160304 Questions and answers about the new distributor

1) What is happening?

Tessa Jowell, the Secretary of State for Culture, Media and Sport has asked the New Opportunities Fund and the Community Fund to work together to create a single new lottery distributor. Both bodies have welcomed these proposals.

In June 2003 they set up a joint committee of CF and NOF Board members to drive the merger forward and in November 2003 both organisations began moving to one management team when Stephen Dunmore was appointed Chief Executive.

On 5 March 2004 ministers announced that the new Chair of the co-terminous Board for the New Opportunities Fund and Community Fund will be Sir Clive Booth. DCMS is in the process of appointing the other sixteen Board members. The Department expects to do this so that Sir Clive and the Board can come into being formally on 1st June.

2) Why is a new distributor being created?

The decision to create a new Distributor is part of the Secretary of State’s review of the National Lottery. DCMS published a consultation paper on Lottery distribution policy on 29 July 2002. It was in this wide-ranging Lottery Review that proposals for a new Lottery distributor first emerged. DCMS received more than 400 substantive responses from local authorities, charities, voluntary groups, individual members of the public and Lottery distributors including a joint response from the New Opportunities Fund and Community Fund.

The Secretary of State subsequently published a National Lottery Funding Decision Document (in July 2003) setting out her proposals for Lottery distribution. In it she sets out the case for a new Distribution body which will take on the legal powers and functions of the Community Fund and the New Opportunities Fund. This document was the subject of a three-month consultation period that closed at the end of October. We understand that DCMS will produce a summary of the comments it received, but they have not informed us of a date for its publication. You can find out more about the review of the National Lottery and DCMS consultation on the DCMS's website.

3) Why are the Chairs of the Community Fund and the New Opportunities Fund standing down?

As a step towards achieving merger, the Secretary of State has appointed a single Chair for the Community Fund and the New Opportunities Fund, who will have the authority vested in him to lead both organisations working alongside a co-terminous Board. Sir Clive Booth takes up post on 1st June 2004 and the two current Chairs of CF and NOF will stand down at that point. The Secretary of State has paid tribute to the work of the current Chairs, and the Boards they lead.

4) How will the new Board be configured?

Sir Clive Booth, the Chair, will work alongside a co-terminous Board comprising 17 members who will serve as the single Board for the Community Fund and the New Opportunities Fund. Of the seventeen members, three will represent Scotland, Wales and Northern Ireland. This is the same structure as the current Board of the Community Fund. Existing members of both Boards were eligible to apply.

5) How will the new Chair/Board be recruited?

Advertisements for Board members were placed in the national press in October 2003 and the application stage is now closed. DCMS hopes to announce the appointments in April 2004. DCMS recruitment of the Chair and member positions is being run in accordance with the Commissioners for Public Appointments’ guidelines.

6) Who is the new Chair?

Sir Clive Booth was previously Vice-Chancellor of Oxford Brookes University and, until 2003, Chair of the Teacher Training Agency. He is also Deputy Chair of the South East England Development Agency (SEEDA) and Chair of the Central Police Training and Development Authority.

7) Does the new distributor have a Chief Executive?

Stephen Dunmore, formerly the Chief Executive of the New Opportunities Fund will lead the Community Fund and the New Opportunities Fund into the merger.

8) What is the timetable?

The new distributor will be launched in June 2004 to coincide with the new Chair and Board taking up post. The new corporate identity will be made public at this time, and all grants awarded from this date will be made in the name chosen for the new distributor. For legal reasons there will also have to be a reference to the existing organisations in our application materials and correspondence (whether Community Fund or the New Opportunities Fund). New grant programmes will be launched during the summer. All grant programmes launched prior to June 2004 will continue to be operated to their published timetables.

Legislation to constitute the new body as a separate legal entity is expected to complete its passage through Parliament by autumn 2005. Until this happens the Community Fund and the New Opportunities Fund will operate in an administrative merger whereby they share a name, premises and corporate services and jointly run grant programmes but retain their individual legal powers and functions.

9) What will the new distributor do?

The new distributor will build on the experience and best practice of both organisations to simplify funding in those areas where the two bodies currently overlap, and to ensure lottery funding provides the best possible value for money.

The new body is intended to achieve more than simply adding the two existing bodies together. As well as leading on good practice in funding distribution, it is likely to take the lead on joint working on a range of Lottery issues and to develop new approaches to the way we work with organisations funded by the lottery.

The new distributor will continue funding for charities and the voluntary sector and health, education and the environment, but will also take on the Millennium Commission’s ability to fund large scale regenerative projects. It will be a fund for community transformation, from smaller grants at local level through to big capital projects, intended to regenerate and revitalise communities.

The new body is likely to run a range of different types of funding programmes. Some of these will be ‘open’ grant programmes, where a wide range of organisations can apply by completing an application form. Other programmes are likely to concentrate on strategic partnership working across different sectors, funding for infrastructure and development, or opportunities for voluntary sector involvement in the delivery of community services.

10) What will the New Distributor be called?

The name chosen for the new distributor will be announced in April 2004. The Community Fund and the New Opportunities Fund carried out market research in early 2004 to identify a name and logo that best reflect the vision of the new distributor and associates the funding with the National Lottery. The new name will have been approved by the Secretary of State Tessa Jowell.

11) What are the benefits of the merger?

The main benefit is that it will be easier for applicants to understand how to apply and easier for the public to understand where Lottery money is being spent. The new distributor will build on the strengths and expertise of both organisations, leading to more streamlined processes and easier access for stakeholders and applicants.
We hope this will include fewer, clearer funding programmes, easier access to funding for local communities, better co-ordination with other funders (lottery and non lottery) and sensible links across programmes within the new body. Importantly it will be simpler for everyone to understand how to apply for Lottery money to benefit their community.

12) Will the new distributor be independent and its funding additional to Exchequer spend?

Like other Lottery Distribution Bodies, the new distributor will be a Non-Departmental Public Body. As such its strategic direction will be decided by the Government, but it will have the freedom to determine priorities, develop programmes and take decisions on grants. All Lottery funding has been, and will continue to be, additional to current and planned public expenditure, and will not be used to substitute for public expenditure either. Ministers have reiterated this point on many occasions, and also emphasised that Lottery funding must provide added value.

13) What do the changes mean for existing applicants and grant holders, particularly those in the voluntary and community sector?

The new arrangements will not affect existing commitments by the New Opportunities Fund or the Community Fund.
The Secretary of State has given commitments to ensure that the percentage of Lottery funding currently available to the voluntary and community sector from the Community Fund is not affected by the changes. It is very likely that the New Distributor will make 50 to 60 per cent of its funding available to the voluntary and community sector.

14) If we want to apply for lottery money will there be a long gap before you make any new grants, while you set up the new distributor? Or will existing grant programmes continue?

We expect existing NOF programmes to be managed and delivered according to the advertised timetables, and we expect all the CF programmes to remain open in 2004-2005. If any of this does not prove possible we will ensure we advertise any programme closure well in advance. We will also explain any transitional arrangements for funding from the new distributor.

15) How much money will the new body have to distribute?

The income available will come from the same streams of funding currently available to the Community Fund and NOF from the sale of Lottery tickets. Combined, this is 50 percent of the proceeds for good causes, which we anticipate will be between £600 and £700 million a year until 2009. The Secretary of State has already guaranteed the CF and NOF funding streams up to the end of the current Camelot licence in early 2009.

16) Will the new body retain its presence in Scotland, Northern Ireland and Wales and the English regions?

The new body will build on the devolved structures both funders already have in place in Scotland, Northern Ireland, Wales and the England regions. We expect to consult further on what this will mean for new funding programmes.

17) How much will the merger cost and how much will it save?

The Secretary of State indicated in the Decision Document that there will be economies of scale in the merger. It is difficult to put a figure on how much the merger will cost. However, this will be considerably less than maintaining the status quo. For instance there will be savings resulting from amalgamation of services and by putting in place one London headquarters and unified call centre services.

18) What consultation will take place and when?

Consultation will be carried out across the UK to inform the shape of the new distributor and its programmes. A consultation document will be published in the Summer of 2004, accompanied by regional events for stakeholders to participate in. More information about consultation will be added to the NOF and CF websites in April.