New Labour and National Heritage

Reforming The National Lottery

In opposition, Labour's Advisory Group report, "The National Lottery, Initiatives and Recommendations", released on December 2 1996, announced the party's proposals for the National Lottery. The report looked into proposals to:

• review scratchcards and the effects of gambling;
• establish co-ordination strategies between OFLOT (the lottery regulator) and the operator, so that there are no conflicts of interest between choosing a lottery operator and overseeing the subsequent running of the lottery;
• maintain winnings as they stand, so no ceilings are imposed on the prizes;
• ensure interest on unclaimed prizes goes to good causes, not towards operator profits;
• establish a charter to guide distribution of funds to the arts, heritage, charities, sports and Millennium boards; and clarify the partnership funding requirements to improve access to lottery resources;
• cap Camelot's profits, or perhaps seek another non-profit operator, once the present contract expires;
• broaden the scope for funding, perhaps to use lottery funds for training teachers in new technologies, helping the elderly insulate their homes, funding music tuition in schools.

Campaign pledge for Lottery-funded health and education schemes

In the final week of the General Election campaign, Labour announced that it would re-direct £1bn of the Lottery's 'good causes' resources into health and education projects over 5 years including:

• IT training for 500,000 mid-career teachers;
• homework clubs for 50% of secondary schools and 25% of primary schools, concentrating on establishing inner city 'action zones';
• some free and some chargeable health and fitness centres on the high street, to encourage healthy lifestyles;
• National Endowment for Science, Technology and the Arts (NESTA): a fund to promote artists and develop new inventions.

Criticisms

The Government's proposals have already met some familiar objections:

Firstly, that the lottery is a tax on the poor, since the poorest 10% of households spend around 3 times more of their weekly income on lottery tickets than the top 10% of households;

Secondly, some unions are concerned that lottery-funded health and education schemes will become a substitute for government spending, rather than a welcome addition to core public service spending commitments;

Thirdly, the Conservatives have suggested that plundering the lottery funds for health and education is a way to fill the black hole in Labour's spending plans.

Labour's Lottery Bill

This autumn, a Lottery Bill will include the following proposals:

• The next company to win the contract to run the lottery will not be allowed to make a profit. When the new contract starts in November 2001, the company will receive running costs alone.

• Redefine the role of the lottery regulator, OFLOT: increase its power and authorise it to fine Camelot for poor performance.

Alongside the Arts Council's post-election announcement that it would pour £8m into amateur and local arts projects, Labour's proposals to reform the lottery represent a positive mood of change.

The Treasury has suggested that Camelot would not be considered as one of the private monopoly companies to be hit by the windfall tax, but it is thought that the Chancellor will try to get Camelot to divert a greater proportion of its profits to good causes.

Lottery factfile

Camelot's statistics

Since the Lottery's launch:

• £6.95bn has been generated from ticket sales;
• 90% of adults have played the game;
• 65% players were playing the on-line game regularly;
• total weekly sales (including scratchcards) averaged £69m;
• £1bn has gone to the Government from lottery revenue (in tax/VAT) over the two years.
• by the end of October 1996, there were over 530 jackpot winners, who are advised by Camelot counsellors on what to do with their winnings.

Of the weekly sales:

• 28% goes to 'good causes';
• 50% of takings go to winners;
• 13% goes to the Government in tax and VAT;
• 5% commission to retailers;
• 3% running costs;
• <1% taxable profit retained by the operators;

The Lottery's Impact

'Good causes'
Camelot aims to raise £9bn total for good causes by the end of its seven-year contract. £2.4bn has been raised for the good causes in the last two years. The funds raised by ticket sales represent the most significant cash injection for the arts in fifty years. Money raised is divided evenly between arts, heritage, sports, charities and the Millennium boards.

A blessing or a curse for business?
Henley Centre findings (published by Mike Needham and Ray Stone in September 1996) suggested that by then, the Lottery had created 27,990 jobs across a range of sectors, either directly or through 'knock-on' effects. However, by August 1996, pools company Littlewoods had shed half its workforce in the 18 months since the Lottery had started.

Other Controversies for the new government to consider

• Since the lottery began, the Henderson Top 2000 Charities Report has recorded a drop in contributions to established charities.
• Regional disparity in distribution of funds, leading Labour MP Hugh Bayley to call for regional committees to be set up to distribute funds more evenly.
• Lottery fund applicants still have to provide a substantial proportion of the funding through private sector finance. Meanwhile, larger, higher profile enterprises are more assured of backing than other applicants, who may not be able to make up the shortfall.
• Funding decisions touch the core of the debate over 'mass versus high culture': some decisions such as financing opera have been seen as misguided or unfair.
• While lottery resources facilitate building and renovation projects,they are not set aside to help arts organisations to meet their running costs.
• Church leaders have questioned the ethics of the Government's encouragement of a gambling culture and have expressed concern over the lottery's "excessive" jackpots.
• Scratchcards are thought to encourage under-age gambling.
• Winners' anonymity has needed protection following tabloid scandals.