A quango distributing lottery money has been accused by the Conservatives of wasting millions of pounds on salaries and administration while cutting donations.

Costs at the Big Lottery Fund, which is responsible for handing out half the money for good causes raised by the Lotto, have risen from £73 million in 2006 to £77 million last year. The amount distributed has dropped from £696 million to £469 million because the Government has diverted funds to the 2012 Olympics.

The fund’s administration costs amounted to 12.8 per cent of its income.

In comparison the charities Scope and Children in Need spent 2 per cent and 4.4 per cent respectively.

The research showed that the fund, where five of the twelve board members are Labour members, has 1,103 employees compared with 1,170 at the Treasury, but while the fund distributes £630 million annually, the Treasury distributes 500 times that amount.

Jeremy Hunt, the Tory culture spokesman, said: “If charities such as Children in Need and Scope can control their overheads, why can’t the Big Lottery Fund? The national lottery was set up to help the good causes, not pay for an army of well-paid administrators that behave increasingly like an arm of the Labour Government.

“It is particularly shocking to see this waste when lottery good causes have seen their income fall by about half under this Government.”

Sir Clive Booth, the fund’s chairman and Labour Party member, earned £37,557 last year for his “two-day-a-week part-time post”. Sanjay Dighe, the former deputy leader of Harrow council in northwest London, received £24,000 a year for his part-time job as the fund’s chairman for England. Roland Doven, a surgery clerk for a Labour MP, is paid £208 for each day he works, as is John Gartside, a former Labour leader of Warrington council, and the Labour activist Albert Tucker.

The Big Lottery Fund was formed in 2006 after claims that its predecessor was wasting public funds. It was claimed that a grant of £420,000 had been given to a project to breed fatter edible guinea-pigs.

But the new administration also became embroiled in controversy when it refused to support a memorial for members of the British Armed Forces who had died in combat until Gordon Brown intervened.

Some commentators have also claimed that the fund has given too much money to obscure pressure groups campaigning for asylum-seekers and foreign prostitutes. The organisation is based in London but also has offices in Nottingham, Belfast, Glasgow, Wales, Birmingham, Cambridge, Newcastle, Manchester, Guildford, Exeter and Leeds.

This week Parliament will debate plans to divert a further £675 million from good causes into the 2012 Olympics. The Government sanctioned the cash raid last March after finally admitting how spectacularly the Olympic bill had rocketed from its original estimate of £2.37 billion.

Last month the fund held a competition called the “People’s £50 million” in which a public vote was held to select one of four projects to receive a £50 million grant, the largest sum to be awarded by vote through television.

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