National Lottery ‘lost up to £6m’ though fraudulent applications

Fraudsters may have acquired up to £3.4m more National Lottery ‘good causes’ money than was earlier thought, bringing the total to £6m.

In addition to the £2.6m from the Awards for All programme that has been under investigation since 2004, it has now emerged that a further £3.4m from the Community Fund might have been obtained through fraudulent means. The figures came to light when Sir John Bourn, head of the National Audit Office, reported an amendment to the accounts of the Community Fund for 2004/05 to Parliament last week.

Tessa Jowell, Secretary of State for Culture, Media and Sport, announced in the summer that 20 people had been arrested in connection with the Awards for All fraud. A spokesman for the Big Lottery Fund said this week: “It’s not right to say that it’s the same people who are behind the Community Fund fraud – it’s the same inadequacies in the system. There weren’t adequate checks to stop more than one application being made by the same person.” The Big Lottery Fund has responded by stepping up its security regime for grant applications, including additional identity checks.

Stephen Dunmore, chief executive of the Big Lottery Fund, said: “ This may be the first time this kind of systematic abuse has been found to be targeting organisations such as ours that fund charities. Although no system is foolproof against determined criminal activity, the measures we speedily put in place will detect any potential criminality at an early stage without imposing unreasonable burdens on the thousands of small organisations making genuine applications.”

Awards for All, the cross-distributor small grants scheme previously administered by the Community Fund, was set up to provide community groups with rapid access to small awards of up to £5,000, due to increase to £10,000 next year.

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