Third Sector debate: What does 'additionality' mean?

Mathew Little sets the scene and three major figures give their views on a key National Lottery question.

When the Conservatives created the National Lottery in 1992, the then Home Secretary Kenneth Baker declared: "The Government does not intend that the money provided from the lottery should substitute for existing expenditure programmes.

"Nor do we believe lottery proceeds should go to the main areas of public expenditure, such as the National Health Service."

Ever since then, the 'additionality' debate has raged, with minimalist and maximalist interpretations. To some, it means the lottery should never replace Government spending that has been withdrawn. Others have argued that there are areas, such as the National Health Service or education, that are government responsibilities and should not be lottery-funded, regardless of whether government is living up to its responsibilities and funding them.

So when the New Opportunities Fund spent £40m of lottery cash on hospital scanners, there was an outcry. The NOF simply saw it as extra facilities government wasn't providing.

But what should government fund? Under the 1944 Education Act, it must provide education for those between the ages of five and 16 - but what else? Hospitals and schools already raise funds for optional extras.

The frontiers of public spending have also been expanded by Labour since 1997 in areas such as child care and regeneration. If the Government 'mainstreams' an area of social policy and funds it by taxation, what are the implications for lottery funding? And then what, exactly, is additional?

- Please send us your opinion so we can take the debate forward. Email thirdsector@haynet.com or write to 174 Hammersmith Road, London W6 7JP.

STEPHEN DUNMORE, CHIEF EXECUTIVE, BIG LOTTERY FUND

The Big Lottery Fund is committed to ensuring that its funding "is distinct from government funding and adds value".

All lottery distributors are signed up to the principle of additionality.

However, this does not mean that lottery distributors shouldn't complement the Government's strategies, programmes and funding streams. Nor does it imply that certain areas - health or education, for example - are out of bounds (a substantial part of the Community Fund's budget went to health and education projects); nor that all lottery funding must go to the voluntary sector. Apart from the Community Fund, from the outset all distributors have funded across the public, voluntary and, occasionally, private sectors.

In practice, what matters is the nature of specific projects. There will always be grey areas - for instance, where local authorities have powers to fund but no statutory obligation. The rule of thumb is that lottery funding should not be a substitute for government expenditure.

The blurring of the edges between the roles of the public, voluntary and private sectors, along with the increasing emphasis on partnership working and community involvement, means that any analysis of additionality is complex. Distributors take pragmatic decisions on a case-by-case basis about where additionality lies.

Funding mainstream hospital services may offend against additionality, but what about healthy living centres or children's hospices? Funding curriculum-based projects during the school day may be a dubious use of lottery money, but what about out-of-school-hours learning?

Regrettably, the debate about additionality is often simplistic and used as a vehicle for other agendas. For the Big Lottery Fund, what is most important is public involvement in shaping how lottery money is spent, and the real difference that our programmes can make to communities and the lives of people in most need.

TESSA JOWELL, SECRETARY OF STATE FOR CULTURE, MEDIA AND SPORT

The National Lottery is thriving. It has raised more than £16.5bn for good causes since it began, thereby contributing to 190,000 projects across the country that would not have been possible without the lottery.

With ticket sales rising again, it remains one of the most successful lotteries in the world. However, this does not mean it cannot be improved.

The lottery was rightly established on the principle that it should not become a substitute for mainstream government spending. The additionality principle has become a guiding force for lottery funding, and I remain firmly committed to it.

However, the original blueprint for good causes was simply too narrow.

The lottery became bigger than anyone ever imagined, and the causes that it funded needed broader appeal.

We also have to recognise that in some cases lottery funding needs to complement other streams of funding in order to deliver maximum benefit.

For example, there is a history of charities assisting the National Health Service through fundraising appeals, so why shouldn't some lottery money be set aside to help where this additional income is needed, can do most good and has public support?

Lottery money is not government money. Nor is it distributors' money.

It belongs to the people of Britain who play the lottery, and is venture capital for their communities. They need to feel a sense of ownership of the money and see evidence of it being spent on their behalf, and in their interest.

That is why handing over more control to the public through the Lottery Bill is the correct thing to do. It's about more than just defending the principle of additionality, important though that is. It means people feeling their concerns are actually taken seriously by the custodians of lottery money. It means people having genuine power to shape decisions and influence their outcomes.

In short, it means giving the lottery back to the people.

JOHN LOW, CHAIRMAN, ACEVO, AND CHIEF EXECUTIVE, RNID

When the National Lottery was established by John Major's Government, a cross-party consensus on its remit quickly emerged. Politicians on all sides agreed that a significant proportion of the 'good cause' money raised should go to the nation's charity and not-for-profit sector. At 28 per cent of ticket revenue, this was - and still is - a sizeable sum, and, crucially, lottery money was to be additional to government funding. Good-cause money would not be a replacement for services or projects funded through general taxation. Funding was open to any projects from voluntary sector organisations that were outside government priority areas.

I am concerned about the decreasing independence of the Big Lottery Fund from government. During a consultation on funding priorities, the Secretary of State announced that its funding would fit within three themes: promoting wellbeing, community safety and community learning. These closely resemble this Government's priority areas: health, crime and education. The fact that the new televised competition, The People's Millions, allows local authorities, schools and health bodies to bid for grants, suggests subtle encroachment by government into how lottery money is spent.

The political parties are blurring the line between state and lottery funding. For example, the Labour Party manifesto stated: "Labour has put more money than ever before into veterans' issues, including £27m of lottery funding during the past two years."

The strength of charities lies in their independence, specialist knowledge, passion for representing the needs of the user and ability to innovate.

They explore new ways of delivering services and campaigning that can be difficult for government and its agencies. It would be a great disappointment if statutory control increased to the point where such boldness became impossible. For the National Lottery, its founding principle of additionality must be maintained and its independence preserved.

- See Policy and Politics, page 12.

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