Grant-makers should consider using reserves to protect charities from inflation, minister says

Lotteries minister Chris Philp was appearing before MPs on the Digital, Culture, Media & Sport Committee

Chris Philp
Chris Philp

Lottery-backed grant-makers should consider using their reserves to protect charities from inflation, a minister has told MPs.

Chris Philp, the lotteries minister, was answering questions from MPs on the Digital, Culture, Media & Sport Committee this morning.

Asked about the impact of inflation on the latest arrangements for distributing funding from National Lottery sales, Philp said the latest licence for running the lottery is “designed to give higher returns to good causes than was the case previously”.

He said: “The grant-giving bodies [that receive lottery funds] do have quite significant reserves, which are designed to cover future disbursements.

“There is a certain amount of flexibility, [so that] if next year or the year after the people bidding for money say that they need more for a particular project because their costs have gone up, there are levels of reserves that are available to cover that.”

The minister also said that, in the event that the outgoing lottery operator Camelot won damages over losing the latest licence, the money to pay those damages could come from funds that would otherwise have been awarded to charities.

Camelot said it was seeking damages after losing the licence to the Czech firm Allwyn for 10 years from 2024.

In an earlier session, MPs heard that Camelot could try to claim as much as £600m.

Philp said he was very disappointed that Camelot was pursuing litigation and stressed that the issue had not yet been discussed by the courts.

He added that awarding future damages from the National Lottery Distribution Fund was “one of several ways” to find the money if it became necessary.

The final decision for where to find any funds would be made by the Treasury, Philp said.

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