One-sixth of all the national lottery money earmarked for good causes is being spent on bureaucracy, including one quango that has more staff than the Treasury.

New figures reveal that more than £200m a year is being swallowed up in administration and staffing costs at lottery distributors – up to six times the proportion spent on overheads by some leading charities.

It means that instead of the stipulated 28p of each £1 lottery ticket going to good causes, the true figure is closer to 23p.

The worst offending quango, the Big Lottery Fund (BLF), employs about 25 staff more than the Treasury to administer a budget about one-thousandth the size.

The report, produced by the Conservative party and based on official accounts and parliamentary answers, shows that lottery agencies spent more than £470,000 on consultancy fees last year and almost £50,000 on internal surveys to find out if their staff were happy.

Details of the inefficiencies follow the government’s decision last year to divert an additional £675m from the lottery to the 2012 London Olympics.

“At a time when lottery good causes have suffered badly because of miscalculations in the Olympic budget, it is totally inappropriate that so much is being frittered away in bureaucracy,” said Jeremy Hunt, the shadow culture secretary.

The BLF, which distributes half of lottery cash, spent £77m of its budget, equivalent to more than 12%, on administration in 2006-7. It has an income of about £600m a year and employs 1,103 staff across the UK. The Treasury, which controls £552 billion, has a smaller core staff. The BLF is chaired by Sir Clive Booth, who was paid £37,557 by the fund in 2007 for a two-day week. Stephen Dunmore, its former chief executive, was paid up to £145,000 last year.

Two other lottery distributors, Arts Council England and Sport England, also spend 12-13% of their income on administration. This compares with 2% and 4% respectively for the charities Scope and Children in Need, which have to raise their own funds. Hunt wants all distributors to reduce their operating costs to at least 9%.

The BLF claimed that it was working on a scale “not comparable” with any charity and had made “significant savings”.

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