The Fun Fund

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Timothy Hornsby outlines his proposal for a novel way of disbursing lottery cash

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Informal discussions at Lottery Monitor’s annual conference in July, including with your editor, prompted me to consider a radical new way of distributing lottery funds, in response to the Secretary of State’s plea for a continuing revolution in the lottery. My proposal is to set up a ‘Fun Fund’ which would be generated by top-slicing the existing distribution bodies’ income by 3%, equal to some £50m a year.

This money would be distributed as one-off grants of £200,000 each, for capital or revenue projects that delivered tangible community gains and were promoted by social entrepreneurs in the fields of education, health or the environment. They could include cross-cutting projects in the arts, heritage and sport. They would be innovative and wacky –some would be unlikely ever to secure conventional lottery funding.

What would distinguish this fund radically from the present distribution and assessment system is that bids would be made by individuals or groups in the form of applications on video, lasting 30 seconds. Bids would initially be submitted as written proposals for the video treatment. These would be sifted; those judged suitable would then have videos made of their project. Grants could cover the cost of the video production, or a professional video production company could be commissioned to produce all the videos. All those who had videos made would be able to keep them for their own use, whether or not they were ultimately successful in obtaining a grant. All the videos would be numbered in line with the lottery balls, so each lottery draw would generate numbers which would also identify six possible ‘winning’ videos from this pool. These six would then be shown on the BBC lottery game show programme and viewers could phone through their votes for their favoured project. The three winners would each be awarded £200,000, costing the Fun Fund £600,000 per game show. Depending on the quality and volume of bids, the draw would initially be limited to featuring in set-piece BBC game shows, but it could be extended to the weekly draw.

The programme would be administered by NOF, which has considerable experience in this area. But the rules would be totally different from those of the present assessment procedures. Staff would merely check that the bids were on the face of it clean, decent and truthful –there would be no attempt to apply complex criteria to the bids. In the case of the winning bids there would be a light-touch hygiene check: the money would be paid up-front as a lump sum and the only requirement for audit would be a post-completion check that the money had indeed been spent on the project. 

It might be thought this would fall foul of the National Audit Office and the Public Accounts Committee. I did however have an informal word with NAO officials, who said that if there was clear ministerial backing for this scheme, the NAO would accept that, uniquely for this scheme, their role would be restricted to the very narrow one of ensuring that NOF’s light-touch validation was consistently administered. There would be no second-guessing, no attempt to argue about value for money, no complex monitoring, and no attempt to torture the applicants with complex plans for identifying outcomes.

It could be argued that this is a frivolous way of handling lottery generated funds. But the reality is that these are in essence gambling losses incurred by those who have a harmless flutter in the hope of obtaining a life-enhancing prize. The monies really are different from those raised by general taxation. Secondly it could be argued that it is wrong to let the public vote on the winning schemes,

since their selection will be ill informed. But I think that is to underestimate the good common sense of the majority of the viewing public: they are well used to taking their own personal decisions on purchases on the basis of short commercial advertisements, so why would they not be able to register sensible votes on these lottery schemes? In the United States, the Ford Foundation operates on the basis of a 25% grant failure rate. Taking risks is part of the lottery process. The Fun Fund could elicit new schemes from community groups and social entrepreneurs who would need to put much less effort into their applications than the current cumbersome forms and who would, win or lose, retain an exciting video as a product and to help them pursue their fund-raising elsewhere. So everyone would in a sense be a winner. Even if some of the schemes ‘failed’ this could well be less than the failure rate already experienced by the more conventional methods of grant distribution and would not even approach the Ford Foundation’s threshold.

In short, then, the Fun Fund would bring back an element of fun into the lottery. It would re-connect the punters with the distribution of funds. It would enable social entrepreneurs and community groups to put forward stunning new schemes much more easily than by jumping through the hoops of the conventional application process. And it would, by trusting the promoters of the schemes and the judgement of the general public who voted on them, unlock some radical proposals to improve community life. This is of course a jeu d’esprit on my part and I claim no endorsement from lottery bodies I have been or am associated with: but I hope it might spark a debate on alternative ways of putting lottery money to even better use.

Timothy Hornsby was chief executive of the National Lottery Charities Board (Community Fund) for six years and is a Commissioner for the regulator, the NLC. thornsby@timothyhornsby.freeserve.co.uk