to Camelot - has been held in trust, to be paid out at the end of the licence term. The sum has been incorporated into projections produced by the Department of Culture, Media and Sport.

Overall the NLDF has fared well out of Camelot's first licence. The total raised has just passed £10bn and the operator confidently predicts the figure will be £10.5bn by September. Moreover, the proportion of ticket revenues due to good causes, which was targeted to average 28% over the licence term, is in fact running at between 30 and 31%.

So the latest DCMS budget projections to the distribution boards are for 'steady state' funding over the next couple of years. The DCMS has accepted the view of Lord Burns, chair of the National Lottery Commission, that Camelot is likely to continue to turn over £5bn a year in sales, and has used this benchmark as the basis for its forecasts.

Camelot has pledged to increase sales revenues by 50% in the new licence term, and is preparing a big investment and marketing push for the new year. The Lottery regulator, the NLC, for its part is determined to make Camelot work harder for its profit next time around, applying conditions described by its chief executive Brian Pomeroy as 'payment by results'. A spokesman explained: 'Camelot will take its share differently: a proportion of Camelot's return will be linked to how much it raises for good causes.'

Delegates at Lottery Monitor's annual conference will be able to hear Lord Burns reveal more details of the second-term licence and its impact on the NLDF.

Among the biggest-spending distribution boards the reaction to Camelot's results was broadly one of 'business as usual'. While it is impossible to make meaningful comparisons of spending trends across boards, the Community Fund stands out in taking a notably conservative view of its future spending in the short-term, reflected in the tone of its forthcoming strategic plan consultation. CF's budget forecast for next year (2002-2003) is, at £275m, its lowest annual total since it was set up. In the current financial year the fund is budgeting to spend £287m, 23% less than last year. Paul Hensby, CF spokesman, said: 'The finance director and committee have planned on the basis of figures that will see a decline in the amounts coming to us... and to be prudent in our future planning.'

The Community Fund, along with the Arts Council of England, UK Sport and the Heritage Lottery Fund, is technically 'over committed' in its spending allocations to projects, but comfortably within the bounds of acceptability, according to the DCMS.

NEWS IN BRIEF

Teachers fail to log-on

Technology training for teachers has run into trouble as a major software supplier struggles to deliver. In the two years since the New Opportunities Fund's ICT for Teachers scheme started, 210,000 teachers - just over half the teacher workforce - have started the training intended to bring them up to speed with new technology.

Green awards database

The Royal Society for the Arts has launched what it calls 'the first UK database of environmental and sustainable development awards' at www.environmentawards.net

Music action zones

Youth Music has announced the creation of two new 'action zones' in south-east England and Cornwall, to add to its six existing zones in London, Greater Manchester, Lancashire, the north of England, Norfolk and Thanet. In the action zones, Youth Music works with established organisations to bring music-making opportunities to communities which otherwise would have little access, focusing on children and young people up to 18 years old. The National Foundation for Youth Music will award more than £500,000 to each action zone, lending financial support to groups of music projects, schools, youth clubs and community centres. www.youthmusic.org.uk

Research fund launch

The Community Fund will launch its third research programme on 11 June, for high-quality medical and social research into health and wellbeing. Unlike its predecessors, the programme will not be time-limited: there is no closing date for applications. Visit www.community-fund.org.uk

FEATURES

Awaiting the Arts prospectus

The Arts Council's decision in March to restructure its England operation

came as a shock at local level. Nearly three months on, Apala Chowdhury

tests the mood and reports on progress.

Eden and beyond

Vision, risk-taking and partnership brought Cornwall's new jewel into being. Sue Royal explores the dynamics of creation and regeneration

Make core costs count

Lottery Monitor's interview with Richard Gutch, the new director of programmes at the Community Fund (May 2001 issue), inspired John Pendlington to offer Mr Gutch a challenge.

Rural deprivation is invisible

Alex Andrews, Head of Leisure Services, South Norfolk

While interesting, the idea put forward in Lottery Monitor (April 2001 issue) of linking Lottery cash to the Index of local Deprivation for England (produced by the Department of Environment, Transport and the Regions) could once more disenfranchise many rural areas.

Let the cash go local

Distributors have yet to get to grips with community building, argues Vicki Nash of the IPPR think-tank. How to manage diversity from the centre is one of the toughest and most important challenges for Lottery distribution boards.