How the good causes got lucky

Lottery cash was originally given in huge chunks to the prestigious big boys. But the emphasis has s

It's exactly five years since John Major's balls first dropped and seven since parliament voted them into existence. It's easy to forget that something sold next to the chocolate bars in the corner shop and promoted on telly by Bob Monkhouse and Dale Winton is a political creation. But it was Major's standing firm against the stout opposition to the concept by Margaret Thatcher that set the ball rolling (it's impossible to write about the National Lottery without ball metaphors surfacing).

The debates on the original National Lottery Act now appear to have a sense of naivety about them. The then heritage secretary, Peter Brooke, talked languidly about using the money for 12 grands projets around the country and everyone discussed the headache of what the five "good causes" would do with the predicted joint income of £250 million a year. A prescient figure, for £250 million was exactly what the arts, sports, heritage, charities and millennium boards had to spend - each.

The Lottery may be a politicians' creature, but it was one that had almost no strategic thought at the outset as to either its purpose or direction. The only pre-launch rules of the game were that Lottery proceeds were to be spent on capital projects only; applicants would have to match the awards with the same amount in cash; and provision would be demand-led.

It was not so much a strategy as an anti-strategy, which rapidly proved unworkable. Several billions of pounds later it seems obvious that poor museum and theatre administrators were never going to find anything like that amount to offer up in matched contributions. Some of the richer ones might manage some of it, but regional bodies never would. Before long, the match-funding requirements were diluted - and rightly so - but the disparity between those who got lucky and the rest had already become clear.

But it was the demand-led aspect that proved to be the biggest cause of unequal distribution. First of all, it paved the way for the big boys to grab the architects' drawings gathering dust in their bottom drawers and push, elbows jutting, to the front of the queue. The huge awards to the Royal Opera House, Tate Bankside and the Royal Albert Hall and the purchase of the Churchill papers took 21 per cent of all the money for good causes in the first year. But the system also placed a barrier on the traditional role of voluntary-sector organisations seeking financial support, by preventing them from arguing for a share of the money for equitable purposes, for example in relation to need or deprivation. This wasn't just discouraged: it was legislated against.

The Lottery boards were bound not to allocate on any grounds other than those related to the integral nature of the project itself. Success in gaining funding was to be based on the intrinsic strength of the business plan presented. Thus there was no requirement, for instance, to assess the impact of that new theatre or that refurbished leisure centre on the locality or region. There was nothing to stop you making great play in your application of how well your plans fitted into the region's 20-year regeneration strategy; there just wasn't a tick box on the assessors' checklist to allow it to matter.

In hindsight, it is clear that the assessors of some boards - notably the English Sports Council - favoured strategically relevant projects. It made sense. But their decisions followed no set pattern, nor were they publicised, so they provided no encouragement to other potential applicants, who remained unaware of any sympathy within the boards.

At least the ship had been launched, though, and 4,308 awards were made in 1995. It took longer to identify the next problem being created by a rigid structure that favoured mainly capital awards. This was that people could have fine new buildings, but without revenue grants they were still struggling, exactly as in pre-Lottery days, to find cash to pay people to switch on the lights, clean the toilets and even act on the stages.

This year, several recipients of substantial awards, whose business plans had been structured on hugely optimistic predictions of future revenue from ticket sales, are in deep trouble. So far, they include the Sheffield Pop Music Centre and the Doncaster Earth Centre. Expect more.

But before the scale of these problems fully emerged (though not before the onset of unjustified anti-London sentiment - it was only ever the central boroughs who were getting the big bucks from the Lottery), the masters of the National Lottery changed. Out went Virginia Bottomley, in came Chris Smith.

And change came thick and fast. We have had so many new directions, strategies and announcements, a second National Lottery Act and a new Good Cause to adjust to, that Chris Smith announced to weary relief at Lottery Monitor's annual conference: "What we probably need now is a period of stability . . . [and not] the foment of change we've had over the past 12 months."

Smith made no secret of what he wanted to achieve. It was to "establish a completely different framework for Lottery funding". The concept had been stated - with a heavy lacing of new Labour-ish pretension - in the party's pre-election Lottery document. I have added italics to help you spot the salient points. "By resourcing a variety of specific, time-limited fields of activity, we can change the context of Lottery distribution from a permanent and dependent fixture to a responsive, flexible and enabling system."

That means spotting a problem in society, identifying achievement targets, setting a timetable for eradicating it, then spending a lot of money to zap it out of existence before moving on to the next bad thing. Very dynamic, very new Labour. And since he's made a success of it, we should acknowledge, very Chris Smith.

It is what the New Opportunities Fund (NOF), aka "Sixth Good Cause", is about, and it is to be given huge resources to achieve its purpose. When the Millennium Commission ends in 2001, the NOF will get a third of all Lottery money for good causes, wealth that will rank it alongside the huge grant-giving institutions of Europe such as the Wellcome Trust.

The NOF has been set on the task of tackling social exclusion by the creation of after-school clubs and other measures to help home-bound mums. It has just made a huge series of grants for the purchase of scanners and X-ray machines for cancer treatment. A huge programme of "Healthy Living Centres" is on its way.

"A coach and horses through the concept of additionality," the Conservatives cry, referring to the principle that Lottery money shouldn't go to areas of central government spending such as health and schools.

If they have a point, it's not one that the voters agree with. Lottery Monitor has just completed a national opinion survey, which found that the public put health and schools above even sport as their preferred areas of Lottery expenditure. For Chris Smith, it's a non-argument: take a look, he says, at a ny existing scanner in an NHS hospital and the odds are that you'll find a brass plaque on the side thanking the charity that donated it.

The new Lottery era under Smith is certainly "enabling". Before, there was no requirement for fair regional distribution, no priority for areas of deprivation, no room for manoeuvre on partnership ratios, no powers to go out soliciting applications from areas or sectors that have been slow in coming forward.

Now the boards have been given executive "directions" to ensure that funds go to all parts of the United Kingdom, use their money to help areas with social and economic deprivation, set lower match-funding rates for certain types of projects and geographical areas and give favoured status to youth, children's welfare and play projects. Competition for the money, however, is to remain. "The normal process of applying for and receiving Lottery funds continues to be on the basis of . . . unsolicited applications," the directions state.

So, as we pass the fifth anniversary of the Lottery, the question must be: has it worked? It's easy to be cynical about the Lottery, in fact it's almost mandatory. But if this issue of the New Statesman were to print a list of awards so far, it would be as thick as a telephone directory. That's an awful lot of large and small projects that have emerged blinking from decades of cash starvation to enjoy some kind of a kick-start to their hopes and dreams.

And Chris Smith's reversal of the anti-strategy can be measured in cash terms. In 1998, there were 140 awards for sums in excess of £1 million balanced with 6,695 for sums of £100,000 or less. Quite a turnaround from those four awards that took 21 per cent of the money in the first year.

Alasdair Buchan is the publisher of "Lottery Monitor" (01273 702504)

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