The lottery scandal is fund-raiding, not cronyism

A row has been brewing about the party political allegiances of the board members of the Big Lottery Fund, with shadow arts minister Ed Vaizey accusing Secretary of State for Culture, Media and Sport Tessa Jowell of packing the board with Labour 'cronies'. She has denied this hotly, and her spokesman has stated that appointments are made on merit, in accordance with the rules of the Office of the Commissioner for Public Appointments.

The issue should not, however, be about whether BLF board members have party political allegiances - provided, if they do, that it is clearly stated and the appointment is nevertheless made on merit. There is a different point. Wherever I go, the whispering is the same: lottery funds are likely to be raided to pay for the Olympics. And that is increasingly probable, given the games' soaring costs, the estimate for which has risen by £900m to £3.3bn. Part of that increase comes from a failure to budget for VAT costs.

What surprises me is that I am hearing only whispers. Where are the charities, the umbrella bodies such as the NCVO and the boards of the lottery funds themselves, shouting loud and clear that they do not think it is right for money for good causes to be raided beyond an amount originally agreed in the belief that holding the Olympics in London is in itself a good cause? Lottery fund directors and staff may find it a bit difficult to shout, but this should be a test of their boards and the sector as a whole.

If they are prepared to say they do not think it right, that the money is needed for small community groups that would find it hard to get money elsewhere, for projects involving disaffected youth for whom the same is true, and for projects involving thousands of unpaid, dedicated people doing good things around the country day in, day out, then they will be protecting the money for what it was raised for. If they are not prepared to do that, they should ask themselves whether they were tough enough in asking the Government questions about why their money was targeted.

The charities, especially the bigger ones, and the umbrella bodies ought to be doing the same and should not be fearful of retribution, because it is the Government that has a case to answer here. And everyone ought to be making a fuss over VAT. It seems more than a little mean-spirited of HM Revenue & Customs to raise VAT on the Olympics construction projects by raiding funds destined for voluntary sector good causes. Might we not hope that the Treasury, such a strong supporter of the voluntary sector, will step in and say that this is VAT too far?

Everyone wants the Olympics to be a success. But if good causes lose out to pay for them, support might dwindle - and that would be a crying shame when so many people are ready and eager to volunteer to help with the games. Come on, lottery fund board members, directors and trustees of charities and umbrella bodies - make a fuss. Get the Government to think again.

AND WHILE WE'RE ON THE SUBJECT ...

- Five of the 12 board members of the Big Lottery Fund belong to the Labour Party, including the chairman, Sir Clive Booth. There are no members of any other political party on the board. The trustees have been appointed until 2009 and have responsibility for distributing £630m of lottery money each year.

- When London was chosen to host the 2012 Olympics it was estimated that it would cost approximately £2.4bn to build the necessary infrastructure. In November that figure was revised up to £3.3bn, a rise of 40 per cent. Some critics have suggested that the overall regeneration, construction and administration costs could exceed £8bn.

- One reason why the costs have had to be recalculated is that it was originally assumed the preparations for the games would be exempt from VAT. This was the case for the the Sydney Olympics in 2000, but will not, it turns out, apply to the London games. EU rules mean an estimated VAT bill of £250m will have to be paid.

- The Government hopes to use the London Olympics as a springboard for regenerating east London's Lower Lea Valley. Culture secretary Tessa Jowell says the games will create 30,000 jobs and 40,000 homes for 100,000 people. Last month, Ken Livingstone said the cost of building these homes could rise from £1bn to £2.5bn.

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