There’s an awful lot you could do with £18.6 billion. Given the chance, you might use it to announce a cure for Aids or malaria: Bill Gates’s charitable foundation, the world’s largest, has invested just a fifth of that on fighting disease, yet already the man from Microsoft is hailing the potential to save millions of lives each year. Alternatively, you could be the first to confirm extra-terrestrial life, if indeed it’s out there, with triple the extra budget that George Bush has allocated for Nasa’s vastly ambitious five-year programme of manned trips to Mars and the moon. Should your goals prove more Earthbound, you could instead win humanity’s unbounded respect for taking the most determined step yet towards eliminating global poverty. Sure, it’s not quite the £46 billion that the UN says a comprehensive international relief package would cost, but sign the cheque and you’d have a pretty decent down payment.
You see, £18.6 billion is real money – more than Ingvar Kamprad has assembled from Ikea flat-packs, more than Lakshmi Mittal has built up from his steel empire, greater even than the combined wealth of Roman Abramovich, Sir Philip Green and the Duke of Westminster. If we were talking about a country, it would rank by GDP somewhere between Luxembourg and Croatia, putting it among the top third of the world’s economies. Turn it into ready cash, and you would have enough £1 coins to build a theoretical pile 58,590km high. When it came to spending it, your money would buy 13,285 Labour peerages (assuming average costs to recently named donors of £1.4m in gifts and loans), give every single UK registered charity an £88,770 windfall, or pay 10,790,094 drivers’ London congestion charge for a year. Or you could simply hand £310.85 in cash to every man, woman and child in the country.
In other words, £18.6 billion – the amount raised by the national lottery so far to support “good causes” – has the potential to enhance radically millions of people’s lives. When John Major, then prime minister, launched the lottery back in 1994, he saw it as “the only way we could fund a rebirth of cultural and sporting life in Britain” – an ambition abundantly fulfilled, according to the Department for Culture, Media and Sport, by what it calls “the largest programme of civic regeneration since the 19th century”, which has “touched every aspect of UK life”. Undeniably, the 240,000 separate awards made so far – funded by the 28p “good cause” element of every lottery-ticket pound – have allowed otherwise unaffordable projects to happen, from local after-school clubs to showcase national exhibition spaces. Yet how effectively have the people’s lottery billions been spent? Have we gained all that we should expect from such a large cash pile? And who have been the true beneficiaries of such widely spread munificence?
Since February, when the government closed a large-scale consultation on how “good cause” money should be distributed after 2009, The Sunday Times Magazine has been conducting its own detailed audit – visiting local and national lottery-funded projects, interviewing key funding decision-makers and their critics, scrutinising financial accounts and ministerial memoranda. A constant theme was the high level of controversy attached to the distribution process at every level, from concern about politicians’ involvement in directing spending, to accusations of mismanagement and financial incompetence on the ground.
For every garlanded Eden Project or Tate Modern, lottery funding has bequeathed a failed National Centre for Popular Music or a heavily overspent Sadler’s Wells. The sports funding bodies may claim credit for boosting Britain’s medal count at the Sydney Olympics, but they also have to answer for the £120m pumped into an embarrassingly late Wembley stadium. And beyond all the local-paper plaudits for new cycle paths and refurbished village halls, the national press has been more concerned to expose “bonkers” grants to help the likes of Peruvian guinea-pig breeders at the expense of life-saving Samaritans groups. The more pervasive criticism, however, is that the government has reneged on earlier commitments not to use lottery money to cover gaps in its own spending. With awards now strongly weighted towards fields such as health, education and the environment, has lottery cash become just an alternative revenue source for Gordon Brown and his colleagues to raid?
There might have been no national lottery had stampeding Liverpool fans not caused the deaths of 39 Juventus football supporters at Heysel stadium, Belgium, on May 29, 1985. Denis Vaughan, an Australian-born orchestral conductor then working in Italy, was deeply troubled when local friends bluntly blamed the tragedy to him on “the English not knowing any better”. One solution, Vaughan suspected, might be “culture” as a force for national rehabilitation. With substantial new investments in the arts, he felt, an enlightened government might eradicate the boredom he believed was fuelling such uncontrolled outbursts of aggression.
So when Sir Claus Moser, chairman of the Royal Opera House, approached him for ideas two years later about funding a radical redevelopment at Covent Garden, Vaughan saw his moment. In a letter to Margaret Thatcher in May 1987, under the heading “Barbaric Britain”, he urged her to include in her election manifesto an innovative national lottery whose income would house and endow Britain’s leading classical-music companies, thus ensuring there was “culture in the blood”. Thatcher showed no interest, but, backed by his billionaire friend Paul Getty, Vaughan continued to lobby politicians, think-tanks and arts bodies. Finally, John Major listened, making the lottery a key plank of the 1992 Conservative manifesto.
“I see the national lottery very much as my baby. But in terms of how they’ve spent the money, I’d give them 3 out of 10,” Vaughan says. To him, the lottery has proved a wasted opportunity. Vast sums have gone on bureaucracy and “dubious causes”; the funding bodies have miserably failed to transform local communities or enhance the nation’s cultural spirit.
Vaughan, 80, believes the bureaucracy which comes with government involvement stands between smaller organisations and lottery grants. “The organisations that need money the most can’t afford to hire the consultants and lawyers it takes to make their applications,” he sighs. “In general, these grants aren’t affecting the daily lives of the 40m who play the lottery.”
Individual lottery awards have attracted no shortage of hostile commentary. Many of the most notorious were made by the Community Fund, since merged into the Big Lottery Fund: the £718,672 given to the Oxfordshire-based Cusichaca Trust, used in part to help the aforementioned Peruvian farmers to breed fatter guinea pigs for eating; the £491,188 handed to the National Coalition of Anti-Deportation Campaigns, vilified for helping two Palestinian bombers; the £225,903 awarded to the Scottish Prostitutes Education Project, which provides aromatherapy massages to sex workers.
This year, a rival private lottery operator took a bet that widespread disapproval of such grants would draw sales away from the Camelot games. Until recently chaired by Tim Holley, Camelot’s chief executive from 1993 to 2001, the new online lottery game, Monday, has been promoted as a more effective and less bureaucratic way to benefit good causes. It signed 70 charity partners, from Acorns Children’s Hospice to WWF, to which it pledged 30p of every pound spent on tickets – 2p per pound more than recipients see from the Camelot games. “And,” its website stressed, “0p will be given to Peruvian guinea pigs or super-sized marquees on the Thames.” Last month, however, after disappointing sales, the parent company Chariot announced that charities would have to pay a 6p-in-the-pound charge to collect donations from each draw. This means that charities will now receive 22.5p per pound from Chariot, to Camelot’s 28p.
“One of the frustrations if you run a lottery operator like Camelot is you have no say where the money goes, yet you have to deal with the criticisms,” Holley told The Sunday Times Magazine before he resigned. “When players are dissatisfied it can affect ticket sales.” So Chariot has been careful to ensure it benefits “uncontroversial” causes such as children and animals.
As for Denis Vaughan, he feels passionately that only a bold, risk-taking lottery can build a culturally enriched and physically active nation. But that, he says, demands a genuinely independent foundation to distribute lottery money beyond the politicians’ reach.
Some of the “showcase” projects have turned out to be risks in themselves. The Earth Centre leisure park in Doncaster was supposed to show people how to live in an eco-friendly, sustainable community. Instead of the predicted 500,000 visitors a year, it received 80,000, and closed in 2004 at an estimated cost of £64m.
Rather than fund projects such as the Olympics or the Millennium Dome, Vaughan says, an independent foundation would enthuse young people through grassroots local projects, thus cutting crime, alcohol abuse, obesity and school absenteeism. “Ask the culture department what it’s done for the 10m youngsters between seven and 21,” Vaughan says. “You are getting one in three coming out with a criminal record – so where are the networks of coaches and activities to inspire them?”
Sir Christopher Frayling, chairman of Arts Council England, takes a rather more upbeat view. “The lottery has completely changed the ecology of the arts in this country,” he says animatedly, reeling off a list of new and renovated galleries and performance spaces including the Baltic, Gateshead; the Lowry Centre in Salford; Sadler’s Wells and Tate Modern in London. “I can’t think of any other area of national life where private-sector buildings, such as West End theatres, look grubby and unloved, whereas public-sector theatres like the National are fantastic. Suddenly the visual arts are exciting again.”
Yet many millions of pounds of lottery money have been squandered through mismanagement and waste, according to the National Audit Office and the House of Commons public accounts committee. John Major agrees: “The system of funding and grant-giving has been abused.” In 1999 the committee scrutinised 15 projects funded by the Arts Council and found that nine had come in late and six seriously over budget, causing a total cost overrun of £94m. Since then, one showcase project – the National Centre for Popular Music in Sheffield – has collapsed and others have run into trouble.
Yet another lottery-funded arts complex, the Public in West Bromwich, went into administration this March, having already received £26.5m from the Arts Council.
In a 1999 report on the Arts Council by the Select Committee on Public Accounts, it was concluded that “The Arts Council distribute huge amounts of lottery money, often with millions of pounds going to individual projects. We consider it essential, therefore, that the Arts Council have the appropriate financial and project management expertise. There have been significant weaknesses in the work of their Business Assessment and Planning Team, and problems with some of their Building Monitors.” The music centre in Sheffield, it was found, was insufficiently regulated by the independent building monitor employed by the Arts Council during its construction.
Frayling is unrepentant. “Yes, there are overruns sometimes when you put up buildings, but it’s wrong to single out the Arts Council lottery projects as particularly culpable,” he replies. “We did a survey comparing private-sector projects on this scale with lottery-backed projects, and we came out a lot better in terms of overruns, budgets and project management. As for the pop-music centre – ask a series of top-line consultants to do a business plan, and you’re told that because hundreds of thousands of people go to rock concerts, a museum would get very good attendance figures. They were wrong – people who go to pop concerts do not go to museums. But it remains an iconic building.” The pop museum – built with £11,355,000 of lottery money – certainly makes a lavish Students’ Union bar and meeting rooms for its current occupiers, Sheffield Hallam University.
“It’s right to hold us to account,” Frayling says. “But it’s a myth that there’s profligacy and poor public management in arts organisations. Why doesn’t some of this ire go in the direction of agriculture or science? Is there no money wasted there? It was marvellous that this lottery windfall happened. We are now the envy of the world.”
It is just past noon when the Southampton Dragonfly Team begins its weekly meeting to discuss the 40 or so “life-limited” children in its care. In her office at the Ashurst NHS Family Centre, Helen Jordan, the calm, matter-of-fact team manager, talks through with nurses, care assistants, a social worker and a child psychotherapist the week’s priorities: the two “end of life” children who may suddenly require 24-hour attention; the two recently bereaved families receiving counselling; the planned zoo outings and respite sessions that will offer short windows of freedom to parents struggling to manage their children’s life-threatening illnesses.
“Many of these children need constant attention, and some of the families have no other help,” Jordan explains. “We offer respite care, letting parents catch up on sleep or spend time with their other children. Our social worker helps them get the housing or schooling they need. And through psychotherapy, we can let the children air their anger or sadness.”
Until three years ago, there was no ready source of funding for Dragonfly’s innovative multi-specialist approach to children’s palliative care. The local NHS trusts had other priorities, and grant applications went nowhere with national bodies such as the Diana, Princess of Wales Memorial Fund. Then, after an 18-month bidding process, the national lottery’s New Opportunities Fund announced in January 2003 that Dragonfly would receive £464,809 to run for three years. The lottery grant runs out in September, after which NHS funding has been found only for its work in the city of Southampton.
“Dragonfly has made the difference between surviving and actually living,” Claire Lomax explains later at Rosewood school, the special school attended by her four-year-old daughter, Tabitha, who is severely disabled with cerebral palsy. “It’s a 24-hour job caring for Tabi; to be able to take four hours off every second Friday, knowing that if she goes blue and stops breathing there’s someone to look after her is amazing. They’ve probably saved our marriage.
“My mum has a very negative view of where the lottery money is going,” Claire says, “ but for us it’s made a real difference. You think this sort of thing should be funded by the state, yet projects like this get left behind by the NHS, as they know we’ll look after our children come what may. But why shouldn’t lottery money go where it’s desperately needed? Aren’t people more important than art?”
A bigger question concerns whether lottery money should be used to fund health programmes at all – or, indeed, be spent on educational and environmental initiatives, traditionally paid for out of tax receipts. When John Major launched the original national lottery legislation in 1993, he sought to enhance national life and nurture new British icons, which he felt could be achieved only if money went to activities considered “additional” to normal taxpayer spending. Politicians must have no direct say on how grants were distributed: nor would lottery funding be allowed to displace conventional departmental spending.
The 1998 Lottery Act introduced further areas in which lottery funds might be invested: “innovative projects in health, education and the environment”. This “good cause” was allocated 13.3% of spending, and prompted allegations of “government raiding” of lottery funds to meet projects that should have been paid for by the exchequer. “The lottery was a unique opportunity for the expansion of sports, arts and culture,” says John Major. “It has been thrown away by the Labour party in government doing precisely what the Labour party in opposition claimed it would not do. The Labour government has siphoned off huge sums to supplement government expenditure. It is not what the lottery was established for and the Treasury’s greed is undermining the whole concept.”
This principle of “additionality”, Major now believes, has been brutally dishonoured by his Labour successors, whom he blames for “plundering” lottery funds in shameful acts of “larceny”. “The Labour government’s deliberate muddying of the waters between exchequer and lottery revenues dismays me greatly,” he complained in January, in the preface to a highly critical report from the Centre for Policy Studies. “If the Lottery Fund continues to be raided in order to boost the Exchequer, there will be far less remaining funds for all the good causes I had hoped would benefit most.”
Ruth Lea, director of the Centre for Policy Studies and the paper’s main author, cites the funding bodies’ changing priorities as clear evidence that political expediency led Labour to sacrifice the “additionality” rule. At first, she points out, each of five good causes was allocated 20% of lottery income: sport, the arts, heritage, charities and projects to mark the year 2000. Then, through a 1998 National Lottery Act, Labour introduced a sixth good cause, defined as “innovative projects in health, education and the environment”.
This, Lea argues, has proved “little more than a funding arm of government,” in blatant breach of the “additionality” principle. She also claims that a stream of politically correct and highly prescriptive instructions from central government has forced all the funding bodies to channel grants to fit in with official policies. “The money’s been siphoned off,” Lea says bluntly in her Westminster office. “It’s no good [the government] being defensive, it’s a fact that the Treasury has been dipping its little fingers in lottery funds.
“It may well be that a lot of people who play the lottery would prefer their money to be spent on MRI scanners than on some of the schemes funded by the Community Fund. But let’s at least be open about how things have changed.”
The position will be entrenched by a new National Lottery Act, which became law last month and seeks to ensure that half of all spending goes towards health, education, charities and the environment, while the rest is split between heritage, the arts, film and sport. The bill gives Tessa Jowell, as culture secretary, unprecedented powers to move funds between the various lottery distributors.
Charities have voiced serious concerns that this will lead to yet more lottery money going to government pet projects. An early worrying sign, they say, was the decision by the Big Lottery Fund in spring 2005 to hand £45m to the School Food Trust, launched by Ruth Kelly, the education secretary, as part of her department’s strategy to improve child nutrition.
“It’s simply not right that lottery money should be spent on a scheme to provide fruit in schools,” says Stephen Bubb, head of the Association of Chief Executives of Voluntary Organisations, which represents around 2,000 charity bosses. “Likewise using it to buy hospital MRI scanners. The voluntary sector is very worried about how robust the Big Lottery Fund can be under the new Lottery Act – when civil servants tell the fund’s officers that the minister really wants the money going in this or that area, guess what will happen.”
There have, clearly, been winners and losers in terms of where lottery money has been directed. People living in the home counties have generally fared worse in terms of money spent per person over the past decade: the country’s lowest relative expenditure, at just £28.94 per person, has gone to Hart in Hampshire, followed by Crawley, West Sussex (£35.73 each) and Rochford in Essex (£40.88 each). London, by contrast, has had phenomenal returns: £1,616.37 per person in Camden, £2,968.30 in Westminster, and £4,279.97 in the City of London.
A Sunday Times analysis of the national league tables of lottery grants (conducted before this May’s local elections) revealed a curious split apparently along party-political lines. Of the 10 local authorities where spending from the lottery had been lowest, seven were Conservative-run, and only one was led by Labour, with the other two under no party’s overall control. Yet where the money had flowed most freely, Labour authorities came out best: three of the country’s 10 best-funded authorities were Labour-controlled, compared with two each for the Conservatives and Liberal Democrats (others came under no single party’s leadership).
Does this mean funds are being deliberately targeted to Labour-controlled areas? The funding bodies strenuously deny this. Still, our findings are considered “intriguing” by Jonathan Watson, editor of the newsletter Lottery Monitor, whose data formed the basis of the Sunday Times survey. “I’m not a conspiracy theorist, but it’s certainly worth a closer look,” Watson says. “Maybe it’s simply that Labour councils are better connected.”
Among those rejected for apparently meritorious lottery applications, there are other concerns about the funding process. Three years ago, the Caister Volunteer Rescue Service in Norfolk applied to the Community Fund for £200,000 towards its £800,000 appeal to buy and house a new lifeboat. The Caister lifeboat station, independent of the RNLI, claims to have saved 2,000 lives since 1845 when its first boat was launched. So they had no reason to doubt that their application would be considered a worthy “good cause”. Yet after 10 months, their application was rejected for, they were informed, serving private rather than community interests.
John Cannell, a 60-year-old volunteer who reckons that the crew has saved 150 lives since he joined 25 years ago, can barely hide his contempt. “They’re happy to fund the more bizarre causes, but not something as traditional as us,” he says. “Are we meant to ask a kiddie sailing off to sea on a rubber dingy, ‘Can you afford us to rescue you?’ Or a swimmer about to drown? The lottery bloody didn’t try to understand.
“They asked if we had ethnic minorities. We have an Icelander, but you won’t find many people of ethnic minority in Caister with lifeboat experience. They’ve got their own agenda.”
Media coverage of the rejection led to a surge in private donations, and the new boat arrived on August 29, 2004. “We can proudly say we’ve done it without them,” says Cannell. “I used to play the lottery myself. I don’t any more.”
Over at the Big Lottery Fund’s London headquarters, Stephen Dunmore, the chief executive, would rather talk about the “good news” stories – the 529 pieces of cancer-fighting equipment bought, the 555,340 out-of-hours childcare places provided, the 4,000 libraries brought into the internet age. “To look at individual projects that didn’t get funding is a pretty useless exercise, when a whole variety got funded across the board,” he says. “Most people will pass a lottery-funded project within 10 minutes’ walk of their front door, whether it’s a refurbished park, a multi-sports hall in a school, a village hall or a healthy living centre.” As for those notorious Peruvian guinea pigs, that was simply “erroneous reporting”: just £2,000 of the Cusichaca Trust’s award went on guinea pigs, and besides, they are a traditional part of the South American diet.
“I’d reject any accusations of political correctness,” Dunmore says firmly. Nor has he seen any evidence of political interference in his fund’s distribution. “My board feels confident that we do have an arm’s-length relationship with the government, and that it’s not coming after our money,” he says.
The culture secretary, meanwhile, has been doing all she can to show that she is giving the lottery “back to the people” – asking television viewers to vote on where “the People’s Millions” should be spent, and conducting a series of public consultations. And this month the “Your Pound, Your Choice” initiative will be trialled. It enables lottery players to tick boxes on their tickets, indicating their favoured good cause.
As accusations grow about political interference, as rival lotteries threaten to squeeze Camelot’s revenues, and as uncertainties over Olympics funding risk raids on the other good-cause funds, Jowell’s message could be lost. Still, as every player knows, it’s that lack of certainty that makes the lottery so much fun.
Additional research by Amy Turner
