Department for Culture Media and Sport
The Government is restoring the National Lottery to its original purpose. A key part of this is the restoration of the shares of the National Lottery to 20% for each of the good causes of sport, heritage and the arts.
The Lottery Shares Order was passed in November 2010, following a public consultation, and amends the percentage share of money held in the National Lottery Distribution Fund in two stages, in order to protect the funding to the voluntary and community sector through the Big Lottery Fund.
The Government also wants to see the Big Lottery Fund focussing its funding on the voluntary and community sector as part of the Government's wider Big Society agenda. After a public consultation, in December 2010 DCMS Ministers issued a new policy direction to the Big Lottery Fund that will require them to take into account the need to distribute money to projects that would assist people and local communities served by the voluntary and community sector when giving out Lottery money.
As part of the reforms, responsibility for the Big Lottery Fund moved from DCMS to the Cabinet Office (the lead department on the Big Society agenda) in April 2011.
The Government’s reforms also aim to reduce the amount that Lottery distributors spend on administration so that as much money as possible that is raised for good causes is spent on projects.
Research conducted by the Department suggested that 5% would be a reasonable upper limit for grant processing costs, and that best practice among charities involved in outreach was of gross administrative costs in the range 7.5%-10%.
John Penrose asked the Lottery distributors to set out their plans to cap grant processing costs at 5% and gross costs at 8%, and for them to report to him each March on their progress and future proposals. Ministers set out a deadline of March 2013 for the Heritage Lottery Fund to comply with these caps. The Big Lottery Fund, Arts Council England, Sport England and UK Sport were given an extra 12 months to take account of the impact of other reforms on them which involve changes to their income and merger respectively.