Taking a gamble

Alistair Brown, 12.12.2017
HLF changes will have a big impact on the sector
If you’ve played the Lotto recently, you’ll be familiar with the feeling of having faint hopes dashed. The chances of your numbers coming up are now an infinitesimally small one-in-45 million, after lottery operator Camelot changed the rules of the game. Increasingly, punters who are feeling the pinch are asking: why bother with the Lotto?

Unfortunately, as Britain falls out of love with the national lottery, that same feeling of disappointment may become more common for the good causes that benefit from lottery cash. As Camelot suffered an 8.8% fall in lottery income in the last year, it has in turn distributed 14.4% less lottery money to good causes.

We’ve already seen some evidence of how this is impacting the culture sector, with Arts Council England’s decision in August to draw on £20m of reserves to cover a lottery shortfall.

But that’s nothing compared to the big changes that are taking place at the Heritage Lottery Fund (HLF). At the end of November, it announced a huge reduction in grant-making for 2018-19.

This year, HLF is distributing £305m in grants to heritage projects across the UK, but next year the total will be £190m, a 37% decrease. As a result, HLF has announced that it will not to make any major grants (over £5m) in 2019 and is also pausing several other grant strands.

This news will come as a blow to many in the sector. Since the lottery began in 1994, museums have been a huge beneficiary of lottery funds, and their importance for projects large and small has increased in a time of austerity.

HLF funds often act as a lifeline, helping to keep some local authorities on board with the idea of cultural funding at a time when they are under pressure to make drastic cuts. One museum director recently told me that without their HLF project, several of their town’s museums would undoubtedly have faced closure.

To my mind, there are a couple of possible ways to deal with this problem. Part of the solution might lie in increasing the proportion of funds from some of Camelot’s other lottery products that go to good causes. At present, 28% of each Lotto ticket but only 10% of scratch-card sales goes to good causes.

And while Lotto sales have decreased, Camelot’s profit from its lottery games has increased, so there is undoubtedly room for greater giving. Whether this happens lies in the hands of the Gambling Commission, which will shortly begin the tender process for a new lottery operator from 2023.

HLF also has a role in choosing the types of projects to fund. Next year it will draw up a new funding framework, with a major consultation opening in January. The recent Mendoza Review of Museums in England asked HLF to prioritise existing cultural infrastructure, rather than fund brand new projects, and to fund projects that increase the long-term sustainability and impact of museums.

That could mean funding for shared infrastructure to cope with back-of-house storage issues, and projects that demonstrate real social impact. It should also mean a greater proportion of HLF funding being spent outside of London, despite falling total revenue.

If HLF get this right, it may be able to cut its coat according to its cloth and ensure that lottery funding to museums and heritage is still seen as a force for good. That’s surely worth a punt.