Lottery Fund spends millions on itself
The organisation which distributes hundreds of millions of pounds from the National Lottery to good causes spends more than £10 in every £100 raised on itself.
By Jason Lewis, Investigations Editor 9:00PM GMT 19 Feb 2011
The Big Lottery Fund pays £71 million on running costs and wages for 988 staff in 13 offices around the UK. It has one staff member for every 28 grant applications it receives each year.
The Fund has previously been criticised for awarding grants to politically correct causes, at the expense of more mainstream projects.
An investigation into its running costs by The Sunday Telegraph has also found high levels of questionable expenditure by the organisation, which has twice as many employees as the Department of Culture, Media and Sport, which oversees it.
The Fund's running costs come directly from the £568 million it gets from the Lottery to support good causes. But before it gives a penny away, the distributor pays its staff salaries of £37.5 million – an average of nearly £38,000-a-year – and it spends another £9 million on offices.
Millions more are spent on management consultants, media training and airline tickets for staff.
The Fund, which receives 28,000 requests for grants each year and rejects more than half, once turned down the Samaritans, claiming the group offered too little help for asylum seekers, ethnic minorities and the disadvantaged. But it did fund:
– a pressure group for 'sex workers' which campaigns to legalise prostitution and brothels,
– a project to fund "shooting galleries" where heroin addicts can take drugs under medical supervision,
– a Jamaican-born poet who was paid to spend a year on the island in search of inspiration
The Fund is now set to oversee the Big Society Bank, which will siphon off up to £400 million from dormant bank accounts to pay for the Prime Minister's idea for volunteer schemes to run post offices, libraries and transport services.
Despite employing one staff member for every 28 applications, the organisation also spends millions on consultants to assess its projects. In the last nine months it paid "social regeneration" experts Hall Aitken almost £1.6 million.
It also spent £1.2 million in the last nine months on consultants developing a scheme to do away with its paper-based grant payment system. The scheme will eventually cost £13 million but has been beset by problems.
The Fund's chief executive Peter Wanless is a former Treasury civil servant where he once worked alongside a young David Cameron.
He was also private secretary to John Major, when he was Chief Secretary to the Treasury, and later worked for Labour Ministers including Ruth Kelly and David Blunkett.
Mr Wanless now earns up to £145,000-a-year, slightly more than the Prime Minister.
He is a regular user of the Twitter website. In one message, he reported an encounter with Coldplay singer Chris Martin at a Lottery event. Alongside a mobile phone shot of the two of them, he wrote: "Chris Martin said he thought I had a brilliant job. I agreed it was almost as good as being a rock star."
His more than 3,500 posts on the site so far include details of the Fund's work, plus insight into the lives of his wife and young son.
Last year Mr Wanless ran up £9,357 in expenses travelling between his Greenwich home, the Fund's offices in London and other bases in Cambridge, Belfast, Glasgow, Cardiff and Newcastle upon Tyne.
His travel claims were far outstripped by those of other senior executives, four of whom earn more than £90,000-a-year.
[...]
Last night the Government said it had ordered the Big Lottery Fund to cut its overheads to under five per cent of its income from the lottery, which itself is to be cut by almost ten per cent.
This figure, Ministers say, is more in line with the spending of the charities it is funding and means it has two years to cut its outgoings by around £42.6 million.
Lottery Minister John Penrose said: "For too long Labour allowed lottery distributors to spend millions of pounds of lottery good cause money on excessive administration costs.
"The coalition Government has asked the Big Lottery Fund and other lottery distributors to reduce their running costs so as much money as possible goes to the arts, sport, heritage, and charities.
"This way, everyone who buys a ticket will know the good causes are getting the best possible value for money."
The Big Lottery Fund said its staff salary levels reflected that employees were graduates who did not do "routine clerical jobs but require skill and judgement" issuing around ? grants and managing 26,000 ongoing projects worth around £1.4 billion.
It said its lottery distribution costs were £58 million, it had reduced its spending on its offices to £7 million a year and that total office costs of £7,000 per employee were "not excessive".
It added that it was moving 350 jobs from London and the South East to save money.
A spokesman said: "Every one of the awards we make – and the decisions we make in choosing to fund certain projects rather than others – is subject to potentially intensive public scrutiny. We have been praised for our effectiveness.
"The Government's expectation that we reduce our core administrative costs to five per cent is challenging.
"We intend to deliver it through efficiency improvements and reduction in expenditure, without materially affecting the size or quality of the grant programmes we deliver."
http://www.telegraph.co.uk/news/uknews/ ... tself.html
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