What do the new National Lottery Community Fund policy directions mean?

Last month the government published new draft policy directions for the National Lottery Community Fund. The last time they were updated was 2012, and the considerable rewrite they’ve undergone is being proposed in response to BLF’s new strategy, published last year, and the change in government.

The directions are important because they define the scope of BLF’s work, ranging from light-touch expressions of ‘desirability’ to more concrete requirements of things BLF ‘needs to ensure’ or ‘take into account’.

In short, they tell us what BLF can fund, how they can fund it, and what they require of those that they fund – and these are set to change in some subtle but potentially significant ways.

NCVO will be responding to the consultation, and in this blog post we set out the main issues we’ve identified so far and will be seeking clarity on. We’d really value getting the sector’s views on these and any other aspects of the proposals, so if you have any thoughts, please do drop me a line.

Adding to additionality

The idea that lottery funding should not be used to replace or supplement government expenditure was fundamental to the debate surrounding the National Lottery’s creation and remains a core concept behind BLF’s role as a funder. It was the driving force behind our campaign during the November spending review to protect BLF funding from being raided, to make up for cuts elsewhere.

At the moment this concept is enshrined in principles that BLF must take into account – specifically that the funding it provides should ‘complement, add value and be distinct from’ other funders, including government – also known as the ‘additionality and complementarity principles’.

Complementarity was only added into the directions in 2012, to ensure that BLF was not prevented from funding issues or projects that other funders were involved in by the need to be ‘distinct’ (see some of the press at the time).

The new directions reword these important principles with a shift in emphasis towards working more closely on current government priorities. While BLF funding should continue to be ‘additional and distinct from’ government funding, the draft wording states it should now also complement and add value to it ‘in areas of mutual policy interest’.

There is no longer any mention of other funders (such as grant-making foundations) in the clause, which removes the original rationale for the complementarity principle (enabling BLF to fund similar projects as them). So functionally speaking, the expression of complementarity in the new directions exists solely to enable BLF to complement government funding.

This isn’t of itself a cause for concern – it’s right that BLF should be able to fund work in similar areas to government. However, the directions also leave the government scope to define what those areas of ‘mutual policy interest’ are – an opportunity it has very much taken in the new draft.

Multiplying priorities

Among other things, the directions set out the priorities for what BLF must fund (for England and the Isle of Man). These have in the past been phrased broadly around volunteering, social action and voluntary sector capacity so as to allow BLF latitude in its funding decisions. The addition of social investment to the list of priorities in 2012 was perhaps the most issue-specific direction BLF had ever been given.

This is set to change. While these priorities remain in the draft directions (albeit reworded), the new list of priorities has grown from the three fairly wide categories, to seven, often very specific ones.

Issues making the list this time around include:

• engaging young people in volunteering and supporting youth sector infrastructure
• ‘promoting fundamental British values that support integration and unite communities, helping them become more cohesive, inclusive and tolerant’
• strengthening life chances and social mobility with a focus on early years, and ‘complementing the government’s Life Chances Strategy’.

These evidently tie in unambiguously with key elements of government policy. The consultation stresses that it remains at BLF’s discretion how to balance funding across these priorities.

But it feels odd for a funder whose role is supposed to be distinct from government to have such specifically defined priorities that relate so closely to the government’s current agenda, to the extent of denoting a specific government programme.

In practice, the line between using funding to complement a piece of government spending, and effectively substituting it, is a grey one.

The draft directions seem to increase the risk that government could look to BLF as part of its work in the areas above with the expectation of funding – arguably in breach of the principle that BLF funding should not be used to replace government spending.

This isn’t to question the value of delivering any of the newly introduced priorities – but it would undoubtedly divert resources away from the core work BLF has always done.

Calling for clarity

This key point of principle aside, there’s much in the draft directions that has been reworded or the emphasis changed. Where this creates uncertainty, we’ll also be asking for clarity on the intention behind the changes to make sure BLF is able to continue its important work and provide funding on an accessible, proportionate basis.

Again, we would love to hear your views on the new directions – if anything jumps out at you, please don’t hesitate to get in touch.