Olympic ideal?

Jonny Wilkinson’s last-minute drop goal to clinch the rugby
World Cup 2003 for England kick-started a resurgence of national
pride in sport. So it is no surprise that a government public
opinion poll showed that 81 per cent were behind London’s bid to
host the 2012 Olympics.

According to the British Olympic Association, there are multiple
benefits for the UK if London wins the bid. It claims that it will
increase participation in sport and lead to a healthier society
with less youth crime. The association also believes the games
would be a “driving force” for social inclusion, breaking down
divisions over age, gender, race or religion – this would be
reinforced by the Paralympics. A successful bid would also
regenerate east London, creating thousands of new jobs.

The bid itself is projected to cost £30m with a maximum public
investment of £16m; the rest will come from private
sponsorship. The winner will be announced in July 2005 and, if
London wins, the government foresees that the national lottery will
contribute up to £1.5bn towards the estimated £2.375bn
cost of staging the games.

It is expected that some £750m of this will be raised through
new Olympic lottery games. To this end, the government introduced
the Horserace Betting and Olympic Lottery Bill in parliament last
December. The bill establishes the principle of the new lottery
games and provides powers to set up an Olympic lottery distribution

But many in the voluntary and community sector are concerned about
the ability of the new Olympic lottery games to raise this kind of
money. Ticket sales on the national lottery itself have been down
for some time. From every £1 lottery ticket, 28p goes to good
causes with more than £15bn distributed to date. But the new
games could well make a dent in the sale of current games – which
in turn will reduce the money going to existing good causes.

And it seems these fears are not without foundation. The regulatory
impact assessment for the Olympic Lottery Bill suggests that 59 per
cent of the £750m over the seven-year lifespan (2005-12) might
come from sales diversion from existing lottery games to the new
games. Based on 2005-6 income forecasts, this represents an average
annual reduction to good causes of £64m.

James Georgalakis, media and campaigns officer at the National
Council for Voluntary Organisations, says: “We are quite sure that
the pot of money from which charities and voluntary organisations
apply for grants will shrink as a direct result of this approach to
funding the Olympics.”

Despite this, the bill went through the House of Commons
unchallenged. However, when it appeared in the House of Lords at
the beginning of this month it met with a frosty reaction. During
the Lords debate, Lord Judd said: “It seems highly probable that
such new [national lottery] games will eat into sales of other
games, thereby reducing returns to the existing good causes.”

Georgalakis adds: “The government will have to concede that it got
this wrong and it needs to look at amending the bill. The Olympics
is an emotive issue and has blinded MPs to what the impact might
be. In everyone’s enthusiasm for the Olympics, an inappropriate way
of funding it, which could have serious implications for voluntary
groups, could go through.”

Concern over good causes funding and the lottery began last summer
when the government published its national lottery funding white
paper. It detailed the controversial decision to merge the
lottery’s Community Fund – which supports voluntary groups and less
popular causes – with the New Opportunities Fund – which awards
grants in line with government priorities. This led to fears that
more money would end up going to the government’s pet projects,
such as the Olympic bid.

The bill has only fuelled the fears. The remaining £750m to
come from the lottery will consist of £340m from the existing
sports lottery budget and, if more money is needed, up to another
£410m will be found from other sources after 2009, when the
current lottery licence expires, says a spokesperson for the
Department for Culture, Media and Sport (DCMS).

“This could be by changing the shares passing to existing good
causes after 2009,” he says. In effect, this means moving money
from the national lottery distribution fund to the new Olympic
lottery distribution fund and will be achieved through proposals in
the bill which give the culture secretary powers to transfer funds
from one to the other.

The NCVO wants the culture secretary to be given powers to transfer
unclaimed national lottery money into the Olympic lottery fund
instead. At the end of 2003, unclaimed prizes were worth more than
£590m. But the DCMS spokesperson says there are no plans to
change what happens to unclaimed money – which is distributed to
existing good causes – arguing that the NCVO’s proposal would take
more money away from good causes.

Georgalakis disputes this: “Unclaimed money is additional to that
already in the pot. It is a bonus because good causes haven’t
factored it into their budgets, so it’s preferable that funding
that was never a certainty goes to the Olympics. That’s less
damaging than the culture secretary being able to raid money from
the national lottery distribution fund because of a shortfall in
funding. It sets a worrying precedent.”

Another suggestion to protect good causes’ funding is to use the 12
per cent tax taken by the government from every lottery ticket –
worth £549m a year. The NCVO wants this tax to be split
equally between being put back into the lottery prize fund for
mainstream games to encourage more participants with the promise of
more or bigger prizes and the other half to go to existing good
causes. This, it says, would go some way to protecting against the
impact of the Olympic bid.

Perhaps we should not be alarmist for the time being. None of this
will happen unless London wins the Olympic bid. Pat Samuel, team
leader of the voluntary and community sector unit at the Treasury,
says: “Although we certainly want to see the voluntary and
community sector’s share of the lottery safeguarded, this may not
happen at all.

“Overall we have to bear in mind that something like the Olympics
does provide quite a lot of volunteering opportunities for people,
so there is a bit of good news.”

But she admits that, if London does win the bid, the impact would
be serious as it would only add to voluntary groups’ insecure
funding. “The best-case scenario would be for voluntary
organisations not to be affected at all negatively. But we have to
be realistic and there probably is going to be some effect. We hope
it will be kept to a minimum.”

And the DCMS spokesperson concedes that there will be an impact on
good causes, but says “the boost that the Olympics will have on the
rest of the lottery will hopefully compensate this”.

He adds: “The games are going to have benefits far wider than just
sport and not just in London.”

But Georgalakis warns: “Almost every voluntary organisation that
currently benefits from lottery funding should be concerned. If
this happens it will be tougher for them to get the same funding

Voluntary organisations face constant insecurity around funding. It
is about time they were given a sporting chance.

– For more information see websites www.ncvo-vol.org.uk and www.olympics.org.uk 

When does it happen?

  • May 2004 – IOC announces the cities to go through to the final
  • November 2004 – All cities submit their full bid with details
    on security, funding, facilities, infrastructure, transport and
  • July 2005 – Winner announced in Singapore.

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