League tables, deprivation and Fair Share

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Jane Taylor sets out the detail of the new Lottery scheme, and Murray Macdonald introduces Lottery Monitor’s own Lottery versus deprivation analysis

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A year ago, an enterprising Lottery officer from north-east Lincolnshire, Murray Macdonald, had the bright idea of analysing Lottery Monitor’s annual league tables against the Government’s official Index of Multiple Deprivation, to see how far Lottery money was reaching into the areas of greatest social and economic need. Because the exercise was revealing, we decided it would be worth repeating annually. This year there is an added twist: a very similar exercise has been going on between the Lottery distributors and Government in their efforts to draw up the list of beneficiaries for the Culture Secretary’s flagship Fair Share programme. This produces an unintended ‘compare and contrast’ situation. In this briefing, therefore, we outline the methodology and other key details of Fair Share. We then explain how we have reached our own Lottery v deprivation league table. And along the way we add various caveats. But first, a general health warning: keep in mind ‘lies, damn lies and statistics’. We have opted for one version of deprivation analysis, the Community Fund/New Opportunities Fund have chosen another. We have made various judgements about inclusions, exclusions, analytical tools; CF/NOF have had to make similar decisions and have sometimes arrived at different conclusions. Inevitably the outcomes are different and we offer no judgement on them: that is for you to decide.

Fair Share
The formula devised by NOF/CF during February is complex, but intended to achieve a rigorous and defensible assessment of which localities best fit the original Fair Share criteria: high deprivation plus a bad deal from Lottery funding. 

Selection of areas: England
The starting point was an adaptation of the Government’s district-level Index of Multiple Deprivation 2000, a local-authority-based statistical compilation of six different measures of deprivation.

CF/NOF took authorities containing the bottom 10% of deprived wards, ranking them by extent and by numbers in those wards. From this they obtained a long list of the top 100 most deprived authorities. 

Next, CF/NOF took the DCMS database of Lottery awards from 1995 to December 2001, and filtered out various distorting awards, along very similar lines to those used by Lottery Monitor for its annual league tables (see February Lottery Monitor). Most awards of more than £1m were also excluded. They calculated two median funding averages: one for all Community Fund awards (£21.07); the second for all the other Lottery boards except CF, and examined the long list of 100 most deprived areas against these medians.

From these figures CF/NOF were able to devise four sub-categories: i plus-minus these authorities have had above-average Lottery funding from CF, but below-average from the other boards; ii minus-plus these are below-average for CF but above-average for the other boards; iii minus-minus below-average funding from all Lottery boards; iv plus-plus above-average funding from all boards. Sub-category iv. included 49 authorities and these were therefore excluded from the Fair Share list. Sub-category iii. contains 20 authorities, and these will get Fair Share cash from both CF and NOF. Sub-category ii. adds another six names, which CF alone will put funding into to rectify its below-average contribution in past years. Sub-category i. will add five names to be exclusively funded by NOF, to compensate for the deficit in funding by all non-CF Lottery boards to date.

Selection of areas: Wales
Wales followed the same methodology as for England, using the Welsh Assembly’s deprivation rankings, which are based on IMD2000. However, an additional filter was applied at the final stage to achieve north-south geographical parity. The 14 local authorities in the south-east and south-west economic development regions were counted as south; the eight areas in mid and north Wales were north. The top three Fair Share areas from the south and the top two from the north were selected. 

Selection of areas: Scotland
There are six Fair Share areas in Scotland. The selection was made by taking the Index of Area Deprivation (produced by the Scottish Executive’s Central Statistics Unit) and ranking the most deprived authorities against their Lottery funding uptake across all distribution boards, 1995-2001. Some awards of more than £1m were first omitted to reduce distortions.

Selection of areas: Northern Ireland

According to the DCMS, the need to apply equal opportunities proofing to the scheme means that beneficiary areas will not be announced until later this year.

Fair Share funding
In the original Fair Share announcement, 50 areas were to share £150m over three years, with funding coming from the Community Fund (£100m out of existing budgets) and NOF (£50m of ‘new’ money). Whilst the breakdown was never stipulated, these totals suggested a neat £3m per area. In the final version of the scheme the sums have shifted a bit. The new funding total is just under £169m, reflecting the larger number of areas involved. CF is providing £80m from existing budgets, NOF £88.75m. NOF’s extra £38.75m will come from its 3rd Round Transforming Communities programme.

These sums break down as follows:

England: 51 areas share £139.83m (CF £62.08m, NOF £77.75m) Scotland: six areas share £14.95m (CF £9.2m, NOF £5.75m) 
Wales: five areas share £8.37m (CF £5.12m, NOF £3.25m) 
NI: £5.85m (CF £3.6m, NOF £2.25m) 

The scheme
Lottery Monitor will carry more detail next issue on how the roll-out of Fair Share will take place. However, it is clear that there will be no single ‘uniform’ approach. The Community Fund, for instance, has done a further set of calculations to try and ensure a thoroughly equitable share-out of its £80m contribution over the next three years. Those areas that have done only marginally worse than average may receive relatively small sums, with the lion’s share being directed towards the areas where the greatest funding deficit is apparent. 

Additional pledges
Arising in part from the politics of the process, and in part from the technicalities of funding, four additional pledges have emerged as a result of the Fair Share announcement.

Top 100 pledge: The Community Fund has undertaken to conduct an ongoing joint review with NOF to ensure that all top 100 most deprived areas do not fall below their current CF/NOF funding levels as a result of the intensified targeting process. 

Rural initiative: The Community Fund will create and run, in partnership with the Countryside Agency, a £10m targeted rural initiative to be announced in the coming months. But note, this £10m is included within the funding totals for Fair Share above. 

Quality of life funds: NOF will contribute extra sums from its Round 3 Transforming Communities programme later in the year, to the tune of £5.25m in Scotland, £3.25m in Wales and £2.25m in Northern Ireland. While these programmes target disadvantage, they will not be restricted to Fair Share areas. 

Other distributors’ contributions: the Secretary of State is to press the other Lottery boards to address their own under-funding of the most deprived areas. 

Lottery Monitor deprivation analysis
Murray Macdonald writes: ‘Last year I undertook the first analysis of Lottery and deprivation statistics. Not an easy task given the lack of reliable data and the unwillingness of some distributors to provide even basic information. However an initial analysis was produced. This year I have been able to develop the statistical analysis to include the full set of DTLR Indices of Deprivation for each local authority area in England. By using

Lottery Monitor/Macdonald fair funding table

Fair Share v Lottery Monitor / Macdonald rankings

all six measures, we can get a more comprehensive summary of each area’s relative deprivation, providing a more rounded picture than last year’s analysis. A full explanation of each index can be found on the DTLR website (see address below). For each index, I have calculated every authority’s relative proportion of deprivation based upon the average for that index. This weighting is multiplied by the average all-England per capita Lottery award to give a notional ‘fair share’ of Lottery funding for that index. The result is compared to the actual per capita Lottery income for that area (1995-2001) and the difference between the two figures is ranked to show how relatively well or badly each authority has done.

As each index measures deprivation in different ways, it is not possible to get a simple financial cumulative grand total. But we can produce a composite average deprivation-to-Lottery ranking for each authority. This is set out in Table 1, Lottery Monitor/Macdonald fair funding table, which identifies the top 51 deprived areas in England that have also done worst in Lottery funding. The summary table clearly shows that some areas of high deprivation have received more than their fair share already. For example Tower Hamlets ranks as one of the most deprived areas in England but only 291st against our Fair Share calculation. On the other hand a council such as Wirral ranks in the mid-fifties for deprivation yet its paltry share of Lottery funding places it second in our fair funding table.’

Comparison
Left, we show how the England Fair Share authorities line up against our own rankings, the mean average for Lottery funding (£133.11), and a Community Fund average (£21.59). This third statistic is pretty close to the one used by NOF/CF in drawing up Fair Share. It is based on a median average, to iron out the wild extremes of Lottery funding, and has been used by NOF/ CF to identify Fair Share areas. Bear in mind, though, that our baseline data will vary from that used by NOF/CF because of differences in inclusion/exclusion policy. The most significant one probably concerns awards of more than £1m. NOF/CF stripped out most of these, whereas we left in all except those that clearly had a non-local purpose. 

Findings from putting the exercises side by side include:

31 authorities are common to both lists.

Three of our top 10 do not make the Fair Share list.

Portsmouth exhibits the largest discrepancy between the two methods, ranking 335 out of 354 authorities in our overall list, but still making it on to Fair Share.

Regionally, the largest discrepancy between the two charts is London, where eight authorities make our list as against four for Fair Share.