Select Committee on Culture, Media and Sport Written Evidence


1.  Memorandum submitted by the Council for Advancement of Arts, Recreation and Education (CAARE)

SUMMARY

A.  OVERALL

1.  Who is responsible for the Lottery?

  Politicians, civil servants, heads of quangos, Treasury personalities, the operator.

2.  Structural Mission of the Lottery

  This should be "non-profit making"; a State Lottery, as is usual in Europe and the USA.

3.  Changing the image and improving the profile

  The Lottery should be linked to a programme that will reach the entire populace, concentrating on the 10 million young between seven and 21. Role models, and the careful structuring of a series of inspirational images in the arts and sports are all-important.

3.  Grass roots universality

  A universal Lottery system is required to prevent the bulk of the populace feeling separated from the whole process.

B.  LICENSING AND REGULATION

1.  How the Lottery has been used to justify a growth of the world of gambling and advertising

  Distinction of the Lottery from heavy gambling; Labour support for profit making; Lottery improvements omitted from the Budd Report; Lottery's special position in the gambling market—all gambling should contribute to the NLDF.

2.  Minimum personnel needed to license and regulate the National Lottery

  All aspects of the Lottery require regulation by a body which understands the importance of selling a wholly credible product. CAARE proposes that Ray Bates should be appointed as an Advising Consultant to provide appropriate answers to these questions. The Regulating Committee should also oversee the distribution of the NLDF.

C.  DISTRIBUTION AND FUNDING

1.  Treasury's structure, priorities and thought processes

  This must be reformed so that it reflects the daily needs of all people, and not just in a "token" fashion. The responsibility of the DCMS should match that of the DfES.

2.  OLYMPIC BID

  This should be proudly paid for by the State, and not by the Lottery which should invest only in the universal plan.

3.  "Does the National Lottery have the right focus?"

  No.

A.  OVERALL

  The response to the overall question "Will the proposed changes ultimately lead to more resources for good causes?" depends on a careful analysis of the reasons for various failures in the past, and the importance of change to foster improvement. The issues divide into the following areas:

1.  Who is responsible for the Lottery?

  The lack of clarity on this point is best summed up under five headings:

    (a)  Politicians. The inevitable changes in this area, joined with the relatively short duration of their position, means that the focus is shifting constantly. Whoever comes next into the respective chairs is not likely to remain for the minimum of five years necessary to achieve a fundamental change in the public psyche.

    (b)  Civil Servants. No highly specialised schooling is required for those shaping the lottery, arts, sports programmes, and change is sometimes very frequent (one sport leader position in the Department of Culture Media and Sport (DCMS) changed once every month for three months towards the end of 2003) so that a long, experienced dialogue with all aspects of public thought is difficult to maintain.

    (c)  Heads of Quangos. In our experience most of these, although nominally responsible people, are in fact required to follow the dictates from the DCMS, which in their turn follow guidelines which tend to change frequently.

    (d)  Treasury personalities. In a conversation with Sir Alan Budd concerning whether economists should make decisions on cultural, emotional training, physical education or sporting matters on which they may not have received specialised training, he revealed that he thought "not". Many final decisions are made by unnamed people, sometimes not even the heads of the Public Service department in the Treasury.[1]

    Similarly, proposals made by the CMS Committee, including specialist advice, are sometimes rejected out of hand. This must often be on a purely financial basis, instead of the balanced evaluation of the cultural void in which the UK has been plunged for some decades.

    (e)  The Operator. When the DCMS has omitted to supply a clear image for the Lottery it is left to the operator to provide a new selling point—such as the "Billy Connolly Lotto" campaign—which might attract only one part of the potential public, yet always taking greed as the chief, isolated selling point. With the growing competition from other forms of gambling, Camelot are obliged to focus their publicity on their own name, although it has been tarnished for some years with an image of profiteering. How can Lottery sales improve on this complex basis?

2.  Structural Mission of the Lottery

  Ideally this should be "non-profit-making", as most other lotteries in the world, which are monopolies and consequently not for profit. During the damaging conflict between Camelot and Sir Richard Branson, we formed and registered the UK Lottery Company, to be able to run a "not-for-profit" lottery, as this would enhance the image of the lottery. Sir Richard Branson's many other business interests make it difficult for him to take on the lottery, without reimbursing to it the full value to his other businesses of the regular promotion of his name at peak time TV and radio twice a week at least. In trade magazines this was estimated as amounting close to £2 billion a year.

  Considering the large amounts the Treasury has made from the lottery to date, and the possibility of increasing its sales, the case for the Lottery to become a State lottery, in which the Treasury guarantees the sums which are currently required of the operator is strong. If the Lottery achieves the image which we propose below, of becoming the strongest and most positive crime and obesity prevention programme in the country, the savings to Treasury would be many times greater, underlining the value of it handling the financing of the operator.

3.  Changing the image and improving the profile

  This can only come about quickly, if the Lottery is linked fundamentally to a programme to reach the entire populace, concentrating on the young between seven and 21. The huge enthusiasm for the competition engendered by "Pop Idol" is the type of rivalry which the Lottery could and should create, by linking its product—ie where the money for good causes is invested—with the daily activities of all. This requires the distributor and operator to be of one mind, with highly experienced direction.

  If every sport has a role model—not seen as a talking head, (which is sometimes disappointing) but shown only doing what she or he excels in, then every image connected to the lottery is exhilarating. If every part of the country can offer some growth of access, such as with sporting and gym facilities, in and out of schools, there will be visible competition between a huge range of centres and the desire to shine will be stimulated; a sense of virile growth is engendered.

  If the lottery sales are then connected to this life-giving activity, all feel that it affects them personally. As long ago as 1993 we referred to the "Pavarotti principle"[2]. The association of his voice with the World Cup (singing "vincero"—I will win) has become ingrained, so that his voice is beloved of all, without protest.

  The careful structuring of a series of inspiring images, linked to competition—selected by age groups, first one year, then older, then younger, and other systems to stimulate a reason for repetition without fear of stagnation—then within three or four years the activities the lottery is seen as promoting can become second nature to all.

  Admonition about obesity, and frightening predictions, risk setting up a self-protective reaction, just as forbidding smoking seems in many cases to stimulate it, whereas the attraction to a shining, positive set of activities reaches the same goal by exciting, even joyful means.

3.1  Aspects of imaging

  Achieving a "high" through sports and arts.

    (a)  Sports. The higher points of this process should be mentioned now, because of their relevance to reducing the need for drugs and alcohol misuses. Regular participants in a sport or in strong physical exercise can experience a "high" without the need for chemical help such as drugs or alcohol. Steve Redgrave or Jonathan Edwards will vouch for this[3]. Making the achievement of these physical "highs" a regular, healthy experience which is damaged if the training is only partial, or is countered by undue use of alcohol, provides an invaluable aim for the Lottery to achieve.

    (b)  Arts. The Times (29 December.2003) quoted CAARE's letter to Tessa Jowell,[4] in which we mentioned developing the "subtle aspects of human emotion, and the regular achievement of bliss, inner joy and spiritual uplift" through the arts. All are, or should be a responsibility of the DCMS.

  There are many routes available to these states, whether visual, aural or tactile. The power of live theatre is greater than that of the cinema or TV, because it requires the active participation of the audience members to be complete. A TV or cinema screen is quite indifferent to any emotional feedback from the members of the observing audience. The performances of live, unamplified music are affected by the emotional and even spiritual contribution of the audience, making the participation integral to the whole. That applies to a solo guitar, a group or even a symphony orchestra. The performer feels it and thus changes his/her performance.

  Spiritual awareness can be learned even from an early age, and is best when quite separate from any religious teachings or faiths, which risk being mainly mental, and linked to material matters. These harmless techniques are all teachable, as several publications describe.[5]

  First steps in "putting youngsters in touch with their emotions" have already been taken by the Government, based on Daniel Goleman's excellent "emotional intelligence" principles.[6] His approach links mental and emotional aspects together. Fuller emotional maturity develops sometimes without such verbal analysis, but through a wide range of emotional participation.[7]

  The slow integration of these fulfilling activities with the help of NESA's guidance indicate why boredom should never be associated with the Lottery and its product or, once it starts to lead the country in these areas, the DCMS for at least the next 10 years. These huge windows on a rich, fulfilled life should be seen as the peaks of the "quality of life" aim of the Lottery.

  Our list of statements from other lottery operators which have successfully changed their images[8] has already influenced the DCMS and Camelot. In nearly all successful cases there has been a single organisation linking collection and distribution of the funds, enabling a clear, effective image to be decisive. This has obviated meaningless rivalry.

4.  Grass roots universality

  The payments from the lottery have been reactive, relying on acceptable applications from valid projects. The expenses associated with the applications, and the lack of universality of any project, have meant that the bulk of the populace feels itself separated from the whole process. It takes little or no pride in the way projects develop.

  The uniting idea, first proposed by the Rothschild Royal Commission on Gambling in 1978, and reiterated by Sir Robin Day[9], of the funds being distributed by an independent charity, allows this principle of universality to be set up and remain as a virile force. We have proposed the title "National Endowment for Sport and Arts"[10], because that allows the permanent growth of the central funding to bring about these participation activities in every corner of the country. The way in which the National Lottery Distribution Fund (NLDF) reserve has been invested, shows one way of setting up an endowment, but the key part of the process is that no constantly changing set of criteria should be set up, which prevent a regular growth plan from developing.

  The Prime Minister has expressed a desire, shared by many, that fitness in the country should increase. The DCMS Sports paper, Game Plan, envisages a 70% increase in fitness by 2020! But a long-term plan, which does not have the fundamental structure we propose, risks being changed and remodelled almost every year, at budget time. The vital infrastructure organisations, and the vast number of linked voluntary organisations, would be built upon sand. That is why we believe that this central endowment fund, for participation in sport and arts, should be enriched with funds not only from the lottery, but also all the harder forms of gambling and from the State.

  We propose a system of televised competition from every corner of the country to excel in participation. This would allow an open rivalry between sectors of gambling, bingo, casinos, and racing, to vaunt the size of their contribution to the fund which is greater than the others, and this would compensate for the damaging rivalries that the Lottery and its good causes are currently at risk of suffering.

  From the outset we have shown how charities and voluntary organisations pour more money into, say, animals, than into youth, sport, arts and education together. Were the whole lottery structure to be seen as the compensation for this decades-long oversight, public sympathies and energies would coalesce in one direction. Already, as Margaret Talbot points out,[11] "sport and recreation accounts for 26% of all actual volunteering, more than the Church, health, education, youth and social services." But that is not mirrored in the funding. So the funds which match this energy must be linked to it through the Lottery and the awareness it alone can promote regularly.

B.  LICENSING AND REGULATION

  A constructive survey of the best ways to create more resources for good causes requires an analysis of:

    (i)  How the Lottery has been used to justify a growth of the world of gambling;

    (ii)  The number of people and organisations involved in licensing and regulation; and

    (iii)  The parasitic nature of many of these organisations, all of which are funded in the end from the takings of the Lottery.

The perspective of the common man versus big business

  The only hope which David ever had against Goliath was accuracy of aim.

(i)  How the Lottery has been used to justify a growth of the world of gambling.

    (a)  Distinction of the Lottery from heavy gambling

  Denis Vaughan's initial plea (18 December, 1991), in the EEC hearings on gambling in the single market,[12] for a National Lottery in the UK stressed that in a Lottery "with a chance of only one in a million of gaining a large prize. . .there can be no gambling skill involved in such a slight chance. . .A lottery is more accurately seen as an entertainment available to the whole populace, clearly without harmful effects in the rest of Europe."

  Very few States in the USA allow gambling of the Las Vegas style or extent, although they all have lotteries:

  "In January 1991 the current annual turnover of gambling in the UK was published as £13.4 billion (£4.5 billion more than the £9 billion cited in the Coopers and Lybrand report). . .Is gambling in the UK the largest in Europe because it is stimulated by the State, given this virtual absence of taxes in some cases?. . . they range from none on horse racing, through 2.8% on £5.3 billion, shared between gaming machines and casinos, to 8% on the £6.5 billion of off course betting and bingo . . .A major risk of damage to individual' lives is exemplified in the figure of 8% of British children between the ages of 11 and 15 spending up to £60 a week on gaming machines. A national lottery should in no way be confused with this or the heavier gambling of casinos or betting."

    (b)  Labour support for profit-making

  In December 1993, at a seminar[13] which the Lottery Promotion Company gave at the Institute of Directors for all prospective bidders to operate the lottery, Lord Donoughue, who was the Labour spokesman who handled the Lottery Bill as it went through the Lords, but "expected almost from the start that it would have billions of turnover and relatively large profits". Lord Donoughue insisted: "I think that the advertising should, in some way, advocate the pure, social good of the Arts and the Sports. . .It should explicitly pronounce the commitment to improve to quote `the quality of life in our society."

  His acceptance of profit-making surprised our Company greatly, as the international lottery experts we had brought to the UK[14] could see no need for profit-making in a monopoly, where there is no competition. Surely the only incentive needed is a performance-related bonus to one person, the director, as is the case in most lotteries in the world. Shareholders are not necessary. Set-up loans from banks or the State, usually repaid within 12 months from the start of the Lottery, are more appropriate.

  In hindsight this Labour support of profit-making could be seen as the thin end of a very large wedge in favour of gambling, which the remit for Sir Alan Budd has developed.

    (c)  Lottery improvements omitted from the Budd Report

  Page 4 of the 2003 National Lottery Licensing and Regulation Decision Document mentions that "The Gambling Review Body were not asked to consider changes to the National Lottery, but to consider the impact of their recommendations on it."

  In our comments on the Budd report to the DCMS (5 Nov 2001) submitted at the request of Treasury, we commented:

  "The Budd Review Report . . . omits to study why the National Lottery was introduced, and why it has not achieved a major improvement in daily living standards for the whole populace. (The Report) tends to favour profit-making organisations. . .and introduces some important overall information about gambling. Figure 5, viii (P 21) shows the vast growth in gambling to an annual turnover of £42 billion. . .given by the Home Office as £10 billion in August 1990 and suddenly rose to £13.4 billion in January 1991."[15]

  The Report[16] comments that most gambling has remained stable in the United Kingdom for many years—only the calculation and measurement of its extent has changed. In fact, due to the terms of reference given by the DCMS, the Budd report achieves a huge sleight of hand without blinking. Joining the Lottery with heavy gambling to justify its expansion, and then separating it for the purposes of regulation is illogical, if not dishonest.

  It calculates the number of people who play the Lottery as gamblers, and proceeds to affirm that the world of gambling has increased vastly by this amount. It then takes the profit-making aspect of the Lottery to justify advertising[17] for all other sorts of gambling to the same extent.

  This is the place to suggest the reverse—that all growth facilitations for gambling of any sort should be considered only in respect to the extent to which they contribute to the same focussed NLDF good causes. The corollary is that the organisation responsible for controlling the funds which go to these universal good causes should be placed over the new Gambling Board, as any facilitations to other forms of gambling should be dependent on their contribution to this sorely needed social improvement.

    (d)  Lottery's special position in the gambling market

  This phrase in Tessa Jowell's Foreword is misleading and should be challenged by careful analysis. It invites this new look at the priorities. If the Lottery, as we asserted in Brussels in 1991, is an entertainment for good causes, like a large-scale raffle, then it is not in the market place on the same plane as racing, gaming machines, casinos or even bingo.

  Gambling has been given to the DCMS, which we take to be a Treasury decision. The key to the failure of the Lottery so far to have any wide-reaching effect on the grass roots quality of life in the UK may well be due to Treasury attitudes, in disconnecting what it takes from sport and culture with what it invests in them. It could be looking on quality of life purely in market terms.

  Central Government's annual income from sport is £5 billion,[18] but the same source lists its expenditure on sport as £1 billion. The DCMS Game Plan (Summary, Page 2) asserts that the total State funding to sport is £2 billion per annum, but we can find little justification above approximately £1.4 billion when all complicated promises of Lottery and DfES funding are reduced to actual funds paid within one year.

  The government funding to sport in England from 1972 to 2003 fluctuates from £3.6 million in the first year, to £35 million in the last year.[19]

  The amount to sport paid directly through the DCMS was only £67 million. in 2001-02, £115 million in 2002-03 and £111 million planned for 2003-04. This amount ought to include all matters such as the London Olympic bid.

  The stark contrast between the £58 billion paid to the DfES annually compared to the total of £1.4 billion to the DCMS shows that there is no expectation that the latter will provide arts and sports participation at the grass roots level. And yet physical and emotional education are just as important to a fulfilled young person as their mental and skills education supplied by the DfES. No-one seems to see that the earning capacity of a vigorous, happy and energetic person is greater.

  The vast sport/arts participation programmes needed to provide effective reduction of obesity, crime, drugs, alcohol misuse, absenteeism and emotional immaturity must touch every young person in the country, not token examples in particular trouble spots.

  If the Lottery's image is simplified and focussed to lead and shape this huge regeneration of the country's energies, incidentally improving health and reducing the risks of violence and aggression for all, then the urgent need for the entire world of gambling, now set within the DCMS, to contribute on a large-scale programme becomes clear.

  All talk of profit-making or an increased gambling market should be subservient to the common good. The "common man" does not know how to lobby for this, nor has he the funds to achieve it. Although the Prime Minister wants fitness to become a national trait, this will never happen unless Treasury priorities are finally redesigned, and effective legislation set up to enable the overall programme we outline to start and grow undisturbed.


(ii)  Minimum personnel needed to license and regulate the National Lottery

  "Is the Lottery Commission the right body to regulate the National Lottery?"

  All aspects of the Lottery require regulation by a body which understands the importance of selling a wholly credible product. The mooted growth of all avenues of gambling confuses the public with a multiplicity of well-advertised offers. Typifying the Lottery as gambling instead of a harmless form of entertainment helps dissuade others from seeing the Lottery as different, because of the way its good causes affect the life of the player.

  In the Decision Document, the cry for all manner of competition within the operator's field is totally unnecessary to achieve the "exciting new ideas" for which Tessa Jowell calls. On page 10 (para 4.2) the Document calls for "more flexibility to bring different companies into the Lottery to maintain its freshness and the breadth of its appeal."

  In practical terms this is quite unnecessary and in fact counter-productive. If an integrated business (as approved on page 8) is run by a first-rate director, as are most lotteries in the world, the freshness in the games can all be organised by the one director. Dazzling the public with a variety of new games should not need a variety of new licences, when one experienced director can ring the changes with the necessary frequency to stimulate interest. There is a wealth of information about new games, techniques, internet, etc. and on how successful they are. For the public the freshness comes in particular with a clever promotion of a co-ordinated variety of sports and arts activities which are being funded, stimulated and fostered.

  There has been little or no overall financial regulation of the distribution of the NLDF beyond that which our Charity's sister company has provided cost-free for years. Often our reports have been denied, although they are always based on material supplied by the DCMS.

  Since March 1997 the reserve in the NLDF remained at £3.6 billion for almost six years.[20] No regulator, nor even the National Audit Office (NAO) or Public Accounts Committee (PAC) thought fit to change that, and apply the general rule that funds not used within a year should be applied to other areas. Only recently has the DCMS managed to gain more efficient handling of the reserve.

  The Lottery Commission should cover this area. But it should also realise that its actions must inspire respect. The creation of negative headlines does not sell lottery tickets, only newspapers, who thrive on them. When the Committee's lack of wisdom on this caused Camelot to sue, the sustained negative publicity must have discouraged many players and caused sales losses.

  The matters to be decided by the Commission should be reduced to a minimum, and any decisions must be of a nature which increases the public's love and respect of the Lottery.

  Financially all competition for running various aspects of the Lottery increases overheads but not necessarily takings. As was obvious, Camelot won most of the earlier sub-licences, showing the process to be superfluous. The State taking over the current Camelot personnel (as our UK Lottery Company considered doing) at the end of the current contract, and the setting up of a simple, efficient small group to choose new games of all types should be entrusted to an experienced operator. Rather than answer the other questions about licensing and regulation, we would like to offer the most authoritative advice available in the world.

CONCLUSION

  The solution to how to run the Lottery with the minimum of personnel and committees, but with adequate regulation, would best be found by inviting Ireland's experienced national lottery director, Ray Bates, to outline the simplest way of re-organising all aspects of the National Lottery for licensing, regulation and image. For almost a decade he and Guy Simonis were regarded as the best authorities internationally. That does not mean inviting Mr Bates to submit a report which will then be rejected, due to unidentified lobbying, or opinions less expert than his.

  We must honestly trust the man who was the head of A.I.L.E. for many years, and thus has a deep and thorough knowledge of most other lotteries[21]. Moreover he has coped with the monthly challenge of countering Camelot's competition at his borders. He knows more than others, and can reduce the expensive and wasteful confusion which British bureaucracy and powerful lobbying have caused. It is axiomatic that bureaucrats create jobs for more bureaucrats, yet decline responsibility for mistakes, by erecting an "arm's length" chain, so that nobody is exposed to blame in the end.

  After he has presented the efficient reshaping, Ray Bates could also be invited to select the best young director to run the new operating company. That would leave adequate time for him to be fully up to speed before taking over, with more than Camelot's knowledge of the idiosyncracies of each part of the country, the regional press, and the challenges offered from the "gambling market".

C.  DISTRIBUTION AND FUNDING

1.  Treasury's structure, priorities and thought processes

  In our experience, there are Treasury officials who deplore the Lottery, because it risks reducing their work and area of power, by hypothecating funds for certain purposes. Tessa Jowell reproved some sporting groups for expecting funding because they had received it before. The Treasury, she said, needed to be re-convinced, year after year, of the necessity of any funding.

  Since long before the Lottery started, nobody in Treasury has acted as though the productive use of leisure time were essential to the well-being of the UK. The above-quoted annual payments to sport in the UK are risible compared to the size of the population, and the state income from sport. The huge disparity between funding to the DfES (mental and skills education) and the DCMS (physical, emotional and spiritual education) illustrates this lack of recognition of the needs for a well-balanced life. It is also illustrated by the percentage of GDP spent in the UK on culture and sport, compared to Germany, France, Denmark, Finland and many other countries listed by UNESCO and the EEC.[22]

  Yet the representatives of Treasury who consulted us on the subject of "the cultural void" are not to be found anywhere in the PMS Parliamentary Companion.

  In the forgoing analysis of responsibility, we did not mention the particular case quoted in the Evening Standard, (15 May, 2001—Who comes after Young?) ". . .but a succession of wet or ignorant ministers in nominal charge at Culture has ensured that (Robin) Young, like his predecessor Sir Hayden Phillips, has done most of the real decision making." That means the Dome, Wembley, the proportions to arts and sports participation, the withheld funds. No correction to that claim was published.

  Yet each year the "ignorant" ministers are expected to fight the Treasury to increase the size of the grant to the Department. The result is the constant return to the "status quo" picture which even the Prime Minister has complained is impossible to budge.

  Despite the many encouraging promises made, there will be no major funding changes, particularly in the absence of powerful lobbyists (as the world of gambling can afford) to trace through the supply line within the Treasury.

  We campaigned from 1987 to bring in the Lottery to change the quality of life for all, in particular as the most positive form of crime prevention available. The DCMS (then DNH) replied (Andrew Ramsay, 6 January 1994):

    "Responsibility for policy in crime prevention matters rests with the Home Office. As you have commented on many previous occasions, the provision of improved facilities and opportunities may very well turn individuals away from crime towards more socially acceptable and personally beneficial activities. The Government would be delighted if this was the case, but it is not a direct policy objective for the Lottery."

  In late 2003 we invited the NAO to consider some calculations of the savings to the State, if a full-scale intergovernmental plan were set out, reducing obesity, ill-health, drugs, alcohol misuse, violence and absenteeism by the organised encouragement, in the most attractive ways possible, of the practice of arts/sports daily participation.

  Despite the clear demonstration of our huge alcohol misuse costs (£55 million a day), obesity (£2.5 billion. a year) and drugs (£6 billion a year)[23] plus the unchanging pattern of British yobbish ("uncultured") behaviour in any holiday resort in Europe, these arguments, even if presented by Gordon Brown himself, risk being rejected on purely economic grounds within the Treasury.

  So the Prime Minister's pleas for fitness for all and this revision of the Lottery distribution provide the ideal catalyst for a reversal of this long-standing structural block.

  If the DCMS and the Lottery together decide to accept the responsibility of touching all the 10 million young people between seven and 21, then the scale of funds must be radically changed to provide for the 10 million people, not just for token groups.

  The value of the Lottery adopting this clear focus of being for something, instead of a passive machine to process endless applications is inestimable. Its image, and consequently its saleability, can be transformed. Ten long years have been given over to single projects, large and small, and the time has now come for the "bold gestures" asked for by Sir Robin Day and the Rothschild Royal Commission on Gambling, and excluded or ignored by whoever drew up the terms of reference for the Budd Report.

  The regular publicity and stimulation which the Lottery can give to these nationwide purposes can transform attitudes far simpler and quicker than formal governmental plans which tend, in any case, to be restrictive rather than inspiring.

2.  Olympic Bid

  Any self-respecting country would fund its Olympic Bid out of State funds. For the Lottery to fund this instead of the State is not wise. Headlines about the Bid cannot stimulate sales to the same extent that similar sums spent on personal sports participation for all young people can do. In the end the sportsmen who play in the Olympics will survive on sponsorship and the bulk of the Lottery funds will pass through the hands of property developers.

  As we have some excellent role models to inspire the Olympic Bid, a certain stimulation to Lottery sales should be forthcoming. But the refusal to recognise the right of every young person to participate in sport training and coaching is an evasion of responsibility, for which the Treasury is ultimately responsible.

3.  "Does the National Lottery have the right focus?"

  The overall picture we have painted at the outset shows a categorical "No" to this question.

CONCLUSION

  For the above reasons, CAARE believe that there must be radical reform of both the National Lottery and the responsibilities of the DCMS.

  If these are focused on the most constructive use of leisure time possible for all young people, which requires a fundamental change in Treasury, a number of the expensive ills which beset the UK would be reduced and eventually eliminated.





1   Current Treasury heads for Public Services are:
Managing Director Nick Macpherson
Directors Joe Grice, Jonathan Stevens, Anita Charlesworth, Ray Shostak
Education, Training & Culture Stephen Meek

 Back

2   The Best Lottery in the World? (The Lottery Promotion Company Limited, 1993) Page 24. Back

3   See also the Times, letters: 16 October 2001. "There are some 10 million young people in Great Britain between the ages of seven and 21. Private schools and clubs apart, we have minimal provision of facilities and coaching to enable them to participate in sport and physical education. The State spends one eighth of what Germany and France each spend annually on cultural activities (including sport) and, of that, only a tiny proportion goes to sport (one seventeenth). Something urgently needs to be done to persuade our politicians to remedy matters.
The Council for the Advancement of Arts, Recreation and Education (CAARE), a charity whose aims we wholeheartedly support, advocates an immediate and independent lottery endowment of at least £3 billion to promote sport at the grass roots and to provide a permanent network of training and coaching closely integrated with schools.
CAARE's founder, Denis Vaughan, one of the keenest advocates of the introduction of a National Lottery, is appalled that funds generated by it have been hoarded over the last four years, with approximately £3.5 billion still to be paid out. In addition CAARE is lobbying strenuously for the Government to spend much more on sport and cultural activities to achieve something nearer the expenditure of France and Germany.
All this would mean a fitter, healthier and, we think, happier population, with fewer young people given little choice other than to idle on the streets or in front of computer games. It might also mean that the lottery would gain in popularity were its purpose clearly seen to be a major contributor to such funds".
(Signed) Steve Backley, Roger Black, Dwain Chambers, Linford Christie, Sharron Davies, John Parrott, Paula Radcliffe, Tessa Sanderson, David Seaman.
The Times, 23 October 2001. "I am writing to express my strong support for the sentiments expressed by my fellow British sportsmen in these columns. (Letter 16 Oct). There is no doubt in my mind that the greatest sporting legacy that the lottery can give this country is the opportunity for every young person, regardless of which school they attend, to develop an active and healthy lifestyle.
The Government is finally realising the broader societal benefit of fostering a sporting ethos within this country, but the time for words is well past as too many of our young people have been let down by the current status quo."
(Signed) Jonathan Edwards.
The Times, 23 October 2001.
"We support our sporting colleagues on the need for a great deal more government and lottery funds to be allocated to grassroots sport for the benefit of young people, so that we can at least match the rest of Europe.
Perhaps the Council for the Advancement of Arts, Recreation and Education, whose aims our colleagues support in their letter, could be asked to advise on the endowment and expansion of opportunities for young people to participate in sport that greater funding would provide.
Until government takes the lives of our young people seriously, there can be no chance of Britain entering into the spirit of a sporting nation. The expense required is nothing in comparison to the returns, both social and economic.
By recognising and acting on this, Tony Blair and his Government could achieve, in one simple gesture, a transformation of the tenor of life in Britain." (Signed) James Cracknell (GB pair), Jonno Devlin (GB eight), Rick Dunn (GB coxless four), Toby Garbett (GN coxless four), Joseph von Maltzahn (GB eight), Steve Williams (GB coxless four). 
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4   To Tessa Jowell, Estelle Morris, Richard Caborn and Alan Davey. 10 September 2003. Crime Prevention. Joined-up Thinking. "I am delighted that your enquiries have caused the NAO to examine the balance management of the NLDF. As we announced in the House Magazine, we are approaching several parliamentary committees, to try to achieve a co-ordinated attack on the patently insoluble crime situation in the UK, for which I lobbied so hard to bring in the National Lottery.
Enclosed is the case that we have presented to the committees, and some background to the formation of the DNH/DCMS and the Dome which may be new to you. To tackle our proposed positive solutions to crime, increased state funds as well as lottery funds will be necessary. Matthew Taylor's presence at the Downing Street Policy Unit may help advance this approach.
Can the DCMS obtain a figure, equal to the expenditure of breweries on promoting the use of alcohol, to urge subtly the active and healthy lifestyle which Jonathan Edwards, many other sportsmen and our policies have advanced for years? But surely the amount and division of funds within the DCMS also needs serious examination. Should it not be tripled at least?
Currently only 8% of the children and youths eligible for musical teaching have access to instruments of any kind. So the Department is less than marginal in its effect on the general public. Moreover, as was mentioned in my initial Adam Smith Institute case for an Arts Lottery, the debasing education which is circulated daily by the tabloids merits a counter attack. Deirdre's casebook in the Sun teaches millions of people to explore three in a bed, wife swapping, regular betrayal of many kinds and inverted sex patterns. That demonstrates the market forces unchecked, which tend towards the lowest common denominator, which is usually below the belt.
Virtually nowhere in Murdoch's or Desmond's papers can I find any encouragement of developing the subtle aspects of human behaviour, or the way to regular achievement of bliss, inner joy and spiritual uplift. How can this be shaped? Not through an undiluted diet of heavy metal, and I doubt that it crosses Alistair Campbell's mind often.
Could we meet in the near future to look at a shape for a major growth of the civilising effect of the DCMS on daily life at the grass roots level, and leave to one side for a few years the more elitist patterns instigated by Sir Hayden? The masses are paying, but not benefitting." 
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5   Satprem. The Mind of the Cells. Institute for Evolutionary Research (NY 1982) ISBN 0-938710-06-0. Shaun de Warren You are the Key Wellspring Publications (GB 1988) ISBN 0 95135200 0 8. Shaun de Warren The Mirror of Life. Your Adventure of Self-Discovery. Wellspring Publications (GB 1991) ISBN 0-9513620 5 9. Back

6   Daily Mail, 27 December 2003. Page 39 £5 million price of putting youngsters in touch with their emotions. Back

7   Denis Vaughan. Zweitausendeins, 1992 Schlag auf Schlag. English version (unedited) The Effect of Music on Body and Soul (- How to Stay Young with Rock-How to Kick the Need for Drugs).
Denis Vaughan. Abstract from 1993 National Meeting of the American Association for the Advancement of Science. Non-verbal ways of transmitting subtle emotions to an orchestra are described, and the most effective way of maintaining the composer's pulse character throughout the work. 
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8   "The Operation of the National Lottery" Memorandum for the CMS Committee, October 2000. Paragraph 4, The role of the Lottery Commission: "In March 1998 we read, (and copied to HM Treasury and the DCMS) a report about the New York Lottery, established in 1967. It doubled its sales in five years, 1992 to 1997, by reshaping its image. Sales of $2 billion became $4 billion at an annual growth of 14%. This stopped all the stories about the public tiring, the need for novelty and other excuses for falling sales.
(i) New York: made changes to refocus its raison d'être: raising funds for the public good. "I'm very proud of having almost $4 billion in sales, but I'm more proud of the fact that we have been able to make this a more responsible lottery" said the Lottery director, Jeff Perlee. He warned that lotteries which concentrate on the bottom line to the exclusion of the main goal-raising money for the benefit of others-risk a backlash by the general public.
"If we lose sight of our responsibilities, we'll find ourselves getting slapped real hard by the press and the public, like those lotteries that start thinking they were businesses and forgot they answer to a higher boss, which is public opinion." Perlee still sees the on-line system as a very efficient way to deliver the goods. "The one thing I don't think anyone can argue about is that when the image of the lottery is of a good corporate citizen and good community participant, everybody feels a little bit better when they buy a ticket."
(ii) Georgia: "Targeted contributions are good for all involved. . .a plan that has made the Georgia lottery one of the most successful in North America."
(iii) Minnesota: "Specific designated beneficiaries for lottery proceeds are very beneficial both to the image and the sales of the lottery. . .A significant minority of players plays without a real expectation of winning, and yet with the knowledge that their money nevertheless goes to a good cause."
(iv) Maryland: "There are also fence-sitters, for whom the support of a good cause might be enough to turn them into lottery players. Even more important are the non-lottery players-if they feel good about the revenues a lottery generates, they and their elected representatives will support the lottery."
(v) Western Australia: "Awareness of community benefits is not the primary reason our players choose to play, but it is important in rationalising a loss, and is a reason why they continue to play." 
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9   The Times. 4 November 1994. "As one who for many years was a solitary advocate of a national lottery, may I express the hope that the government will streamline and simplify the system for deciding which good causes are good enough to be given lottery money.
On 25 November 1967, the Times published a letter from me suggesting a National Lottery to raise funds for the (then unbuilt) National Theatre. A lottery, I argued, could also raise massive funds for a variety of other cultural and social projects. The idea was to bridge the gap between public funds and private philanthropy in those areas of national life where more expenditure was desirable.
In 1978 these arguments were accepted by Lord Rothschild's Royal Commission on Gambling. Rothschild recommended "a single National Lottery for good causes". In the 1970's and 1980's I repeatedly lobbied Cabinet ministers of both parties. Nothing happened until 1992, when the present Prime Minister and the then Home Secretary, Kenneth Baker, to their great credit, boldly broke free from the long-standing, hidebound prejudice against a lottery.
Now, at last, the National Lottery is about to begin. The potential benefits are tremendous. The nation's gambling urge will be harnessed for widespread social benefit. The prize-winning draws will give huge mass entertainment.
But what a fiasco there will be if the system for distributing funds to deserving causes is cumbersome and bureaucratic, with too many committees and quangos. And as to the Millennium Fund, whatever that is for, the millennium commissioners should hurry up because the year 2000 will be here sooner than they think.
The lottery was created to help good causes, to enrich the quality of life. This must be done with boldness, imagination and speed. Otherwise a great and popular enterprise could go off at half-cock.
(Signed) (Sir) Robin Day. 
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10   First set out in The Fifth Year (Lottery Promotion Company Limited, November 1998) by Richard McGowan, and presented to the DCMS permanent secretary, Robin Young, by CAARE's board member, Sir Michael Bett, Head of the Civil Service Commissioners, and co-author of the idea. Back

11   House Magazine, Margaret Talbot, CCPR. "Serious about Sport?" 23 June 2003. Back

12   Full text available as Appendix E of The Lottery Promotion Company response to the White Paper, A National Lottery Raising Money for Good Causes, May 1992. Back

13   Lottery Promotion Company, December 1993. Launching the National Lottery. Practical Hurdles to Overcome. Speakers: Guy Simonis (President Elect Intertoto), Sir Ivan Lawrence QC, MP, Lord Donoughue, Denis Vaughan. Chaired by Lord Birkett. Back

14   Guy Simonis, Reidar Nordby, Ray Bates, Richard Frigren. Back

15   "In 1998 gambling turnover saw £18.5 billion wagered in casinos with a yield (the amount wagered minus the winnings paid out) of £478.5 million. £8.4 billion turnover on betting yielded £1,856 million. £6.3 billion wagered on gaming machines yielded £1,306 million. Only £5.4 billion was wagered on the National Lottery, (prize fund based on 45% of on-line ticket sales) yielding £2.687.9 million. £1.955.8 million went to the good causes, £698 (13% to tax (including Camelot's corporate tax and VAT), and the rest went to Camelot's expenses, and profits. Bingo's turnover has grown to £2.4 billion, yielding £678.1 millio. If the government wishes to improve the quality of life, then it should consider the level of duty and taxes on all other forms of gambling, which are otherwise functioning mainly for profit, so that the lottery, which has to pay 12% (13%) taxes and 28% to good causes is not penalised.
It stands to reason that, with yields on betting as high as £1,856 million, handsome funds can be found for high-level lobbying, and expert presentation of the case for reducing taxes on gambling. Sport, to take one example, has never had sums of this nature to fund a detailed lobbying campaign." 
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16   Budd gambling review report 2001.
13.1 Our terms of reference require us to concentrate on gambling; they do not require us to consider the health or prosperity of the activities on which gambling may be based. The Rothschild Commission (1978) was particularly required to consider-The contribution made from the proceeds of gambling towards support of other activities (including sport), the means by which this might be enhanced, and the conditions imposed.
14.7 80% of people surveyed thought that doing the National Lottery was gambling. 73% had bought a lottery ticket or scratch card in the last year.
14.20 We have noted that in Australia radical change to gambling legislation resulted in a rapid proliferation of gambling opportunities. The Australian Productivity Commission reviewed its effects. Among the surveys it commissioned was a national survey on community attitudes to gambling, which found widespread concern about the expansion of gambling. Around 70% of respondents (including a majority of regular gamblers) considered that gambling does more harm than good. At 2.3%, the rate of problem gambling in Australia is the highest noted in the international comparisons given in the British Gambling Prevalence Survey. We think that the Australia experience offers reinforcement for a cautious approach.
17.62 Although some submissions claim that it is possible to increase the availability of gambling without increasing problem gambling, the weight of the evidence is the other way. 
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17   Daily Telegraph, 21 January 2003. "Denis Vaughan's distinction (letter Jan.18) between "harmless" and "addictive" gambling is far less important in causing excess than its commercial promotion. Gambling is a form of entertainment and not, in the long run, a way of making money for the punter. The danger, therefore, occurs when it results in chasing losses. The best way of reducing this is to provide gambling on the basis of unstimulated demand.
This was the situation in Britain at the time of the EEC hearings in December 1991, to which Mr Vaughan refers. I also contributed to these hearings. At that time there was more gambling in Britain than other European countries. However, in view of gambling public policy, there were fewer casualties in Britain. The National Lottery caused the abandonment of this approach.
Subsequent deregulation and the Budd review have been largely concerned with the economics of gambling. There was little true appreciation of the psycho-social factors involved in excess. Mr. Vaughan advocates allocating a portion of all gambling stakes to "good causes". This is unlikely to be acceptable to commercial interests unless it can be exploited by allowing even more vigorous promotion of gambling."
(signed) Dr E Moran, Chairman, the National Council on Gambling. 
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18   Leisure Industries Research Centre, 25 November 2003. Total income £4,997.41 million and Total Expenditure £966.01 million. Back

19   Sport England annual reports: 1972-£3.6 million. 1973-£5.0 million. 1974-£6.57 million. 1975-£6.33 million. 1976-£8.3 million. 1977-£10.2 million. 1978-£11.5 million. 1979-£15.2 million. 1980-£15.5 million. 1981- £19.2 million. 1982-£20.9 million. 1983-£28 million. 1984-£27.1 million. 1985-£28.6 million. 1986-£30.1 million. 1987-£37.3 million. 1988-£37.1 million. 1989-£38.4 million. 1990-£41.8 million. 1991-£44.7 million. 1992-£46 million. 1993-£47.6 million. 1994-£50.6 million. 1995-£49.8 million. 1996-£49.8 million. 1997-£47.4 million. 1998-£32.9 million. 1999-£31.6 million. 2000-£33 million. 2001-£37.4 million. 2002-£42.7 million. 2003-£35 million. Back

20   At 30 November 2003, the Overall Total in the NLDF was still £2,875,472,193.19. Back

21   In the 1993 Intertoto congress, Ray Bates and Guy Simonis were the chief speakers. Bates is quoted as concluding: "It is clear that the North American philosophy is to `load the jackpot' and the European view is to take a far more moderate approach." And echoing Guy Simonis' earlier warning: "The notorious $100 million jackpots which, in some cases, represent 25 times the base jackpot, must be high on the list of suspects for the murder of the lotto game in the U.S." Bates states that paradoxically, "extremely large jackpots could be damaging to the lotto game in North America while relatively small jackpots could be inhibiting the growth of lotto games in Europe."
He noted that each time a jackpot is of a certain size, sales decline. "The absolute size of a jackpot is not of primary importance. Even a relatively small jackpot attracts attention if it can be presented to the players and the media as the `Biggest Jackpot Ever'."
His conclusion: "Develop a game at a slow and steady pace with frequent record jackpots, each one not significantly higher than the previous one." And: "We should not be afraid to change the lotto formula as the situation demands it. The $100 million plus cul-de-sac in which some lotteries are now caught should be a lesson for all of us and might cause the disinterested outsider to ask "Why didn't somebody shout stop?'" (Intertoto Newsletter, Issue No 22, December 1993, Page 10.). 
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22   The budget of the DCMS, expressed as a proportion of the State Expenditure has fallen by almost a third since the start of the National Lottery and shows no sign of returning to its earlier levels.
Year
Budget for the DCMS
As a % of
As a % of State
In billions
GDP
Expenditure
1993/94
£1
0.16%
0.42%
1997/98
£1
0.13%
0.34%
1998/99
£1
0.10%
0.26%
1999/00
£1
0.11%
0,29%
2000/01
£1
0.105%
0.28%
2001/02
£1.1
0.11%
0.29%
2002/03
£1.2
0.105%
0.28%
2003/04
£1.4
0.11%
0.29%

When seen in comparison with the spending of our European and Commonwealth neighbours our culture allocation is paltry. It is the key to the British reputation as the barbarians of Europe, helping to increase crime, violence, drunkenness and drugs.
% of State Expenditure spent on culture
France
2.40%
Germany
2.40%
Switzerland
2.20%
Italy
1.75%
Australia
1.60%
Canada
1.50%

These figures are based on research by Lea Paterson of the Times using the Treasury's own figures, given specially to CAARE, and on international figures published by UNESCO on their website, but not updated for some years.
A request to ESTAT for updated figures received the following reply (6 January 2004)
"Unfortunately we do not have any data on the funding of cultural activities at the moment, as we are actually at the stage of finalising the concepts and definitions in a Task Force and of collecting first data on cultural expenditure through a pilot survey. We expect some first results for February 2004, but as the scope of methodological problems is not clearly identified by now, it is not clear whether data will be comparable. I would invite you to re-contact me in April 2004 and I may then be able to provide you with additional information".
(Signed) Pascal Schmidt. 
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23   The Times, 22 September 2001. Britain's £6 billion a year drug habit. Heroin and crack cocaine addicts who commit crimes to pay for their drugs could each be stealing an average of £15,000 a year, and some are committing up to 800 offences.
The figures are based on Home Office research papers released yesterday which estimate that £2.3 billion is being spent on heroin by up to 295,000 users. They also show that overall, drug users in Britain are spending more than £6.6 billion a year on illegal drugs ranging from heroin to cannabis and Ecstasy.
Of that £1.8 billion is being paid out for cocaine and £353 million for crack cocaine by 290,000 users. Cannabis is used by more than three million people who spend £1.5 billion a year. Another 126,000 users spent £214 million on amphetamines.
Estimates of the size of the drugs market were extrapolated from the results of urine tests among those arrested for drug-related crimes and the 1998 British Crime Survey, in which people were asked about their drug-taking. Estimates were also based on the results of mandatory drug tests in prisons. 
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