Tessa Jowell 

back to the contents page

Extracts from the Secretary of State’s opening speech to the House of Commons’ debate on the National Lottery, 1 March 2002

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

Camelot and the future Lottery licence
We have an efficient operator in place, but we have no grounds for complacency. We need constantly to consider ways to improve and therefore strengthen our national Lottery. The market is changing, as is the technology available to deliver the Lottery, which is why this is the right time to review its structure and regulation to ensure that we continue to achieve the maximum return for good causes. 

...I aim to publish a consultation document before the House rises for the summer recess to ensure effective competition for the next licence.

The NLDF Lottery ‘mountain’
The high level of funds in the National Lottery Distribution Fund is rightly a cause for public concern. People ask why good applications are rejected as money appears to languish unspent, and some accuse Government or distributors of seeking to capitalise on the interest raised. I want to take a moment or two to debunk a few myths. While Lottery money continues to flow to the good causes, balances will never stand at zero, and nor should they. Lottery income is by its nature uncertain and distributors are right to hold on to a certain level of funds to cope with the inevitable fluctuations. They have commitments to the causes that they fund and cannot overdraw, but money held in the distribution fund is largely committed to projects. Awards have already been made and distributors are waiting for applicants to draw down the available funds. In fact, total commitments by all distributors stand at £3.82 billion, which is £290 million more than is held in the NLDF account. In one sense, therefore, they have not underspent at all. In reality, they have overcommitted, and interest received from the balance goes straight to the good causes. Having said all that, I do not consider it right for money to sit needlessly unspent while some parts of the country lose out on Lottery funding. A balance must be struck between managing money prudently and putting it to good use now, when it is needed. Action can be taken to speed up the flow of Lottery funds. The steps that I am discussing with distributors include setting deadlines by which applicants must draw down funds, providing funds to help them manage their projects and get them under way more quickly, and committing funds further ahead to prevent them from silting up.

No one expects Lottery balances to reduce dramatically by tomorrow, but I made it clear in firm terms to the distributors whom I met that excessive prudence makes no sense. They agree, and they accept that reducing the balance is an important priority. They have made absolutely clear their responsibility for achieving that aim, and they expect balances to halve by March 2004. I shall hold them to account in that regard. 

Additionality
Lottery funding should not and will not substitute for Government spending. The point is not what the Government could fund, but what it will fund. I accept that there is a fine line to be trodden here, and it needs to be navigated in a way that maintains public trust and confidence. The Government has never been able, and indeed has never aspired, to fund everything from the Exchequer. We fund cancer equipment, for example, but the demands are infinite, and so much more can be provided for local communities with the help of the voluntary sector, as has always been the case. Much more has been made possible by the introduction of Lottery funding, and the Lottery can do things that the Government cannot. I hope that we will begin to define those distinctions a bit more sharply in the review that I have announced. 

…I assure the House that there is no question of political interference or of fixing Lottery funds distribution. That is a matter for the distributors consistent with the powers given to the Secretary of State in legislation that is debated by both Houses. That is what the relationship should be and what it will continue to be.

Risk-taking
The Lottery is a fund for innovation, and Lottery money should be available to take risks. We like to focus on the Lottery’s big successes, but nobody pretends that every last penny has been spent as wisely as it should have been. I hope that we can create a sense that Lottery funding is venture capital for community enrichment. We have to accept that such a role means that distributors must be willing to take risks.

Joined-up working
A further problem… is the overly bureaucratic distinction between the role of the different distributors, so a more joined-up Lottery must be another objective. The Lottery was designed to build on the experience of existing funders such as the Sports and Arts Councils, as well as creating the new ones, bringing us to the present total of 15 distributors, UK-wide. I am sure that there is value in such a diverse funding system, which builds on and develops particular areas of expertise, but there is also a need to ensure good coordination between distributors. It is frustrating when people tell me that good projects have come to nothing because they have fallen between the remits of various distributors or they involve two or more distributors. It is vital that distributors work together more effectively when considering applications or providing advice to potential applicants. 

Endowments
We have signalled our support for the proposed change to extend, particularly to the Community Fund, the power to make endowments. That will require legislation at the appropriate time, and it is one of the changes that I propose to address in the consultation document.