Committee of Public Accounts: Press Notice


Publication of 54th Report of Session 2006-07

Edward Leigh MP, Chairman of the Committee of Public Accounts, today said:

“The money available to support heritage projects will be sharply cut between 2009 and 2012, as a direct result of the Government diverting more than £160 million from the Heritage Lottery Fund to help pay for the Olympic Games. The Fund will have to work hard to make ends meet.

“With less money to go round, the Fund should look harder at whether applicants have exhausted other sources of funding.  And it must have a sharper sense of what its funding is achieving. The Fund must also ensure that it distributes money as fairly as possible. It needs to stimulate good quality applications from hitherto under-represented groups so that they gain access to lottery funding; and it must work to remove bureaucratic hurdles faced by applicants.”

Mr Leigh was speaking as the Committee published its 54th Report of this Session which, on the basis of evidence from the Heritage Lottery Fund, examined the equitable distribution of funding, what is being achieved and how it can make its money go further.

The Heritage Lottery Fund has awarded £3.8 billion in grants to some 24,000 projects since it was established in 1994. The Fund operates within a framework of policy directions issued by the Secretary of State for Culture, Media and Sport and currently distributes 16.67% of the money raised by the National Lottery for good causes.

The Fund has provided funding to all parts of the United Kingdom although the amounts regions have received vary significantly, depending mainly on the number of large grants awarded in each. The Fund has also identified a small number of priority areas in each region for particular attention and appointed development officers to help local and community groups make successful applications. It also seeks to encourage applications from under-represented social and ethnic groups more generally but has found it difficult to target these effectively. To encourage applications, particularly from voluntary and community groups, the Fund plans to introduce a simpler application process to meet applicants’ concerns about the burden involved. 

Projects supported by the Fund cover all types of heritage and have achieved a wide range of benefits. The Fund, however, is not able to demonstrate effectively its impact in opening up the heritage to people from deprived or minority backgrounds. Although projects are largely delivered to time and cost, the Fund has done little to tackle the poor project management skills of some grant recipients. It intends now to invest more effort in helping less experienced applicants develop and deliver their projects.

From 1 April 2009 the Government intends to divert more than £160 million from the Fund to help pay for the 2012 Olympics and the Fund’s income may be further reduced by as much as £95 million if ring-fenced income from Olympic lottery games diverts sales from other lottery games. In the past the Fund has awarded more money in grants each year than it has received from the Lottery, so that by March 2007 its outstanding grant commitments were 64% more than its National Lottery Distribution Fund balance. The Fund is confident that it can honour these existing commitments, but in future will only make grant awards each year roughly in line with its annual income. The Fund anticipates that from April 2009 it will award approximately £180 million a year in grants, compared to average annual awards of £325 million to date.

The Fund will therefore remain a significant funder of the nation’s heritage, but it needs to find ways to make its money go further. To date the Fund has not generally tested whether applicants could raise more money from other sources to help pay for their projects, but will now put greater emphasis on ensuring that applicants have done as much as they can to maximise partnership funding. The Fund is also looking to keep its own running costs to a minimum.