Whose money is it anyway?

At the moment, we have no say whatsoever in how National Lottery money is spent. Martin Wainwright h

There are few things you are less likely to do than win a National Lottery jackpot, but one of them is to have any direct say in the distribution of its weekly loot to the "good causes". The giant pot of gold is, and always has been, in the hands of appointed quangos. And these, since the accession to power of new Labour, have had a very proactive government breathing down their necks.

There have been some flashes of radical light amid a fog of alleged initiatives meant to "encourage involvement", but in general the ten years of Lotterydom have been a wasted opportunity for experiments in getting citizens to help run the state.

This is widely regretted by reformers (and by Camelot), because Lottery funds are an unusual asset - neither public nor private and very much an afterthought for ticket-buyers whose only motive, in all but a handful of cases, is to get rich. Dispensing the funds has offered, and could still offer, a unique chance for taking administrative risks, piloting constitutional changes, and giving the public a real voice.

Who makes the decisions at the moment? There are lots of committees and panels, but only three distinct methods of supervising how they work. The first is the unashamed "top-down" approach of giving a free hand to seasoned quango operators and experts in the various fields, because they are the people who know. This has worked efficiently for the Heritage Lottery Fund, which doles out support for everything historical - from stately homes to oral records of the 1984/5 miners' strike.

It was disastrous, however, for the Millennium Commission, the most august of all the distributors, as the ultimate political boss of the Lottery, the Secretary of State for Culture, Media and Sport, is automatically a member. The concept of "experts and people who know" foundered on the disaster of the Millennium Dome, a novelty based on guesswork. Many smaller projects from the Commission, which stopped getting Lottery funds in 2001 but will take until 2006 to dispose of them all, have shown the same caprice and lack of business plans.

The second approach is the tucking of the Lottery grant-making system beneath the wing of long-standing bodies with wider remits - mostly quangoid, but with all sorts of links into the community, some flexible and quasi-official, others statutory and tied to local authorities. This applies to all arts grants, through the Arts Council, and all sports ones, through Sport England and its equivalents in Scotland and Wales. The principle differs little from the "top down" approach, but the practice has been more innovative, giving the public chinks through which to spy, or even sometimes air, their views.

But it, too, has produced its share of disasters. The decision to give more than £50m to the Royal Opera House in the earliest days of the Lottery queered the pitch for smaller arts projects and fomented suspicions of a closed, "luvvie" world. The Arts Council did not help by centralising its operations during the Lottery decade and moving big decisions away from the grass roots.

The third approach is the most promising for real change. Its workings are currently the subject of a major consultation and it is the most important debate within the Big Lottery Fund at the moment. Like the other two approaches, the distribution system is almost entirely in the hands of appointees, but they have a small number of more democratically chosen colleagues. They also work to a plan devised after an enormous, regularly updated audit of the voluntary and charitable sector, which outlaws "cherry-picking" from applicants.

The system was the brainchild of the National Lottery Charities Board (renamed the Community Fund in 2001), one of the five original distributors set up by John Major in 1995, and an extraordinary creation for a Conservative government. Although chaired by a former treasurer of the party, David Sieff, it was staffed with lively innovators. Its vast consultation with voluntary and charitable groups produced lasting support for a simple mission statement: to help those at most disadvantage. The Charities Board devised an awesome machinery that was robust enough to defend controversial grants - and the Daily Mail was soon in action against asylum-seekers or gay and lesbian groups.

More importantly, it provided a firm, audit-proof platform for some nice constitutional footwork: picking committee members by the random process used to select court jurors; meetings open to the public; the targeting of deprived areas that had missed out on their fair share of Lottery funds.

The Conservative government shuddered at some of these initiatives, but honoured John Major's crucial promise at the outset that Lottery distributors would be independent. Not so new Labour. One of the Blair government's first moves was to create another distributor, the New Opportunities Fund, who went pell-mell into funding health and education, previously out of bounds as they were considered to be services that should be paid for from tax.

The two funds were paired up last year in the Big Lottery Fund, and the great issue at stake is which culture will now dominate? Or, intriguingly, can they somehow be spliced? Tessa Jowell, the current Culture Secretary, may be ridiculed when she insists on the BLF's independence, while at the same time announcing (in September) what the government says the body's first three grant-making programmes should be. But she can counter this with the fact that the people are behind her. New focus groups, local polling and public meetings held by the Lottery distributors, all say: spend the money on education please, and health.

The result, say pessimists, will be the total loss of the Lottery's supposedly "extra" money over and above the mainstream spending that ought to come from tax. But there are optimists, too. Lord Nolan's reforms mean that quangocrats are drawn more widely than before - check out the membership of Lottery committees and see how the un-English practice of applying to join a quango because you're keen and good and have something to say, rather than waiting for an old chum's murmur in the ear, is catching on. And the random selection system has brought in a very diverse bunch who would never have thought of applying: an ex-majorette from Barnsley, a Birmingham health visitor, a York teenager at university in Sheffield, an electricity engineer from Kent.

The Commons select committee on public administration singled out these "political jurors" as an idea that should be more widely tested, citing Tom Paine on the ordinary citizen's "mass of sense lying in a dormant state". Radical Tom added: "The construction of government ought to be such as to bring forward, by quiet and regular operation, all that capacity." Maybe with the government in the saddle and its Lottery priorities popular, the next ten years will see that happen.