The Commons Public Accounts Committee (PAC) Report, published
on 18 October, condemned the fact that so much money was sitting in the
accounts saying: "Lottery money does no good sitting in the National
Lottery Distribution Fund since the public benefit is delivered only when
the money is spent in the community".
It also highlighted the distributors' failure to meet
targets for reducing the amount held in the fund. In addition to not having
halved the overall balance by 2004, in some cases the sums held by individual
distributors had increased.
The New Opportunities Fund, which now comes under the
remit of the Big Lottery Fund (BLF), and the Heritage Fund hold most of
the money. In May 2005, they jointly held £1.5 billion, accounting
for 64% of the total balances.
The BLF said that it was committed to bringing the benefits
of Lottery good cause funding to communities as efficiently and effectively
as possible, however, "the challenging targets set for the year ending
31 March 2005 were not met due to higher than expected income from the
National Lottery and significantly slower than forecast drawdown of grant
funding by grant recipients".
The Department for Culture, Media and Sport (DCMS) said
that it was currently working with the lottery distributors to make more
progress on reducing the balances, and highlighted the fact that the National
Lottery Bill contains measures that should help further.
These include changing the allocation of interest payments
in order for all the distributors to get a share of the overall total
"so there is no longer an incentive, if ever there was one, to hold
onto a high balance", and the ability to move funds from one distributor
to another if one particular body was failing to act correctly.
"However, the good causes earmarked to receive the funds won't change,"
said a DCMS spokesperson. "This is also very much a last resort and
not something we envisage using."
The National Lottery Bill will also formalise the merger
of the New Opportunities Fund and the Community Fund into the Big Lottery
Fund. It moves back into Committee Stage on 25 October.
