Olympic Games 2012: Heritage and Arts Funding

My Lords, I am especially grateful that my noble friend Lord Baker was successful in the ballot for this debate and for how he introduced it. I declare an interest as a trustee and chief executive of a charitable trust preserving the finest castle ruin in the north of Scotland, the only castle in Scotland to be listed by the World Monument Fund on its watch list, published every two years, of the 100 most endangered sites in the world. It has received two small grants from HLF and may receive more in future. I am also a trustee of other heritage and arts charities that are likely to apply to the HLF. Like many, I was a keen sportsman in a number of games but never at a high level, and still enjoy watching a variety of sports. The HLF has been a huge success and this country has benefited in a number of ways from its work. We owe it a vote of thanks for what it has done in the past, but its role has changed and the future is bleak. I, for one, was never a fan of the British bid to host the Olympics in London and my heart sank when the decision was made. It was abundantly clear to me even then that the Government had significantly underestimated the projected costs and that, as a result, we would all end up paying considerably more than envisaged. I anticipate more rises in costs and, doubtless, more cuts for the arts and heritage, whatever the Minister says today. Whether the unrealistic bid was deliberate or naive has not been proven, but I have no doubt which it was. Imagine submitting such an application to the HLF for a project. If one went back to the HLF shortly after a grant had been agreed and said that the costs were nearly three times the estimate, one can visualise its reaction. Some cost changes are always likely with a major project, but a trebling in the space of a year? No one in the private sector could behave in that way and get away with it, but the Government can, because they are abusing other people's money in an unethical way. Let us be clear about the consequences of that unhappy situation. The Olympic infrastructure will take one-sixth of the lottery pot during the years between London winning the bid and the Games. The HLF will lose £161.2 million, as well as revenue through reduced sales of non-Olympic lottery games. Its share of lottery tickets will drop by more than10 per cent between 2007-08 and 2011-12. In real terms, it will be considerably more. The heritage of our country is being severely jeopardised and the damage has already started. The HLF business plan shows that, in 2004-05, Scotland was allocated £14.2 million for grants under £2 million. By 2007-08, that has already been slashed to£12.1 million. When the extra contribution of£90 million was taken by the DCMS this March, the HLF announced that, rather than making deeper short-term cuts, it would absorb the impact over a longer period, so the pain will continue past 2012. There is no possible way in which the HLF will be able to support the full range of heritage projects that people care about. What will all this mean for grant applicants? To date, the HLF has generally been able to fund all good projects that have come to it. Rejected projects have generally been those with perceived weaknesses. This has changed, however, and we have begun to see that the HLF rejects not only projects with perceived weaknesses but good projects. Furthermore, the HLF’s shift of emphasis from preserving pure heritage projects to those with substantial community involvement, and its increasing use of apparently arbitrary economic considerations to justify refusing a project, are a severe threat to the more rural heritage projects, especially where there is no local or national authority involvement. All this is having a series of adverse consequences. In addition to the direct effect of good projects not going ahead, we are beginning to see that good concepts are not being developed into good projects, as project promoters—be they local authorities, national institutions, or, as many noble Lords have said, independent trusts in particular—reassess their chances of securing project funding. If even good projects are not to be funded, why bother to incur the significant development costs? As an immediate response, the HLF must cut the development costs and provide meaningful feedback before organisations have to spend upwards of £500,000 developing some of the large projects. There will, of course, be a wider impact in loss of opportunity. How can we have a serious debate on cultural entitlement, built on the foundations of what the HLF has achieved to date, and then starve it of investment capital? The effects of this loss of opportunity will be felt nationally, regionally and locally. The UK’s reputation has undoubtedly been enhanced by cultural projects; the Tate Modem is a great example. Regionally, Kelvingrove, the Museum of Scotland and the National Waterfront Museum in Wales are all evidence of the wide impact of lottery funding. Locally, many communities have benefited from revenue and capital projects. This has increased tourism and local spend, which, particularly in rural areas, has been vital in keeping communities together and offering job opportunities. To some, the Olympics may be very worthwhile, but why must we jeopardise the national, regional and local impact of National Lottery Fund projects for a package of benefits that in no way replaces these? The impact on funding from now to beyond 2012 has robbed the heritage and arts sectors of much of the vitality engendered by lottery funding. The loss of funding will create a legacy from which it will take considerable time to recover, even if investment returns to pre-Olympic levels once the Games are over.