Lottery cash threat – charities’ warning

Charities are seeking urgent reassurances from government over a threat to Lottery cash for good causes.

The National Council for Voluntary Organisations (NCVO), which represents charities in England, and the charity leaders' network, ACEVO, said that plans were being made to raid Lottery cash to make up for cuts in arts and sports budgets.

The mooted move would see a £320m cut in the Big Lottery Fund's proceeds from the Lottery, a reduction in its share from 40% to 22%. The money would instead go to the Lottery’s arts and sports distributors in an attempt to compensate for DCMS cuts (1).

Given the Big Lottery Fund's existing future commitments, this would mean that it would effectively shut its doors to new bids for the next three years.

The fall would come as grant funding for charities has declined precipitously in recent years, with government grants halving in real terms between 2006/07 and 2012/13, from £4.5bn to £2.2bn(2).

Sir Stuart Etherington, chief executive of NCVO, said:

The Big Lottery Fund is the largest single funder of charities in the UK. It hands out a huge number of small grants to local charities that add enormous value to communities throughout the country. The Lottery was founded and has always operated on the principle that it adds to rather than replaces public funding. This would be a clear breach of that principle. It would be hugely damaging to the Lottery if players saw it as financing a government slush fund to compensate for spending cuts. This feels a very long way from the Big Society at a time when we need it more than ever.

Sir Stephen Bubb, chief executive of ACEVO, said:

Society can't afford to lose the life-enhancing Lottery grants that can transform communities. It would be catastrophic if the proposed slashing of Big Lottery Fund grants goes ahead. It would undermine smaller community charities and organisations. It would directly affect already hard-pressed communities and vulnerable groups like the elderly and vulnerable children. Lottery grants have supported innovative work in cancer advice and research. Few communities in the UK have not benefited from lottery good cause money. It is hard to believe that David Cameron would endorse a decision which would fall so heavily upon the most needy.

News of the plans, which government sources have been unable to deny, was first leaked by an anonymous group, 'Save Big Lottery'.

NCVO and ACEVO wrote to ministers earlier this week (copy below) and the charity bodies are now seeking urgent clarification ahead of next week's spending review.

For further information

Aidan Warner, senior external relations officer, NCVO 07714 243 942
Charlotte Ravenscroft, head of policy and public services, NCVO 07749 654 075
Simon Long-Price, head of media, ACEVO 07825 894 716

Notes

Founded in 1919 and with over 11,000 members, NCVO represents the voluntary sector and volunteering in England.

ACEVO is the UK's largest network for Charity and Social Enterprise Leaders. For nearly 30 years, it has provided support, development and a collective campaigning voice for 1,500 members across the UK, the leaders of small community based groups, ambitious medium-sized organisations, and well known, well-loved national and international not-for-profits.

1. National Lottery funding

This is currently distributed between four causes as follows:

  • Health, education, environment and charitable causes: 40%
  • Sport: 20%
  • Arts: 20%
  • Heritage: 20%

2.NCVO UK Civil Society Alamanac

http://data.ncvo.org.uk/

3. NCVO letter to Oliver Letwin<name="three">

16th November 2015
The Rt Hon Oliver Letwin MP
Chancellor of the Duchy of Lancaster
70 Whitehall
London
SW1A 2AS

Dear Oliver


LOTTERY FUNDING

I am writing as I understand that the government is currently considering the distribution of National Lottery funds to good causes and whether to alter the proportion of those funds that are distributed via the Big Lottery Fund (BLF). I am writing to seek clarification of these plans and confirmation that any proposal to change Lottery shares will be subject to a full consultation.

Last week, NCVO had the pleasure of hosting a lecture by Sir John Major, who established the National Lottery in 1994. As he reflected, the National Lottery has made a tremendous contribution to good causes since then, enhancing the lives of everyone. Those causes range from supporting children to older people, developing innovative ideas to preserving our heritage, and promoting participation in communities, the arts and sports. I would not wish to engage in a divisive debate about which causes are supported: all of these are valuable contributions to society and enrich our national life.

I would, however, like to stress the importance of the BLF’s grant-making to the charity sector and its beneficiaries. Its mission to support communities and those most in need is critical. Many NCVO members, alongside other organisations, are reporting an increase in demand from their beneficiaries at a time when funding is getting harder to come by. With over 95% of its funding going to voluntary and community organisations, BLF is the largest single funder of the charity sector in the UK. It is one of the few constants in an otherwise rapidly changing funding environment, particularly where funding from government sources has reduced from £15.2bn in 2009/10 to £13.7bn in 2013/14 and is projected to fall further.

Furthermore, the vast majority of the Fund’s grant awards are small in size (90% of the grants made are under £10k), often reaching the kinds of community groups and organisations that may struggle to access other funding sources. Previous evaluations show that the Fund’s applicants hold its open programmes - Awards for All and Reaching Communities – in particularly high regard, and that these programmes are considered to be proportionate and accessible [1]. Almost half of Awards for All grants go to organisations with a turnover below £25k [2].

The Fund has had a demonstrable impact not just through the projects that it funds, but also on the wider voluntary sector. It has set high expectations of charity applicants: ensuring that they have engaged service users in the design of their projects, met high standards of due diligence, and monitored their outcomes effectively. It has shared this best practice with other charitable funders and leveraged in additional resources those funders and from the private sector.

Taking all of this into account, it is clear that the Fund plays a vital role in supporting the charity sector and through it, our communities and those most in need. Millions of people’s lives have been directly touched and improved by the Big Lottery Fund; many more have benefitted from its influence. As politicians will be keenly aware, this impact is felt in every community and every constituency across the country. The ability of voluntary organisations to respond to the needs of their communities could be seriously impacted by any changes to funding available via BLF.

Additionally, the nature of BLF’s funds are such that many grants are committed years in advance. As such, I would be very concerned that a reduction of the size being reported in BLF’s share of National Lottery income could mean it all but closes its doors to new funding applications. This would affect thousands of charities and community groups that apply to the Fund each year, many of which will have invested in developing their services and funding applications.

If Ministers wish to review the proportion of Lottery funding that is allocated to each of the different distributors, a proper review would be needed. This would consider the current suite of good causes, take account of the views of Lottery players, as well as trends in Lottery funding, and wider sectoral developments. NCVO and others are currently drawing on open data from the Lottery distributors and could contribute new evidence about where Lottery funding is going, to which types and sizes of organisations, and to what effect. I would be concerned if snap decisions were taken in advance of such a consultative exercise, as it would be very difficult for government to identify the impact of any changes without gathering this evidence.

I would welcome clarification in advance of the Spending Review that Ministers recognise the vital role that BLF plays in supporting communities and those most in need, and confirmation that any proposed changes would be subject to full consultation.

I am sending a copy of this letter to the offices of the Chancellor of the Exchequer, Secretary of State for Culture, Media and Sport, Minister for the Cabinet Office and Minister for Civil Society.

Yours sincerely

Stuart


Sir Stuart Etherington

Chief Executive

  1. ‘Wherever there is money, there is influence’, TSRC, 2012
  2. Awards for All evaluation, 2013

4.Letter from ACEVO to George Osborne

Monday 16 November

Dear Chancellor

Recently our sector press carried an alarming story that suggested that you intend to transfer £320 million from the Big Lottery Fund (BLF) to the Department for Culture, Media and Sport.

Clearly this is a rumour and I know that you will not wish to comment at this stage in the spending review process.

I did, however, just want to put on record just how valuable the Big Lottery Fund’s contribution is to many charities and good causes across the land.

It has been a source of support for key services and also for innovation. It supports charities large and small and covers so many areas of work that are important in building stronger communities.

In the last year 95.6 per cent of BLF awards went to the voluntary and community sector. 91.3 per cent of last years’ awards were small, with a value of less than £10,000. The BLF also helps its partners to run long-term investments tackling major issues, such as meeting the challenges of an ageing population. The BLF offers tremendous value for money – its core operating costs in 2014/15 were 4.9 per cent.

Any diminution of funding on the scale that has been rumoured, some 48 per cent, would have profound effects on our charity and social enterprise sector.

Best wishes

Sir Stephen Bubb

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