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Lord Monro of Langholm: I am grateful for the point that the noble Lord, Lord McIntosh, made about the capital and current expenditure by the distributors, for instance the Sports Council on capital projects and on running expenses. We have been talking about this for approximately two years, and informally one understood the Sports Council was moving towards this. When will the Government be making the policy directions so that it can get on with this, and will it be in this financial year, so that sports councils can begin to work firmly towards supporting non-capital expenditure, which we both agree is so important?

Lord Crickhowell: I should like to follow up that point, because I was about to make a very similar point, but to carry it beyond the field of the sports councils. I am most grateful to the Minister for his clarification of the position, and for confirming that the constraints placed upon the distributing bodies--confining their grants largely to capital--was a matter of direction rather than legislative limitation.

Of course, I am well aware that it was originally introduced very largely at the wishes of the bodies to be funded, who feared that if money was initially available on a wide scale for revenue funding any government

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would see this as a wonderful opportunity to cut revenue funding from the Treasury. It was therefore thought to be a safeguard. I think people no longer see it in quite that light, partly because of the problem, which has manifested itself with increasing strength as the years have passed, that there are magnificent improvements to the facilities but not enough money for what goes on inside them. In any case, people have discovered that revenue funding from the Treasury can, whatever happens, be cut, and indeed funding from the lottery may be cut. It is no longer seen as an effective safeguard, and therefore people--not just the Sports Council--are anxious to have a clarification of government policy.

I know that my noble friend Lord Gowrie, who is chairman of the Arts Council of England, has been discussing these issues with Ministers over a considerable period, but there has not yet been any real clarification of policy. There is considerable anxiety, not only in relation to sports but certainly the arts, that there should be greater flexibility, and that there should be an indication of the way things are going. In any case, the definition of what constitutes capital and revenue is always an interesting semantic exercise, and those of us engaged in business as well as in government affairs sometimes find the distinctions are not easy to make. Certainly in the field of theatrical, operatic or musical productions, for example, it is perfectly easy to argue that one is justified in funding an initial production, because it may last a decade or more, and continue to produce a source of revenue to the company. It is absurd to have a constraint on the ability to provide funding of that kind.

Grateful as I am to the Minister for clarifying that there is the capacity to change the present rules, and for some indication that it is indeed the Government's intention to do so and all the rather vague words uttered by the Secretary of State on television programmes and elsewhere that we are moving in this direction--

The Deputy Chairman of Committees (Lord Strabolgi): I am sorry to interrupt the noble Lord, but there is a Division in the Chamber. The Committee will adjourn and resume in 10 minutes.

[The Sitting was suspended for a Division in the House from 5.10 to 5.20 p.m.]

Lord Crickhowell: I was speaking of the importance of having clarification of the Government's intentions in this regard within the discretion available to them. I am grateful to the Minister for going the limited way he has today, which is helpful. The issue is of such great importance for sports bodies, bodies funded by the Arts Council and indeed the heritage bodies that I propose tabling an amendment at a later stage so that we can have further clarification and a clear statement of the Government's intentions in another place. I intend to pursue the matter further.

Lord Rowallan: I am afraid I feel the Minister did not come back to me either, and I would be grateful if he could expand slightly on his programme. The world-class performance programme and the United Kingdom Institute of Sport which was set up precluded

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any sports money having anything to do with NESTA. I am extremely concerned that money could disappear from this extremely good cause if we are not very careful. Could the Minister confirm or deny the situation?

Lord Chorley: I do not want to take up more than a moment of time. I am glad the noble Lord, Lord Crickhowell, mentioned the Heritage Lottery Fund because it seems to me that exactly the same points about revenue funding apply there. Perhaps also in addition--although I do not want to go into detail if there is to be some sort of clarification--there is the whole question of endowment funding, which is also wrapped up with this sort of issue.

Lord McIntosh of Haringey: Noble Lords opposite are entirely right that the question of capital versus revenue funding is one of very long standing, not just in relation to the lottery but in relation to public expenditure generally and indeed in all walks of life. It has been going on for a long time, it covers all of the good causes and more, and it will not go away. I rather thought that if I left noble Lords opposite to it, they would continue to debate the issue among themselves and I would not need to intervene at all, because they have put both sides of the argument among themselves perfectly satisfactorily. I recognise the validity of the different points which they all make.

All that remains is for me to make clear again that the Government recognise that it is not possible to go over to complete revenue funding, because of the wishes of the distributors and the good causes to preserve additionality and because of the fact that it would gradually clog up the flow of funds for new projects; nor is it possible to stick to the original position of funding buildings and not people. I have already given an undertaking that policy directives are in preparation. I can confirm that we are already in discussion with the distributors about those policy directives. We hope soon to be able to enter formal consultation with the distributors, and we hope to issue the new directions in March or April this year.

Lord Chorley: Before the Minister sits down, can he say whether these policy directives will also cover the question of endowment funding?

Lord McIntosh of Haringey: Yes, I think they should do, because endowment funding is in competition. Although NESTA is not part of lottery funding as such, it is clearly in a sense in competition with streams of funding for new money coming in from the lottery.

Lord Skidelsky: Before the noble Lord, Lord Redesdale, has the last word on this group of amendments, may I make one interjection? The Minister was quite right to remind us that Section 28 of the 1993 Act allowed the percentage for each good cause to sink to 5 per cent. If I may repeat the point I made before, in the situation facing us today there is an urgent need to protect the old good causes against the politically insatiable demands of the new good causes. That is quite

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a new situation because this new good causes did not exist in 1993. That is just an observation which does not call for a reply.

Lord McIntosh of Haringey: I need to reply because, first, I have given firm and literal assurances about our intentions, and, secondly, the Bill itself contains percentages which reflect our intentions which do not include going down to 5 per cent.

Lord Redesdale: The purpose of the amendment was to achieve assurances, which the Minister has given to an extent, although it has been the basis of an extremely wide-ranging debate. I hope the Minister will accept my scepticism, not because I do not believe he has every intention of honouring the commitments he has made but because I do not believe that many governments will pass up the opportunity in the future of making additional alterations to the National Lottery Bill. I believe that is an argument we will have in further legislation, if that ever happens. I take the Minister's assurance that he does not see it happening at the moment, but I look forward to having those arguments during debates on that legislation. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Rawlings had given notice of her intention to move Amendment No. 39A:


Page 19, line 11, leave out from ("for") to end of line 14 and insert ("expenditure on projects to mark the year 2000 and the beginning of the third millennium").

The noble Baroness said: I hope that it will never get to the stage of going down to 5 per cent. I do not intend to move the amendment.

[Amendment No. 39A not moved.]

[Amendments Nos. 39B and 40 not moved.]

Lord Skidelsky moved Amendment No. 40A:


Page 19, line 21, leave out (", without the approval of the Secretary of State").

The noble Lord said: This is a probing amendment. We do not know what the Government intend here. Subsection (5) states that,


    "NESTA may not spend their endowment, or any part of their endowment, without the approval of the Secretary of State".

Is it intended that NESTA should get some approval or might get some approval to spend its endowment? We believe that, on the face of it, it should not spend its endowment. Its endowment should be to provide a stream of income for the causes it supports. Under what circumstances do the Government envisage that NESTA would be spending its endowment? We want to get clarification of these questions. That is why we have tabled the amendment. I beg to move.


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