I move amendment No. 1:
To delete all words after "That" and substitute the following:
"Dáil Éireann, acknowledging the contribution made by the National Lottery towards the funding of areas such as sport and other recreation, arts and culture, youth and welfare, notes:
(a) that over the period 1987-1996 allocations of National Lottery funds totalling approximately £700m have been made for the purposes approved under the National Lottery Act, 1986;
(b) that details of National Lottery allocations are contained in the annual Estimates Volumes and Appropriation Accounts; and
(c) that a National Lottery Review Group is currently examining the allocation of Lottery funds with a view to ensuring maximum transparency in the allocation of the Lottery surplus with particular reference to the allocations of financial support for voluntary (for example, sporting and community) agencies."
The national lottery recently celebrated ten years of successful operation. I welcome the opportunity for the House to consider some of the key issues related to the lottery. I have no hesitation in saying the national lottery has been a success.
Already it has provided over £700 million for activities such as sport and youth, arts and culture and has supported initiatives in favour of the health and welfare of the community. Without the existence of the national lottery, this funding would not have been possible. As with many successful developments, the benefits of the lottery today are quite different from what it was possible to envisage at the outset. There was general support for its establishment and this confidence has been vindicated.
Deputies may recall the origins of the lottery in the undertaking in 1984 in the Government White Paper — Building on Reality — which indicated the Government of the day was anxious, despite the financial situation at the time, that additional funding should be provided for sport. The Government decided a national lottery should be established, part of the proceeds of which would be allocated to the promotion of sport. The success of lotteries in other countries indicated substantial amounts could be raised from a national lottery here.
As I shall discuss later, it is the very success of the national lottery in generating funds for the beneficiary categories which has given rise, from time to time, to issues of controversy. As might be expected, demands for lottery funding consistently exceed the resources available and it is natural that those who apply and do not receive funding will be disappointed. This in itself should not be misconstrued as unfairness or mispropriety in the disbursement of lottery grants which are subject, in all respects, to similar controls as apply to public spending generally. Nonetheless, it is important the lottery's players and the public should have confidence in the methods by which funds are allocated and that there would be maximum transparency.
To this end the Government has appointed a national lottery review group with an independent chairperson and two other independent members as well as representatives of the main Government Departments which administer lottery funding. The chairperson is Mr. Niall Greene and the other two independent members of the group are Mr. Richard Burrows of Irish Distillers and Dr. Kathleen Lynch of UCD. The group is expected to submit its report to the Minister for Finance shortly.
It is clear public trust and confidence are of paramount importance to the operation of a national lottery. The National Lottery Act, 1986, contains comprehensive provisions to protect the public interest and secure the integrity of the national lottery on behalf of the players. The experience of the past ten years demonstrates the national lottery has been operated by the national lottery company, a subsidiary company of An Post, with absolute integrity and has continually maintained the confidence of all. There has always been justifiable concern regarding the purposes to which the lottery surpluses might be applied. The allocation of the lottery surplus is a matter for Government, subject to the provisions of the National Lottery Act 1986. The surplus represents about 33p in every pound spent by the players.
In the course of the passage of the National Lottery Bill through the Oireachtas in 1986, the Oireachtas approved the decision to provide specifically for the qualifying categories while including provision for additional purposes should Government so decide. Section 5 of the National Lottery Act, 1986, provides for the use of the proceeds of the lottery for:
the purposes of such one or more of the following, and in such amounts, as the Government may determine from time to time, that is to say, sport and other recreation, national culture (including the Irish language), the arts (within the meaning of the Arts Act, 1951) and the health of the community, and such (if any) other purposes, and in such amounts, as the Government may determine from time to time.
When lottery sales spectacularly exceeded original expectations, the following were added to the original list of qualifying categories: youth, welfare, national heritage and amenities. The Government also approved the allocation of lottery moneys, on a once-off basis, to the Dublin Millennium in 1988 and EXPO '92. It should be clear therefore that lottery moneys may only be used for the stated purposes. It should be appreciated, however, that lottery funding, as decided by successive Governments, exists side by side in many cases with general Government funding, for example, in the case of publicly funded initiatives supporting the health and welfare of the community.
To acknowledge this fact is not to deny the vocation of the lottery to provide additional funds for specific purposes. It is a recognition that when the lottery surplus was many times greater than originally envisaged, successive Governments have naturally had to establish priorities for lottery funding in the context of overall public and social expenditure priorities. One of those Governments included the Progressive Democrats.It is also the case that, but for the lottery, it would not have been possible to maintain funding for many discretionary grant schemes. Moreover, many lottery funded schemes have secured increased allocations which compared favourably with the general trend of public expenditures.
From the outset, the proceeds of the national lottery considerably exceeded expectations. I will briefly outline the main developments which indicate the growth of the national lottery over the past ten years. In 1987, the first year of operations — when the National Lottery Company was selling scratch cards only — sales amounted to £102.4 million, compared with an estimate of just £22.5 million included in the 1987 budget, that is, nearly five times as much as estimated.
In the following year — April 1988 — the lotto game was introduced with one draw each week on Saturday nights. It was originally based on a 36 number matrix and was an immediate success. By 1990, lotto sales had outgrown the sale of instant tickets. In May 1990, a second lotto draw, the midweek draw, was introduced on Wednesday nights. The lotto matrix was increased from 36 numbers to 39 in August 1992 and to 42 in September 1994. In 1996, the turnover of the national lottery amounted to almost £308 million per annum, of which approximately two-thirds were lotto sales and one-third instant ticket sales. A sum of £101 million, which corresponds to about one-third of all sales, was contributed to the national lottery fund for distribution to the beneficiary fund. Sales have steadily grown, but the spectacularly rapid increases of the early days are unlikely to be repeated. Spending on lottery products is tending to even out at about 0.7 per cent of personal consumer spending.
The national lottery has been a highly successful generator of funding for a wide range of projects in sectors such as sports, youth, arts and culture, and the health of the community. In this way there is a tangible return to the community. The benefits have been spread from national organisations catering, for example, for youth and sport or for the arts, to community and voluntary bodies at local level. The common denominator in all lottery funding has been a valuable contribution to a deserving cause, an injection of funding made possible by the success of the lottery. I will briefly outline some of the main schemes shortly.
It was decided in 1990 that allocations of lottery funding should be shown in specially designated national lottery subheads under the relevant Votes in the annual Estimates publications. This was intended to provide a clear presentation of the relevant allocations in the context of public expenditure provisions. A table showing all the subheads in the Estimates which include national lottery funded projects, together with the actual amounts provided in the subheads, is included as an appendix to the Estimates volume, thus bringing the lottery funded items together in a single place for information. The amounts are also shown in the Estimates for the various Departments concerned. If an activity is financed both from the lottery and from Exchequer revenue, there are two separate subheads in the relevant Estimate to make this clear.
While the Minister for Finance has overall responsibility for the operation of the national lottery, in accordance with the National Lottery Act, 1986, the Government decides the lottery allocations. In practice, these decisions are taken in the context of decisions on the annual Estimates.Each Minister is answerable to the Dáil for lottery funded expenditure within his or her functional area. Lottery funding for youth and sport, for example, is administered by the Minister for Education. In practice, the Government considers provisions for lottery funded subheads during the annual Estimates process in the same way as it considers the spending Estimates generally.Spending Departments propose how much should be allocated to lottery aided subheads and the Government makes reductions if the amounts sought exceed the available resources.
When departmental allocations under the subheads have been settled by Government, it becomes largely a matter for the spending Departments to allocate the funds within the approved subhead provision among individual projects or schemes in accordance with the terms of those schemes. Lottery funding is limited to the designated categories as opposed to being available for general Government spending purposes.This is entirely in line with the approach taken when the lottery was being established. However, the allocations policy which evolved under successive Governments allowed a somewhat wider application of the lottery surplus than might originally have been envisaged in so far as, soon after 1989, the lottery sales had so greatly exceeded the initial estimates that the funds available to the Exchequer as a result were very much greater than when the initial policy decisions were taken.
There was a major retrenchment in public spending during the late 1980s. To ease the impact of the reductions in public spending, certain items were transferred to lottery funding. This helped to cushion the impact of the reductions in public spending, while nonetheless allowing additional spending at a considerably higher level than was envisaged when the lottery was introduced.
There have been various reports into the operation of the national lottery and the distribution of the surplus. It is interesting to look briefly at some of the main findings in so far as they can contribute to better understanding of the main issues in lottery funding. I will refer first to the report of the all party working group of 1988-89. The group's main recommendation was that the allocation of funds among the eligible categories should continue to be determined by the Government.This position has been maintained by successive Administrations, including the one in which the Progressive Democrats participated, on the grounds that this framework is evidently the most suitable and contributes to the greatest degree of parliamentary accountability. I will return to the independent board later. The all — party group also recommended that lottery funds should not be used to substitute for funding previously provided from normal Exchequer sources to finance core programmes which are the responsibility of Government Departments. This recommendation was not accepted by the Government.
The Oireachtas Joint Committee on Commercial State-sponsored Bodies inquired into the National Lottery Company in 1990. While the joint committee was primarily concerned with the commercial operations of the National Lottery Company, it made suggestions for improved public information regarding the many uses to which lottery surpluses are directed. This is a practical issue on which considerable progress has been made in recent years and to which the present Government is strongly committed.
The joint committee considered that the existing range of beneficiary categories was sufficiently broad and recommended against any widening of the list which would result in spreading the level of support too thinly and losing the impact of the fund. Some members of the joint committee expressed concern about the adverse publicity which surrounded some decisions on the disbursement of moneys from the lottery. It recommended that more information be published on projects assisted from the lottery and the publication of clearer information for the benefit of applicants on application procedures. The committee recommended continuous monitoring of the social impact of the lottery.
Arising from its examination of the 1991 appropriation accounts, the Committee of Public Accounts requested the Comptroller and Auditor General to undertake a detailed examination of the arrangements for the administration of lottery grants. This examination made a number of general recommendations aimed at ensuring a transparent and equitable system. While the investigation indicated some shortcomings in adherence to standard procedures, it did not find any evidence of impropriety in the administration of grants in any of the Departments concerned.
The Committee of Public Accounts made recommendations aimed at ensuring as far as possible that there were standard application forms, clear criteria for making grants and adequate procedures for follow-up to ensure the funds were spent as intended. The detailed recommendations included the following in relation to the applications and decision-making process for lottery grants: there should be a standard application form for lottery grants which, apart from the normal details, as a minimum sets out the purpose for which the grant is being sought, the number of people who benefit from the work of the organisation seeking the grant and the sources of the organisation's funding, separately identifying sources of State funding to prevent possible overlap or duplication; there should be a structured process to ensure objectivity in evaluating competing applications for funding by reference to agreed predetermined criteria; the recommendations of the line section in the Department should clearly show the justification for the grant and its amount.
Following the Public Accounts Committee report, the Department of Finance issued a revised, updated and consolidated circular to Departments covering all aspects of administration of national lottery grants. The guidelines were designed to ensure that clear criteria apply for each discretionary scheme, that all interested persons will have due opportunity to apply for the funding available and that all applications are treated on an equal footing.
Monitoring to ensure the funds have been used for the purpose approved is an important feature in all lottery funding. This is particularly so where funds are issued to an organisation which may not have had much experience in handling public funds. In practice, all lottery funded spending, as allocated by Government, is authorised by the relevant Minister for services operated under the aegis of their Departments, including, in many cases, voluntary and community groups. All these areas such as eligibility criteria, method of submitting applications and availability of information are being investigated by the National Lottery Review Group.
The main lottery funded schemes under the Department of Arts, Culture and the Gaeltacht are the grant-in-aid funds for Bord na Gaeilge, Ciste na Gaeilge, the Heritage Council and An Chomhairle Ealaion, the Arts Council. Up to the end of 1996, £171 million had been provided for projects in the categories of arts, culture and the national heritage.
Lottery funding for youth in sport is administered by the Minister for Education. Full details of grant-in-aid from lottery funds to help support and promote the development of sport are given in the Department of Education's annual report Sport in Ireland which acknowledges the substantial sports funding made possible by the sustained success of the lottery. Grants are paid to the national governing bodies of sport to assist with costs of administration, coaching, specialist equipment, athlete support, increasing participation and raising standards. Capital grants are paid towards the provision of sport and community recreational activities, comprising the major facilities scheme and the recreational facilities scheme.
In the youth area, there are a number of schemes at national level to support the operations of recognised voluntary youth work organisations and at local level, mainly through vocational education committees and youth organisations, to support information services and special projects for disadvantaged young people. The allocation in the current year for youth and sport and recreation and amenities amounts to almost £30 million. Approximately £232 million was provided during the period 1987-96.
Lottery funding for recreational facilities development is administered by the Department of the Environment for the provision of swimming pools and libraries. The 1997 allocations amount to £3.5 million for swimming pools and £2.68 million for libraries. In support of developments in social housing, lottery funds make a valuable contribution through the scheme for the installation of communal facilities in voluntary housing for which just over £1 million is provided in 1997.
Under the Department of Health, grants are paid to voluntary organisations or groups under the respite care grant scheme and the national lottery grant scheme for community-based projects under the headings of mental and physical handicap, the elderly, psychiatric services, child care services, women's refuges and personal social services, including information and counselling services. The balance of national lottery funds allocated to the Department of Health fund ongoing services and the capital programme.
The Department of Social Welfare operates a mix of once-off grant schemes and programmes of support for community and voluntary activity. Details of all schemes are set out in the Department's information booklet SW85. There is also a separate leaflet on the community development programme, CDP.
Lottery funded schemes focus on the most disadvantaged groups and communities. To be eligible, groups must subscribe to a self-help, community development ethos and involve intended beneficiaries in management and design of the project. In my own part of the country, community and voluntary groups which do worthwhile work such as South West Wexford Community Development Association, the Coolcotts Community Development Programme, the Windmill Therapeutic Training Unit, Piercetown and the New Ross Community Hospital all benefited from lottery funding in 1996. The community has also benefited from allocations to the Ferrybank swimming pool and the libraries in Wexford and Enniscorthy.
As is clear from the above description, the benefits of the national lottery reach into many areas of the community. There have been calls from time to time for the provision of detailed information on lottery grants in a single volume. At the end of 1996, my Department, with the assistance of the other Departments involved, produced a compendium of national lottery grants, a copy of which was sent to each Deputy. It provides a comprehensive listing of lottery funding and grants. So far, it covers the period 1987-94. Information in relation to 1995 will be published shortly. Information in relation to 1996 will be published as soon as possible following publication of the 1996 Appropriation Accounts.
Wearing my other hat on behalf of public service customers, while the compendium contains all the details and all funding is accounted for, it is not user friendly. If one is looking for specific information, it is difficult to trace it quickly. It is a question of layout more than anything else. The design and layout could be improved. While there is no question of lack of transparency in spending lottery funds, it is not idiot proof, if one is looking for specific information in a hurry. I make this point to be objective. In rebutting criticisms from the Opposition by way of the amendment, I am personally not satisfied that the compendium is user friendly, although I applaud the concept. It should perhaps be redesigned to make it easier to find what one is looking for.
There have been suggestions from time to time that it would be preferable to have an independent board which would be charged with deciding the distribution of the lottery surplus. The case generally made for such an arrangement is that it would be free from political interference. It is also argued that an independent board would facilitate achievement of openness and transparency in lottery funded expenditure. While the concept of an independent board may appear attractive, it would be naive to consider that such a board would find a magic formula to reconcile demand for and availability of lottery funding. There will always be criticism and cribs as long as all applicants cannot be satisfied. That will always be the case. Experience in other jurisdictions shows that taking the decision out of the Government arena is no guarantee that disputes and controversies will be avoided. It is imperative that spending on beneficiary programmes should conform to the highest possible standards of public accountability and transparency. The Government is firmly committed to this principle.
Ministers and the Government await with interest the outcome of the deliberations of the National Lottery Review Group and will give its recommendations the fullest consideration when its report is received.
