Can the sector afford the Olympics?

The latest raid on lottery funds to pay for the London 2012 Olympics will cost voluntary groups £250m. Can the sector be certain that more cash intended for good causes won't be used to pay for the games?

A view of London from the Olympics site
A view of London from the Olympics site

If there are winners, there have to be losers. Safeguarding the voluntary sector's Big Lottery Fund grant stream from the ravenous demands of the 2012 Olympics meant that hungry eyes simply looked around for alternative prey.

The deal struck in March, apparently after the intervention of Ed Miliband, minister for the third sector, means that of the £675m to be diverted to the games from the National Lottery, £425m will come from BLF grants to statutory agencies and £250m will be taken from other lottery distributors.

Community groups and environmental, health and anti-poverty charities breathed a sigh of relief, but arts, heritage and voluntary sports bodies flinched.

The latest raid means that from 2009 to 2012 lottery funding for heritage will be reduced by £90m, for sport by £70m and for the arts by £89m. And there are fears that, despite assurances from Tessa Jowell, Secretary of State for Culture, Media and Sport, the sector's funding from the BLF could still be diminished by the Olympics raid.

According to Robin Simpson, chief executive of umbrella body the Voluntary Arts Network, funding for arts organisations will be cut by more than a third. "The government has said that the reduction is only about 5 per cent of arts funding, which is mathematically true but misses the point, because the majority of arts funding goes to regularly funded institutions such as the Royal Opera House and the National Theatre," he says. The reduction will "curtail many potential projects and dissuade people from applying".

It could also endanger the flagship Cultural Olympiad, a nationwide cultural festival that will precede the 2012 games. Voluntary arts organisations are expected to play a vital role in catalysing community involvement, but there is no extra funding. Instead they will have to rely on the ever-decreasing pot of lottery funding.

Simpson wants the Government to release money from the Legacy Trust Fund, a lottery-funded project to support cultural and sporting engagement in the run-up to the games. Jowell has said that 70 per cent of its expenditure can go to cultural projects. "But that is just £28m out of £40m, compared with the £80m we are losing because of the lottery cuts," says Simpson.

Heritage and sports groups tell a similar tale of the futility of paying for the games at the expense of projects that benefit the wider community. "The games were won on the basis that they would deliver a legacy of participation," says a spokesman for the Central Council of Physical Recreation, which represents voluntary sports organisations. "Each pound diverted from grass-roots sport and used to build an Olympic stadium is a step away from achieving that legacy. It's robbing Peter to pay Paul. There is no way someone in Lancashire who doesn't have a 50-metre swimming pool in their area will go down to Stratford to use one."

There is also a sense of resentment among organisations that seem to have been relegated to the periphery of the voluntary sector and are seen as more expendable than counterparts working on, for example, healthy eating projects for schools. "There is a point here about how the Government accepted the need to protect voluntary and community organisations that get grants from the BLF, but didn't realise there are voluntary organisations in arts, sports and heritage, or chose to ignore that," says Simpson. "The Government needs to realise that the sector doesn't comprise only those who get money from the BLF, and that there are organisations in sports, arts and heritage providing the same kind of community benefits and social outcomes."

Many MPs have condemned the raid. Shadow charities minister Greg Clark told a Westminster Hall debate last week that the failure of the Office of the Third Sector to protect the voluntary sector was "disgraceful" and "a great betrayal". Pete Moorey, parliamentary and media manager at the NCVO, says: "If Parliament decided that it didn't want this diversion to happen, it could stop it."

A final decision will be made by October, but there is a mood of resignation among the groups affected. "We're pushing for a vote on the floor of the house, not in committee, so that the issues can be aired," says Simpson. "But we're not holding out a lot of hope that the decision will be reversed."

There are, nevertheless, other issues where the outcome is far from certain. One is the question of whether the money diverted to the Olympics will be given back to the lottery when the games are over. "There is the intention that, once the Olympics have finished, there will be money going back to the lottery," says a spokeswoman for the Department for Culture, Media and Sport. How much that will be is dependent on the sale of land after 2012.

Then there is the fear that this will all happen again. "When Tessa Jowell announced the revised budget, she was confident it would suffice," says the DCMS spokeswoman. "We have no reason to believe there will be a need to make any further call on the National Lottery."

That is some way from the cast-iron guarantee the NCVO wants that lottery cash will not be touched again. With 2012 five years away and a second lottery raid to pay for spiralling costs fresh in the memory, it is not only hardened cynics who wonder if we'll be here again in a few years.

No, it can't, says Rob Burlison

I'm sure Britain will have a fantastic time when the 2012 Olympic Games are held in London, but the repercussions of funding cuts to pay for it are detrimental to the lives of many, and the legacy that the games will leave is a worrying prospect.

The general secretary of Olympic utilisation in Greece was quoted at the end of April discussing the way he thought the Olympics should be funded. "If you give the private sector the right structure to invest in the games, then you don't have to make a plan for the post-Olympic period because it is already there," he said. Our Government has yet to attain sufficient private sector funding because it has not presented the games as a sound, attractive, economical project. This is largely because of a lack of leadership.

The Cabinet Office recognises this problem and has appointed a new director-general for leadership. So far, however, no clear decisions have been made in the area of cultural and sporting activities for all, even though making sport accessible for all is the key aim of the Department for Culture, Media and Sport. Maximising participation is strongly recommended by the DCMS select committee, but no structured plan has been published.

The Treasury and MPs should not be able to dictate how National Lottery money is spent. The argument that brought the lottery into existence was that it would help to improve the quality of life for all. Government should not be able to use lottery funds to fill gaping financial holes for the 2012 Olympics. The lottery is there to stimulate participation in arts and sports activities.

When the Royal Commission on Gambling first proposed a lottery, it suggested that the funds should be distributed in the form of a charitable foundation, free from the clutches of the Treasury and with the clear aim of increasing participation in cultural and sporting activities. Any money taken away from the lottery to fund the Olympics will largely harm small, local, innovative organisations and individuals, the very type of artistic activity we need to encourage in this country if we want to see arts for all materialise. Investing this money in land or property development does not help the arts.

A Cultural Olympiad, described by the DCMS as "a four-year period of cultural activity designed to celebrate the Olympic spirit throughout the UK", is due to take place once the 2008 Beijing Olympics have finished. Will this lead to a sustained increase in artistic participation? Previous Olympic evidence suggests not.

An Olympic Legacy Trust is being formed with the intention of investing in grass-roots sport and arts - the very area from which money has been taken to help pay for the games. The DCMS select committee states clearly that the legacy must begin immediately after the games have finished, but the Government's refusal to listen to alternative strategies has angered many, particularly when investing lottery cash in arts and sports through economic multipliers would actually increase funds coming into the Treasury.

The Olympic Games is for elite athletes, and the money spent on infrastructure is primarily for elite athletes. The games are not "sport and arts for all". Urgent action is required for there to be a real Olympic legacy and to allow the DCMS to achieve the goals set out in its new Transformation Action Plan. The National Lottery distribution system needs a complete and independent restructure to attain efficiency quickly and to change the quality of all our lives.

- Rob Burlison is campaign director at the Council for the Advancement of Arts, Recreation and Education.

Yes, it can, says Richard Caborn

The London 2012 Olympic and Paralympic Games will be the biggest and most exciting event the UK has ever seen.

Watching the world's greatest sporting superstars battle it out for Olympic gold against a backdrop of some of our most iconic landmarks will inspire a generation of youngsters to get active and take up sport. It will provide a legacy of world-class facilities for the whole country to use, regenerate one of the most deprived areas in the country, boost our tourism industry and give us the opportunity to showcase our cultural talents. These are exactly the sorts of benefits the National Lottery was set up to achieve.

That's why the Government has made it clear from the start that the lottery would form a key part of the funding package for the games.

The money from the lottery will join the substantial contributions being made by central government and the Mayor of London. The lottery will contribute £2.2bn to the overall funding package of £9.3bn. This will be made up of £750m from dedicated Olympic National Lottery Games, £1.1bn from lottery distributors and an additional £340m from the Sports Lottery Fund that will go directly towards funding grass-roots and community sport.

But let's not lose sight of the bigger picture: this leaves more than £5.4bn going to other lottery good causes over the next five years, on top of exchequer funding.

We believe the decision to contribute an additional £675m from the lottery is the right one to make, but it has not been taken lightly. We make this promise: no existing lottery project need be affected, and we are confident the benefits will more than match the costs.

We have worked particularly closely with the Big Lottery Fund to strike the right balance. Both the Government and the fund recognise the vital role that the BLF has in supporting the UK's voluntary sector.

Volunteers and community groups help transform peoples' lives. That is why, given their special nature, we ensured the BLF could contribute to the Olympics while safeguarding its grants to the sector. We will also put in place profit-sharing arrangements to enable the lottery to benefit from the returns on the investment we are making in the Olympic Park.

The event is a once-in-a-lifetime opportunity for this country. It has the potential to leave a lasting legacy for volunteering in the UK, with 70,000 volunteers needed to help it run smoothly. Volunteering will be integral to the success of the Olympics.

Beyond the sporting events, the Cultural Olympiad will see multicultural celebrations in every community. Live music, dance and comedy will be held at prime locations in front of huge audiences, showcasing the talent of our artists and our rich heritage. It is therefore absolutely right that the grass-roots sport bodies, arts and heritage distributors contribute to the games.

The Olympics will showcase everything that is great about the UK. Far from being seen as a threat, it is something we must all embrace.

- Richard Caborn is the minister for sport.

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