National Lottery Bill

My Lords, I am grateful to both noble Lords who have contributed to the debate, although I must say that I have not heard arguments today which are very different from those presented in Committee. Therefore, I am sure noble Lords will not be surprised that my response is very much along the lines of the response I made in Committee, if only for the purpose of consistency. Amendments Nos. 1 and 3, as the noble Viscount, Lord Astor, pointed out, seek to remove the Secretary of State’s power to prescribe expenditure regarding the new Big Lottery Fund good cause; and Amendment No. 14, which I am pleased to see included in the group, would provide that the Big Lottery Fund must take into account rather than comply with any direction given to it by the Secretary of State. It was not just in Committee that these issues were discussed; there was intensive discussion in the other place. I recognise the strength of feeling on the other side of the House on these matters, but we also feel strongly that the concerns that have been expressed are unfounded. We have had a considerable time to consider these arguments since they were first voiced in the other place some time ago. Noble Lords are speculating on the powers in Clauses 7 and 14 and how they will be used. We think that we have taken out the issue of speculation because we have published an illustrative draft order and directions. We sent these out to all noble Lords interested in the Bill and of course placed them in the Library. It is open to noble Lords to be suspicious about the Government’s intentions, but suspicion is usually based on the fact that information is being withheld. I do not think that the Government could have been more open than they have been about how they intend to interpret this Bill if it becomes an Act in terms of the order and directions which we will employ. Every commitment that we have given, even those where the commitments are firmly on the record in this House or another place, are largely being disregarded. Therefore, I do not think it is for me to make a very long speech today against these amendments. Without the power to prescribe expenditure, the Big Lottery Fund would be given 50 per cent of all the lottery good-cause money to spend on anything that is charitable or connected with health, education or the environment without any further recourse to Parliament. I understand that the noble Lord, Lord Clement-Jones, views this with complete equanimity. The Government disagree with him. We do not think that it makes sense. The large new spending area of health, education and the environment, which we created in 1998, has of course proved popular and successful. It has enabled thousands of worthwhile projects to be funded, including ones which have benefited more than 30,000 World War II veterans, war widows and carers. It has helped to provide more than 2,100 village halls and community buildings. The new Big Lottery Fund good-cause funding brings these areas and the charitable expenditure distributed by the Community Fund together, allowing an enormous range of projects to be encompassed. This is a good thing, and it is one of the main reasons why we wanted to bring the Community Fund and the New Opportunities Fund together. But it creates a very different kind of good cause from the existing arts, sport and heritage good causes. Arts, sport and heritage are much narrower areas, and the existing legislation narrows things further by prescribing sums to be distributed by different distributors. As I said in Committee, this not only limits who can spend the money, but restricts what the money can be spent on. For example, prescribing the percentage to be distributed by the UK Film Council in effect prescribes the percentage of money for the arts good cause that must be spent on film. In 1993, Parliament took the view that such arrangements were necessary to ensure the effective distribution of lottery money. That degree of prescription has obtained in the lottery since its inauguration. The powers we are proposing in the Bill have a similar effect, and we believe that they are just as necessary now as they were in 1993. We need to be able to set out at the highest level the types of expenditure that the Big Lottery Fund should focus on. I emphasise that we are obviously talking about broad areas of expenditure. We are not talking about programmes or projects, or about the split between the four parts of the good-cause funding or between the four countries of the United Kingdom, and we are certainly not talking about specific grants. We have made an illustrative order demonstrating how the power to prescribe expenditure will be used in practice. We could not be clearer about our intentions, and I fail to see what more we could do to assure noble Lords on the opposition Benches. Yet, to my knowledge, no one has found anything concrete to object to. I take that as evidence that the concerns we have heard so much about do not have much basis in fact. It was suggested in Committee that the Bill would give the Government more power over the Big Lottery Fund than was afforded over the New Opportunities Fund in the 1998 Act. I contend that that is simply not so. The 1998 Act limited the New Opportunities Fund’s spending to initiatives specified by order by the Secretary of State. Those initiatives tended to be much more narrowly focused than the broad themes we are proposing for the Big Lottery Fund. I am in no way saying that the approach towards the New Opportunities Fund was wrong. Indeed, it was very successful. It provided a strategic focus for lottery funding, and had a much more prescriptive approach than the one we are proposing in the Bill for the Big Lottery Fund. The noble Lord, Lord Clement-Jones, mentioned that my noble friend Lady Pitkeathley was not here; I regret that too. Oh! I am glad that she is present. She has considerable experience of these issues, and she made it quite clear in Committee that the New Opportunities Fund experienced no government interference in specific expenditure. I should also make it clear that the ability to prescribe devolved expenditure is central to devolving more decision-making to Scotland, Wales and Northern Ireland, which is the aim of the Bill. I am afraid that Amendments Nos. 1 and 3 would mean that the devolution arrangements in the Bill would not work. They would retain power for the Secretary of State just where the Government intend to devolve it. That seems somewhat ironic, given the Opposition’s perceptions, which we have all heard, of the Secretary of State’s excessive control. We cannot accept Amendments Nos. 1 and 3, and I ask noble Lords to consider not pressing them to a vote. Amendment No. 14 would require the Big Lottery Fund to take into account, rather than comply with, any direction given to it by the Secretary of State. All lottery distributors are required to comply with directions about financial and operational matters, which are set out in new Section 36E(3). Such financial directions incorporate financial controls designed to protect public money by insuring that distributors comply with basic financial and operational good practice. The requirements placed on the Big Lottery Fund by new Section 36E(3) are exactly the same as those placed on other distributors in Section 26 of the original 1993 Act, which set up the lottery. We do not see any reason for change. Section 36E(2) sets out the powers to issue policy directions. I emphasise that the powers have been drafted in the way that they have in order to bring together the different regimes of control that existed over the Big Lottery Fund’s prior bodies, and to bring them together in a coherent way. Both the Community Fund and the New Opportunities Fund had to comply with policy directions. The Community Fund, like other lottery distributors, was required to comply with any directions given to it by the Secretary of State as to the matters to be taken into account and to determine the persons to whom, the purposes for which, and the conditions subject to which it distributed the money. The key difference between that requirement and those set out in the present Bill is in the matters to be taken into account. A statutory requirement to comply with directions as to the matters to be taken into account is a real legal obligation. The Community Fund could not pick and choose which direction it complied with; it had to take all the policy directions into account and could decide to ignore them only under exceptional circumstances. This debate has therefore become overly focused on a narrow point, when the real issue is how the powers of directions will be exercised. We have given repeated commitments that we will adopt a light touch on direction of the Big Lottery Fund—we said so in stages of the Bill in the other place, I said so in Committee in your Lordships’ House, and I reiterate the point today. We demonstrated our integrity with the issue of new interim policy directions for the New Opportunities Fund and the Community Fund. These directions are, as far as possible under the existing legislation, the same as those we will issue in due course to the Big Lottery Fund, and our intention is set out clearly in the illustrative directions that we have made available to the House and which we propose to introduce after Royal Assent. Both the interim and illustrative directions are very different from the type of directions issued in the past to the New Opportunities Fund, although those were also applied with sensitivity and consideration. They provide the means by which the funding outcomes and priorities agreed with the Government and supported in the Big Lottery Fund’s consultation will be delivered. But they do not—and I emphasise this point again—prescribe how they should be delivered, or preclude other worthwhile priorities being funded. They will allow the fund full scope to make decisions on programmes, choose delivery mechanisms, identify partners and select projects informed by intensive public consultation. In conclusion, I hope we can focus on the real issue and put this matter to bed now once and for all. I hope that noble Lords will recognise that we are not being overly prescriptive; we are making it quite clear how these powers will be exercised and I hope that with that level of reassurance the noble Viscount, Lord Astor, will feel able to withdraw his amendment.