Editorial: Sector spared Olympics raid - up to a point

In all the sound and fury about last week's widely expected second raid on the lottery to finance the Olympics, less attention was paid to the fact that the Treasury contribution is going up massively, from the earlier £1bn to £6bn, writes Third Sector editor, Stephen Cook.

So why did the Chancellor not throw in the remaining £675m – a mere 13 per cent more – and avoid all the political flak caused by taking that sum from the good cause distributors?

Might the answer lie in the dynamics of the problematic Blair-Brown relationship and the impending leadership succession? If the Treasury had supplied all the funds, culture secretary Tessa Jowell might have been let off the hook and left looking like a strong contender for a place in a future Brown cabinet. As it is, the Blairite Jowell is now under fierce attack from the interests sponsored by her own department – arts, sport and heritage. The flak is concentrated on her.

A further twist is that her department's interests have often in the past been protected during squeezes on lottery funds, and the relatively feeble voluntary sector has taken the hit. What's different now is that we have a politically stronger Office of the Third Sector, and its minister, Ed Miliband, who is close to Gordon Brown, has been lobbying hard to protect charities and voluntary organisations. Those close to the negotiations say he has called in a lot of political capital.

The result is the qualified victory hailed by sector campaigners. It looks as if the amount the Big Lottery Fund is likely to distribute to the sector between 2009 and 2012 will be ring-fenced: its £425m extra contribution to the Olympics will come out of awards it would otherwise make to statutory bodies such as local authorities or primary care trusts. It could have been a lot worse, as one sector leader said last week – so two loud cheers for that.

The sector has not been entirely protected, of course: the £250m Olympics contribution from the arts, heritage and sport lottery distributors will mean cuts for many voluntary bodies, and umbrella bodies are rightly offering to support their rearguard action. It seems unlikely, however, that Jowell's department will secure a public spending settlement high enough to compensate those who suffer - the current spending round is clearly very tight. All this also means a potential knock-on effect for the sector and society at large: if access to sport is cut, for example, what happens to obesity and youth crime?

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