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Jeremy Hunt: Ensuring more National Lottery money gets to good causes

It has created hundreds of millionaires, including last week's lucky syndicate from Liverpool and even luckier couple from Wales.

But it isn't just about millionaires. Because of the money it has put into good causes, every single one of us has been given a lucky ticket.

Here in Yorkshire it has funded the Leeds City Museum and Resource centre to the tune of £19 million - the largest ever Heritage Lottery Fund grant.

Further afield, the Lottery has brought us the wonders of the Eden Project, saved art works for the nation, and made viable great British films like Notes on a Scandal, The Last King of Scotland and The Constant Gardener.   At last year's Olympics we thrashed the Aussies in the medals table - helped by Lottery funds.  It has restored many of our fabulous Victorian parks -  such as the park in Birkenhead  that acted as the blueprint for New York's Central Park.

The Lottery has safeguarded our past - but anchored our heritage firmly in the future. Brunel's ss Great Britain, for example, is restored and stunning in dry dock, winning prizes and boosting the regeneration of Bristol's docklands around a modern tourism and leisure economy.

By funding grands projets like the Tate Modern the Lottery has allowed us to think big. But it has allowed us to be local as well, breathing life into countless smaller dreams that have transformed communities.

It has even united political opponents, with Tessa Jowell publicly praising the Lottery's founder John Major. In politics we call that a jackpot rollover.

Well, I'm sorry if I seem less generous to Tessa and her colleagues today.  But the truth is that the Lottery is still a teenager that is yet to come of age.  And it is yet to come of age because we have had 12 years of a government that has never understood what the fundamental purpose of the Lottery is: namely to support the efforts of citizens, not ministers; to back voluntary organisations who are not entitled to our taxes rather than the government which is; in short to strengthen society and not the state.

<h2>Labour failings: from Major to Mandelson</h2>

When John Major conceived the Lottery with the Act of 1993, he did so with, in his own phrase, 'high ambitions'.  He wanted to ensure that funds were available for good causes that inevitably come low on Treasury spending priorities.

The first Lottery draw took place on 19th November 1994 - and by 25th September 1995 the first £1bn had been raised for good causes.  Sadly when Labour won the election in 1997 they clearly thought they'd won the Lottery with it. As the "political arm of the British people" they proceeded to divert more than a billion pounds to statutory bodies. In the run up to the 2005 election the Big Lottery Fund had become so politicised it was able to rustle up around £60 million pounds at very short notice to support a government school food initiative to extract the government from a problem created by Jamie. Far from being "additional" funding at arms length, the Lottery was being used to further political objectives, namely gathering votes and headlines for the government of the day.

<h2>Labour failings: problems at the Birthday Party</h2>

Unfortunately, then, birthday parties are not necessarily happy occasions. 

Up until 1997, Labour had agreed with us that Lottery funding should be an addition to, not a replacement for, government spending.  But in their own National Lottery Act of 1998 they carefully added a new 6th "good cause" under the reassuringly vague name of the "New Opportunities Fund" - a distributor of, and I quote, "grants to health, education and environment projects, UK wide, under initiatives to be specified... by the Government".

Since 1998, Labour has diverted almost £3.5bn away from the original good causes and into its own pet projects. Of course much of this was for worthwhile initiatives. But as political initiatives they should have been funded by central government spending, not the lottery. 

Harold Pinter once said that "as important as what is said, is that which is left unsaid".  So when Labour tells us what the Lottery has spent, it should more candidly tell us what has not been spent as a result of its policies: the £240m less that is going into the arts than in 1997, the £252m that is no longer going into sport, and the £255m that should have been funding our national heritage.

On top of this has been a mushrooming of administration costs. Last year, the 7 main distributors spent £120m on admin costs - a staggering 11.4% of the £1.05bn they distributed.  In 2002 the Heritage Lottery Fund spent 6% on operational costs.  Last year, that figure was 13%. That is grotesque when charities, community groups and voluntary organisations are under such intense scrutiny from those very same lottery distributors to get every penny possible out of administration and into delivery. 

Times are tough right now.  We are in - still in - the deepest and longest recession since the war. That puts incredible pressure on Government spending.  So it is more vital than ever that every penny of lottery money is spent on good causes and not political outreach programmes, self-publicity and unnecessary bureaucracy.

<h2>Our policies</h2>

So one of the first things a Conservative Government will do will be to restore the Lottery to its original four good causes.  The Big Lottery Fund will - explicitly - only fund projects in the voluntary and community sectors.

We will also tackle bureaucracy. As a start, we will abolish the National Lottery Commission and transfer their functions to the Gambling Commission. The Lottery only has one operator, so it does not need a separate regulator - not least one that spent £219,000 in a year on "media relations support, strategic communications advice, planning and stakeholder engagement support."

The distributors are there to help good causes, not to be good causes themselves. So we insist that admin costs should be no more than 5% of grants distributed. We accept that administration costs have been reduced recently, but with Sport England spending 12.6% and the Arts Council spending 11% there is still a long way to go. Camelot itself manages to keep its costs at just 4% of revenue - if distributors were as efficient that could generate up to £528m of additional funding for arts, heritage, sports and charity projects over 10 years.
 
Self-publicity by the distributors will also be banned. As will lottery money being spent on lobbying and public affairs. Instead, we will support the National Lottery Promotions Unit as a single body to promote and highlight the social good that the Lottery delivers across the all sectors.  This will leverage money from the operator, and work under the State-owned Lottery icon of the cross-fingered logo. 
 
We will also explore how to harness rapid developments in information technology to increase public participation in the awards process.

We've seen a start with such projects as the popular Restoration programme, or the public vote for the BIG Lottery award to Sustrans.  But we all know those programmes weren't perfect - the Manchester Baths, for example, still lie closed.  But public participation is a crucial way of democratising lottery grant giving. So we will ask all distributors to allow the public to decide on at least one major funding project every year.

We will also explore, therefore, whether moving from a Lottery Duty on each ticket to a Gross Profits Tax on sales overall will provide greater flexibility for Camelot to stimulate sales and stimulate income for the good causes.  You will not be surprised, in the current climate, that we would have to be convinced that revenue to the Exchequer would be safeguarded by this, or even increased. But Camelot are confident that this could bring in an extra £270m for the good causes over the next ten years which is clearly an opportunity that needs to be taken very seriously indeed.

<h2>Conclusion</h2>

Where Labour has raided the Lottery, we will restore it to the original good causes meaning more money for the arts, heritage, sports and charities.

Where Labour has politicised the Lottery, we will restore the independence of the National Lottery boards over good cause grants. Less say from ministers and more say from the public.

Where Lottery distributors have expanded budgets for their own administration, lobbying and self-publicity we will insist they maximise expenditure on the good causes they are there to serve.

There will be a restoration of high ambition over low politics; a restoration of arm's length over the Government's foot in it; a restoration of additionality instead of Labour's political bonus balls.

A very different Restoration three hundred years ago saw our country enter a great period of artistic excellence, vibrancy and free expression.  It saw us move on and advance as a society, united though increasingly diverse in an explosion of culture.  That is what I mean by high ambitions.  And that is what I mean when I say a Conservative government will be determined to ensure that the Lottery is more than restored.

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