National Lottery Bill

Both amendments are concerned with the definition of ““charitable expenditure””, in relation to the new Big Lottery Fund good cause, set out in Clause 19. Clause 19 defines ““charitable expenditure”” as,"““expenditure for a charitable, benevolent or philanthropic purpose””." This is to be a purpose-based approach. I am grateful to the noble Viscount, Lord Astor, who indicated that he supported the new definition. I am marginally distressed that we are not joined in this matter by the thinkers in the Liberal Democrat Party. I shall seek to emphasise to them why they should join us in supporting this new definition. The existing definition of ““charitable expenditure”” in relation to the Community Fund good cause adopts an institution-based approach. That is exactly what the noble Lord, Lord Shutt, would want us to return to. The new definition has many merits. It is intended to ensure that the focus in future is on projects and outcomes, rather than on institutions and constitutions. The definition is being changed in the light of the practical experience of the Community Fund and with the full support of the Big Lottery Fund Board. In the past, the Community Fund has been unable to fund some deserving projects simply because the organisation applying for funding has had the wrong kind of constitution. This is not a theoretical problem; it has a real impact on real organisations. Many organisations with good projects to benefit communities have had to be turned down for funding under the current definition. These include numerous small community groups such as credit unions, tenants’ and residents’ associations, co-operative enterprises, some sports clubs and ex-servicemen’s organisations. They also include some large organisations such as the Social Enterprise Coalition and the Soroptimists. If the Liberal Democrat Party, in proposing this amendment, is saying that it has none of these institutions’ welfare at heart, there will be rejoicing in other parts of the House. The noble Lord should perhaps rethink his amendment on those grounds. The new definition will give the Big Lottery Fund much-needed flexibility to support good projects, even where the applicant is not set up for a charitable, benevolent or philanthropic purpose. As long as the projects are for those purposes, they will in principle be able to be funded. The Big Lottery Fund will no longer have to make complex eligibility judgments as it does now. This will add to the efficiency with which applications are processed and help to reduce costs, adding to the £6 million to £12 million of savings that we expect to be achieved each year as a result of setting up the Big Lottery Fund. I know that there was some initial uncertainty, particularly among those in the voluntary and community sector, about why Clause 19 needed to be drafted precisely as it has been. We believe that we have allayed those concerns. The National Council for Voluntary Organisations met the Big Lottery Fund, the fund’s lawyers and the Social Enterprise Coalition last month to discuss the reasons behind the change. We understand that, following that meeting, the NCVO is satisfied that the new definition is practical. It accepts that Clause 19 contains the best form of words to ensure that the Big Lottery Fund can fund the entire third sector, and that a definition of the sector in the Bill would be too restrictive and potentially damaging for it. Decisions on funding will of course be for the Big Lottery Fund. We have heard a great deal about how the fund should make such decisions independently, without interference from government. I am happy to give the assurance on the record that we have absolutely no intention of interfering and that Clause 19 cannot be used to divert funds to central government; nor—and the noble Viscount, Lord Astor, asked for this reassurance—is it our intention that it should be used to divert funds to political parties. It is highly unlikely in any case that party-political activity would constitute a charitable, benevolent or philanthropic purpose. Neither the Community Fund nor the New Opportunities Fund has ever funded a political party; why should anyone start doing so now? Funding decisions will be for the Big Lottery Fund, and I emphasise that the Government are outside that framework. I am concerned that we recognise that fact. In the circumstances, there is no need, in our view, for an amendment to spell out matters any further. I draw the Committee’s attention to the policy direction that we have given to all lottery distributors requiring them to take into account the need to ensure that money is distributed for projects that promote the public good and that are not intended primarily for private gain. I can also give the assurance that the clause will not lead to the voluntary and community sector organisations losing out. As the Committee discussed last week, the Big Lottery Fund has given an undertaking that 60 per cent to 70 per cent of its funding will go directly to voluntary and community sector organisations. That undertaking will operate on an institutional basis. The fund has worked closely with key VCS stakeholders to develop the definition of a voluntary and community sector organisation for the purposes of the undertaking, and I understand that broad agreement has been reached. A key principle is that it is where the money ends up that is important, so money awarded to a local authority and then distributed to voluntary and community groups will count. However, money awarded to voluntary and community groups and then distributed to a local authority clearly would not. That must be the sensible approach. The fund will continue to work with voluntary and community sector organisations as they develop detailed guidance on this issue. While we are on the subject of the Big Lottery Fund’s undertaking, I should like to clarify the Government’s position, as I did in a letter last week to the noble Lord, Lord Clement-Jones, and others who spoke at the Committee’s first sitting. The fund has done everything possible to show that it intends to deliver on its undertaking and to do so in a clear and accountable fashion. We have every confidence that it will do so. I recognise very well the desire for reassurance on that matter, so I am this evening prepared to place on the record that the Government will act as the guarantor of the Big Lottery Fund’s undertaking that 60 per cent to 70 per cent of its funding will go to the voluntary and community sector. We will do everything possible to ensure that the fund delivers on the undertaking and reports on it in a transparent and accessible way. I return to the amendments—I have not lost sight of that which has promoted this debate. I stress that the important thing is what the lottery money is spent on, not who spends it. Clause 19 will ensure that deserving organisations which have been largely ineligible for funding can now be considered. In the light of that reply, I hope that the noble Lord will feel able to withdraw the amendment.