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Government promises no more Olympic raids on lottery
21.01.2008

The government confirmed yesterday that it would make no further raids on the National Lottery to fund the 2012 Olympics as the House of Commons voted through a transfer of £1.085bn from the lottery to help pay for the Games.

Culture secretary James Purnell, speaking in advance of a vote last night on the transfer, confirmed: ?There will be no further diversion from the lottery good causes to fund the Olympics.?

Last March Olympics minister Tessa Jowell announced that an additional £675m would be taken from the National Lottery to fund the Olympics on top of an existing diversion of £410m, after revealing that the cost of the Games had nearly tripled from £2.3bn to £9.3bn.

Although Jowell made a commitment that an extra £425m taken from the Big Lottery Fund would not be diverted away from voluntary and community groups, arts, heritage and sport groups were not included in this safeguard.

The eagerly-sought announcement came after Purnell met this week with the NCVO, Heritage Link, Community Arts and the National Campaign for the Arts, who have been lobbying government to make the commitment.

It was expected that the Conservatives and Liberal Democrats would both vote against the motion to transfer the funds, however, following Purnell?s announcement of a safeguard against a further raid, the bill was passed by 357 votes to nine.

Jeremy Hunt, shadow culture secretary, told the House the decision was a victory for hundreds of thousands of charities, arts, heritage and sports clubs up and down the country. ?Their big concern was that they would be stung not just today but many times in the future,? he said.

Purnell also announced that the Treasury would look again at introducing a gross profits tax, a measure that would allow tax to be paid after rather than before prizes have been paid to players.

Liberal Democrat MP Don Foster welcomed the move and said accountants PricewaterhouseCoopers had predicted a gross profits tax could raise an extra £400m by 2019 that could be given back to lottery good causes.

Concerns have been raised this week over money the government promised to repay to the lottery after the sale of land used by the Olympics in east London (pictured), following reports that the housing market may affect its value. A number of wildly different estimates, ranging from between £880m to £2bn, have been made about the value the land will be resold for.

John Wittingdale, Conservative MP and chairman of the select committee on culture, media and sport, said even if the money were to be repaid in full, it may not be until 2030. ?A degree of uncertainty has been entered into the lottery being reimbursed from its contribution and that is something for concern,? he said.

However, Purnell dismissed the reports and said the government was confident it would be able to deliver the money back to the London Development Agency and the lottery ?regardless of market conditions at the moment?.

He also told the House he had received a letter from the National Lottery Commission revealing that it expected the returns from the lottery for good causes would rise from £600m to £1bn over the next ten years under Camelot?s renewed licence.

The order is now expected to go before the House of Lords at the end of January.

Source - Gemma Ware, Professional Fundraising Magazine www.professionalfundraising.co.uk

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