The Office for Civil Society has been criticised for changing the wording of the Big Lottery Fund’s additionality principle.
The new version, included in a consultation document issued yesterday, removes the line that 'lottery funding is distinct from government funding'. The consultation is about the new 'policy directions' the OCS is proposing to give the BLF.
It immediately sparked concerns that the government had missed a chance to provide greater clarity on the definition of 'additional' and had instead further muddied the waters around the independence of lottery funding.
Additionality – the principle that lottery funding should be additional to government spending, rather than a substitute for it – has been at the heart of the National Lottery since it was created in 1994.
The BLF's latest annual report defines it as: "Lottery funding is distinct from government funding and adds value. Although it does not substitute for Exchequer expenditure, where appropriate it complements government and other programmes' policies and funding."
The draft policy directions, issued following the government’s decision to transfer responsibility for the BLF from the Department for Culture, Media and Sport to the OCS, propose a new wording of "additionality and complementarity".
It says: "The development of programmes and funding of projects should complement and add value to the plans of action and activity of other funders and parties working towards the fund’s goals, including government funding."
Jay Kennedy, head of policy at the Directory of Social Change, a training provider that lobbies on behalf of small charities, said the description "doesn’t match our understanding of additionality, which is that lottery funding should not be a substitute for mainstream government funding".
He said the government had missed an opportunity to provide greater clarity on additionality by publishing a "fuzzy" statement that did little to clarify how lottery and government funding should be distinct.
Kennedy also said he was concerned that the document lists one of the BLF’s potential funding priorities as "strengthening and increasing the capacity of the social investment market".
He said: "We absolutely don’t think this should be the BLF’s role. The BLF might wish to develop social investment-type products and work with other funders doing that kind of work if it saw that those delivered good outcomes.
"But saying they should be involved in building the market sounds suspiciously like the mission of the Big Society Capital."
He also criticised the OCS for asking organisations to limit their consultation responses to a maximum of 400 words, saying the DSC would ignore it and write more.
Roberta Blackman-Woods, the shadow minister for civil society, said she was concerned the directions "will result in yet more uncertainty for the voluntary and community sector at a time when funding and resources are being reduced as a direct result of government cuts".
She added: "I am particularly concerned that the government’s new policy directions might narrow the criteria for those seeking funding from the BLF and result in further restrictions on the funding available to voluntary organisations."
The current chair of the BLF, the former Conservative MP Peter Ainsworth, said in an interview with Third Sector in June that he supported the additionality principle.
"There has been a tendency in recent years for the lottery to be used almost like taxpayers' money," he said. "It isn't taxpayers' money: it's there to plug holes that the government would otherwise struggle to fill. Lottery money is additional."
Ainsworth said in a statement yesterday: "Now more than ever, the BLF must be responsive to the evolving needs of the communities we serve.
"I anticipate that pressure on lottery budgets will continue to increase and we want to ensure we intelligently address the needs of our communities and those most in need."
The consultation closes on 18 November.