Olympic Games 2012: Heritage and Arts Funding

My Lords, along with many other noble Lords, I congratulate the noble Lord, Lord Baker, on initiating this debate. It was a pleasure to listen to his incisive speech. It was also a great pleasure to listen to the speeches of other noble Lords, who displayed an impressive range of knowledge, expertise and, above all, commitment in so many areas of the arts, heritage and sport. What particularly sticks in the throats of many noble Lords in this debate is, as the noble Lord, Lord Baker, said, the Prime Minister’s speech at the Tate Modern, which promised no return to boom and bust in funding for the arts. It was a very short time ago, in March, that the bitter realisation set in that he is presiding in his final weeks over a cut in funding for arts, heritage and grassroots sports that will endanger the long-term cultural health of the nation. In March, the Secretary of State announced that a further £675 million, as we have heard from many noble Lords, would be diverted from the National Lottery good causes funds to meet the increased costs of the 2012 Olympic Games. It was a grim day for arts, heritage and grassroots sports. This new diversion means that some £2.2 billion will go towards the Games from the National Lottery. That is 20 per cent of lottery income for good causes from 2005 to 2012-13. After 2009, the proposed transfer of £675 million breaks down as £425 million from the Big Lottery Fund and £250 million from the other good causes. We have heard from all sides of the House how important lottery funds are to charities and voluntary and community groups in the arts, heritage and sport. The Heritage Lottery Fund estimates that, in 2005-06, 55 per cent of its lottery awards were made to this sector. Arts Council England estimates that it awarded about 60 per cent of its budget to the voluntary and community sector, while Sport England estimates that some 30 per cent of its funding has gone to voluntary and community organisations over the lifetime of the lottery. What does this mean in cash terms? Heritage charities stand to lose out on almost £50 million, arts charities on over £37 million, and sports charities on £16 million, which is a total loss of over £100 million. The Secretary of State’s Statement in March said that: "““We have also agreed with the Big Lottery Fund that resources for the voluntary sector will be protected and will, as it expects, continue to receive the £2 billion from the Big Lottery Fund between now and 2012””.—[Official Report, Commons, 15/3/07; col. 452.]" That voluntary and community organisations will not be affected is of only limited consolation. As the noble Lord, Lord Watson, rightly pointed out, much of the funding to local authorities and statutory recipients of funds from the Big Lottery Fund now being cut actually goes to arts, community and voluntary organisations. Further, the diversion affects recipients through other lottery distributors such as the Heritage Lottery Fund, Arts Council England and Sport England. Total awards from the Heritage Lottery Fund will fall from £255 million in 2007-08 to £220 million in 2008-09, and £180 million per year from 2009. Heritage Link, the Voluntary Arts Network, CCPR, the umbrella organisations for thousands of voluntary bodies in heritage, arts and sports, together with the National Council for Voluntary Organisations, which has over 5,000 members from the voluntary sector, are campaigning against the diversion of lottery funds. Members on these Benches and clearly many other noble Lords support the urgent call by these organisations on the Government to reconsider and to give assurances that no such further raids will be made. A loss of £62 million over four years to Arts Council England, a loss of £55 million to Sport England, and the loss to the Heritage Lottery Fund of £90 million will do great damage, despite the enormous care being taken by the HLF and other distributors to try and mitigate their losses. The loss to the HLF, for example, is equivalent to the loss of four years’ spending on smaller community and voluntary sector grants and the entire spending aimed at involving younger people—some 6,000 projects. That is a loss equivalent to the planned spend on churches and historic town centres from Gateshead to Great Yarmouth for four years—some 1,400 projects. It is a loss the equivalent of five years’ funding for parks, which in the past have included Birkenhead park in the Wirral, Tollcross park in Glasgow and Lurgan park in Northern Ireland. The HLF warned the Public Accounts Committee, which is inquiring into a National Audit Office report on the lottery distributor, about the potentially detrimental effects of diverting funding from the lottery. The evidence of Ms Carole Souter, director of the Heritage Lottery Fund, to the committee on25 April, when asked whether the Secretary of State had been told of the fund’s concern over diversion of funding, was: "““We have made clear that the needs of heritage outstrip even the funds we have available already and that, therefore, any loss of funding to the heritage is something we can ill afford and, yes, we have made that very clear””." The Historic Houses Association itself points out that currently there are some 17,000 buildings at risk in England alone. Let us not think that arts funding is only for our great national institutions such as the Royal Opera House. It is not even only for our orchestras, which have had spectacular success in attracting new audiences and will also be hard hit by losses in funding. The importance of arts funding is to enable grassroots community arts projects to thrive. As Tony Hall, the executive director of the Royal Opera House, pointed out in the Evening Standard in March, "““most of the Lottery funding for the arts is no longer going on these big-ticket capital projects. Instead, it now funds lots and lots of smaller-scale projects in communities up and down the country””." Anthony Gormley has forcefully made the same point. It is to enable the artistic landscape in Britain to innovate, experiment, develop and flourish. Noble Lords have made the point that 86 per cent of individual grants are for £5,000 or less. We are also to have the cultural Olympiad, which a number of noble Lords, including my noble friend Lady Bonham-Carter, have discussed so cogently. The noble Lord, Lord Coe, was very eloquent about the benefits of the cultural Olympiad. The year 2012 will be a showcase not only for British sports but for British arts and heritage. The cultural Olympiad, running in conjunction with the Olympics, is a unique opportunity for the UK to showcase its diverse and rich culture to a global audience. It does not make sense to cause potentially permanent damage and drain resources from these areas at a time when we should be building them up. This loss of funding coupled with the voluntary arts sector’s loss of trust in the Government threatens to erode its enthusiasm for participation in the cultural Olympiad and diminish the benefits of any subsequent legacy. My noble friend referred to the relaunch on three occasions of the Olympic Legacy Trust, which seems rather extraordinary. That fund, sadly, is also funding many other projects, such as the school games. What should be done? The public do not want to see a raid on lottery funding for good causes. The YouGov poll recently commissioned by the NCVO demonstrates that the public support the campaign to ensure that no further lottery good cause funding is diverted due to the 2012 Olympics increasing infrastructure costs: 67 per cent of those polled said that they disagreed that more money should be diverted from lottery good causes. Will the Government rethink this raid on the lottery? As many other noble Lords have pointed out, the Secretary of State on 23 April said of the diversion: "““I see this as more of a loan””." What exactly does that mean? As the noble Lord, Lord Marland, asked, is this an absolute guarantee of repayment out of the proceeds of increased land value? Who will get the benefit of the regeneration of that part of London? Will it be the LDA or will the lottery be able to claw it back? Will the Minister give an assurance that there will be no further diversion of lottery funds? To date, the Government have treated the National Lottery as a cash cow. As the noble Lord, Lord Watson, mentioned, Camelot has so far succeeded in mitigating some of the effects of the diversion of funds. It is quite clear, reading between the lines of its current briefing, that there are problems aheadfor Camelot in riding successfully two horses simultaneously and making sure that both the mainstream lottery and the lottery for the Olympic Development Fund will be funded and on track with current plans. What else can be done apart from treating the raid as a loan? There is the possibility of a lottery tax regime change, which we on these Benches have raised before and which was discussed when we debated the Bill on the Big Lottery Fund. The lottery is subsequently taxed on its turnover. Switching to taxation based on profits would allow the operator to invest more of its revenue into growing its business. We believe that that would improve revenue. There is, of course, the possibility of improved enforcement. Camelot argues that a clampdown on the legally grey area of lottery-style games would increase revenues, which could all be put towards the Games. We on these Benches are great supporters of the Olympic Games, but the Government must mitigate the problems raised by this diversion of funds. It would be tragic if the Government’s actions set the interests of the Olympics against those of the arts and heritage. I very much hope that in his reply the Minister gives some creative thought as to how that mitigation can take place rather than simply attempting to justify the Government’s actions.