DCMS stalls on lottery cost recommendation

The Department for Culture, Media and Sport is dragging its heels over a Treasury recommendation that would ensure lottery grants cover the overhead costs of charities.

The recommendation was contained in last September's Treasury review of the voluntary sector and public services. It said the DCMS would consider a policy of full-cost recovery to be implemented by all lottery distributors, with a target date of April this year.

But five months after that deadline, DCMS is still considering whether to adopt the policy.

A spokesman said the department was writing a strategy for implementation of the Treasury review and would consult with all lottery boards and its own finance division on whether to accept the principle of full-cost recovery.

But chief executives' body ACEVO said that the DCMS should instruct the Community Fund to adopt full-cost recovery.

Chief executive Stephen Bubb said: "Lottery funding has become crucial for voluntary and community organisations. In the past lottery distributors have not been prepared to cover core costs. The government has committed itself to full-cost recovery for its contract and grant activity. Now it's time for the lottery distributors to adopt it. The Community Fund has gone some way in our direction, but we want them to go 100 per cent for full-cost recovery."

In 2002 the Community Fund relaxed its policy of not paying for charities' core costs. The distributor now pays for part of the salaries of staff directly supervising employees working on funded-projects but not for the salaries of senior staff, even if they spend part of their time working on a project.

Last week the Government said 85 per cent of the recommendations contained in the cross-cutting review were either completed or on target.

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