The Lottery Funding Review
back to the contents page

Make sure you receive your fair share of lottery cash - take out a no-obligation trial subscription today.

The Government’s Review of Lottery Funding contains few surprises and few firm proposals, but asks a wide range of questions. It represents a unique opportunity for input and critique by all those who have worked with Lottery funding as the system has evolved and have had to grapple with the complexities and frustrations of trying to access cash. The range and open-endedness of the paper should encourage all-comers to add their reflections and proposals: beyond the sixty-odd listed questions, you are invited to throw in your own ideas and proposals, too.

This is one document, therefore, that should be of interest to all Lottery Monitor readers. After all, unless your own experience of the Lottery funding and distribution system has been uniformly straightforward, successful and happy, you will have a point of view which may help improve things in the future. As the review states: ‘It is the people and organisa-tions who have direct experience of Lottery funding, perhaps who are working on Lottery funded projects or who have applied for a Lottery grant, who may be best able to identify where things can be improved.’

Below, we summarise the main sections of the review document and list some of the key questions it raises. The full document is at www.culture.gov.uk/lottery

Context and introduction
The review document confirms that the Government does not intend to alter the good causes that benefit (arts, sport, heritage, charities, education, environment and health) and has guaranteed that their shares of Lottery funds will continue as they are until 2009. It also reiterates that Lottery funding is distinctive from Exchequer funding, so the capture of Lottery funds wholesale by Government is not an option.

How is Lottery funding distinctive? 
‘It is a completely different source of funding, separate from the Treasury. And it has huge potential for innovation, both in the kind of things it funds and in the way it funds them. Lottery money can be used to experiment, to try new things or to try different ways of delivering the same things. As well as preserving some of the best things from our past, it can also be used to unlock future potential, whether in sport, arts, heritage or communities.

‘…The more involved people are with how Lottery money is spent, the stronger will be their commitment to see it used well on projects and programmes which meet their needs and leave the best possible Lottery legacy.’

There are four main themes: greater responsiveness to community needs; fairer distribution of funds; managing the distinctive challenge of Lottery funds and improving efficient and effective delivery.

Responsiveness
This section highlights the need for people to be more involved locally in decisions about Lottery funding, be that in relation to a specific project or consultation about an entire programme. It also deals with the broader issue of the need for greater public awareness of Lottery-funded projects.

It proposes there is scope for a micro-grants scheme to complement Awards for All, for sums of less than £500, possibly administered by existing community infrastructure organisations such as Community Foundations. 

It proposes exploring the establishment of a single promotional body to raise public awareness of Lottery projects and asks how best this might be funded.

It asks for views on a possible ‘National Lottery day’.

It raises the possibility of local referenda being organised, especially in areas where there is a low take-up of funds, for people to indicate their priorities for funding, including for instance capital versus revenue projects, projects for young people, which local groups should benefit. This polling might be done through local Lottery ticket retailers.

Other consultative options mentioned are: local citizens’ panels; and conferences or workshops to involve particular groups in the design of specific programmes.

In terms of more specific project decisions, it lists the following options for greater local involvement: 

  • local partnerships could receive indicative allocations against which they would prepare portfolio bids (as with various NOF schemes at present)
  • sub-regional awards panels
  • delegated tranches of funding to local organisations for distribution.

Fairer distribution 
This theme underscores the Government’s continued policy of redistributing funds to areas of greatest need which have done least well so far out of the Lottery.

It asks whether and how best more could be done to help capacity building; and raises questions about targeting resources, such as which geographical level to target, how to avoid double-funding, do targeted allocations contravene the principles of Lottery funding?

It asks once more whether a single application form is desirable/feasible –though specifying that this would probably only work for smaller-grant programmes; and asks how much demand there is for greater online access to applications processes. There is a set of questions about application / project handling, asking about increased support for individual projects at various stages.

One-stop shops are raised – the paper concedes this kind of service is likely to benefit mainly small community groups. Options include:

  • a network of physical offices for Lottery advice
  • mobile advisory teams/li>
  • partnership with existing public information networks such as libraries/li>
  • creation of virtua/li>
  • advice centres, probably by expanding the existing phone hotline and website portal to include regionally specific information/li>
  • link up with non-Lottery funding advice sources/li>
  • encourage local authorities to be responsible for providing an advice service./li>

A sub-section on partnership working asks broad questions and states that distributors should work more closely with Regional Cultural Consortia. 

Distinctive Lottery challenges 
 This section picks up some of the deepest and most difficult issues of Lottery funding, including project sustainability, risk management versus bureaucracy, duplication of funding, additionality.

On additionality, as well as various reassurances about the distinctiveness of Lottery funding, it states: 

‘The fact that Lottery money can fund projects in different ways from Government does not mean that it can only fund different things.’

On sustainability, it considers options including: extended revenue funding (repeat grants), endowments and core funding for certain projects.

There’s a sub-section here pursuing Tessa Jowell’s belief that Lottery funds should be used for risk and innovation:

‘…we would see the Lottery as the trail blazer for new forms of funding or funding new kinds of projects… where it has funded new and exciting areas which have proved successful and for which there is continuing demand, there is sometimes scope for Government or other funders to provide the continuation funding.’

It is proposed to review the financial directions which the distributors have to comply with in order to reduce the burden of bureaucratic accountability on them and their funded projects. Views are sought on this. There is a sub-section devoted to the particular issues of underwriting the sustainability of major capital projects (such as many of those built with Millennium Fund awards). 

‘For very large projects greater support may be needed. And many attractions, while sustainable in the medium term, may need further funding to renew their exhibits and maintain public interest.’
The paper proposes to investigate using the services of the Office of Government Commerce to help undertake risk assessments on future capital projects. Another sub-section asks how best the Lottery can help identify and support social entrepreneurship: 

‘We need to encourage those individuals, groups and organisations who have the drive and the vision to act as catalysts within their own communities to make things happen, the social entrepreneurs, whatever their particular field. We may need to look at the administrative restrictions we place on them and explore ways of freeing them up from some of them... We also need to encourage innovative ideas and alternative ways of delivering projects or services.’ 
More efficient and effective delivery
 This section opens up the big structural questions about distribution: should we streamline the numbers of distributors, how can they work more effectively together, are there too many pro-grammes, and so on. It suggests the option of top-slicing some funding for cross-distributor pro-grammes on specific themes such as community halls or a ‘youth fund’. It opens up the possibility of Lottery distributors taking on responsibility for non-Lottery pots of government cash, particularly for community groups.

It seeks views on a range of possibilities for streamlining the current distribution boards, from merging specific functions (such as press liaison) to the merger of certain boards or even replacement of the current system with a single distributor.

KEY QUESTIONS

  • Is there a case for establishing joint promotional activities? If so, would this best be done by setting up a separate body? Or by distributors and Camelot working more closely together?
  • Would an annual ‘Lottery Day’ be useful in raising awareness? What should it involve and which organi-sations should implement it?
  • Is there a demand to devolve more decisions about funding to local level? If so how could this be done?
  • Should other distributors besides NOF be empowered to allocate funds to the local level rather than relying solely on applications?
  • Would introducing a micro-grants scheme be a good idea? What would be the advantages or disadvantages of such a scheme?
  • What proportion of Lottery funding is it reasonable to spend on advice and support for applicants?
  • How should such advice and support for applications best be provided? Via distributors? Local authorities? Or other groups, such as charities, voluntary organisations or private sector facilitators?
  • Should funds be targeted at local authority, ward or constituency level?
  • Does ring-fencing money for specific areas or groups go against the principle of fair, open competition? 
  • Should distributors spend more to help individual projects to a successful outcome?
  • Should more feedback be given on applications early on in the process? 
  • Is there merit in developing a form of one-stop Lottery advice shop? For all applications, or those under a certain amount? What form should a one stop shop take? Who should run it?
  • Is there greater scope for distributors to act more strategically in partnership with other local and regional agencies?
  • How do we balance ensuring Lottery funds remain distinct from other public funds while ensuring they achieve synergies with these same funds?
  • What should be the added value of funding?
  • Is additionality still relevant?
  • Is there a case for longer-term funding in deprived areas which have difficulties in sustaining projects? 
  • Is there scope for using financial endowments to help sustain certain projects in the longer term? Or i this funding the few at the expense of the many?
  • Should distributors be given greater discretion in managing risk, particularly for smaller grants?
  • How should major capital projects be funded? What more can be done to ensure long-term viability?
  • How can we best ensure that those individuals and organisations which have most to contribute to their community gain access to Lottery funding?
  • How can we best encourage innovative thinking?
  • Should funds be top sliced to fund joint schemes? In what areas would joint schemes have value?
  • Should distributors be allowed to distribute funds on behalf of other funding bodies?
  • Would there be merit in merging some distributors? 
  • Should distributors consider reducing the number of programmes they operate?
  • How far should distributors seek to prescribe outcomes for the projects they fund at the outset?
  • What more can be done to get funds to successful projects more quickly?