Dormant Bank and Building Society Accounts Bill [HL]

My Lords, the noble Lord, Lord Shutt, made a similar speech in Committee, which I greatly applauded. I am happy that he has produced an encore so that I can offer my applause again. In fact, I shall quote what the noble Lord said in Committee. He did not quite repeat himself, so I shall delight the House by showing how extraordinarily accurate and perceptive he was. He said: "““If one spends 12 per cent in giving away 88 per cent well and doing a proper and thorough job of it, it is far better than giving away 100 per cent and being clueless about it””.—[Official Report, 15/1/08; col. GC 470.]" That is graphically put; I could not express it as well myself, which is why I indulged in the quotation. I am grateful to the noble Lord for his contribution today, too. The necessity of bearing down on administrative costs is, of course, continually with us. We share that objective with the noble Lord, Lord Howard. Like the noble Lord, Lord Shutt, we do not think that Big’s current spending is outrageously large, given that Big is involved in complex disbursements of money. That brings me to whether an annual cap would make any sense. The noble Lord, Lord Howard, has vast business experience, so I shall not venture down any road in trying to enlighten the House on areas that he knows inside out and far better than I do. However, for a body that operates, as Big does, a portfolio of operations over time—commitments are for more than three years and payments are made over five years or more—an annual cap would be the most extraordinary and arbitrary intrusion. I do not think that it would fit within the framework of any business that operated in quite the way that Big does. Let me take the most obvious example. When Big deals with issues in this account, such as providing support services for young people, we would expect it to consult not only those who can provide the services but young people themselves, so that young people are actively engaged in shaping the bids for community resources. That kind of activity can be prolonged; it is not the kind of thing on which one strikes a deal overnight with a handshake. One is not dealing with these groups on those terms, nor is one meeting needs expressed in those terms. We want to give Big the flexibility to meet its distinct and often difficult objectives, which it has experience of doing through the lottery. It currently operates with a degree of flexibility that the amendment would come close to destroying. I assure the House and the noble Lord that we are concerned about the accountability of the distribution costs of lottery funds. The Big Lottery Fund is legally required under the National Lottery Act to comply with a statement of financial requirements issued by the Government, which makes clear the fund’s responsibility to ensure that its finances are managed appropriately. We also have the accounting officers for the departments in which the fund is spending money. As far as this account is concerned, that would be the Department for Children, Schools and Families—I know that that department has not found too much favour on the Benches opposite—and the Secretary of State would sign off the accounts. Big’s administrative costs will be subject to the accounting officers of the departments and of the devolved Administrations. There is a clear accountability framework. We have had considerable experience of this with the operation of the National Lottery. I hear the criticisms of Big’s expenses, but the noble Lord, Lord Shutt, is right in principle. Big is involved in difficult community and local work and you cannot expect it to hit the same target levels as might occur with those much simpler operations—even those involved with such resources—with which it is sometimes compared. The amendment is also worried about the defrayment of the Government’s expenses. Aren’t we all? It is our job to make sure that Governments keep their own administrative costs down. I put this basic point to the House: for the administration of the distribution of lottery funds, the Department for Culture, Media and Sport charges the National Lottery Distribution Fund about £250,000 a year, which is less than 0.02 per cent of what is raised for good causes each year. The Government estimate that the costs in relation to the reclaim fund will be less in cash terms, because it will be a smaller fund. I do not think that there is great cause for anxiety on that score with regard to government accounts and I hope that the noble Lord will feel satisfied enough to withdraw his amendment.