The government consultation on new policy directions for the National Lottery Community Fund is about to close. I previously covered our initial concerns about the proposals, which set out new rules for what BLF should fund and how.
BLF’s role as a high-volume grant maker of predominantly small awards (under £10,000) is increasingly rare and valuable, and it’s crucial that it retains the ability to continue funding voluntary and community organisations in a flexible and responsive way. On further reflection, it’s become clear that the cumulative effects of various changes to the directions would create an unprecedented level of alignment between the funding priorities of BLF and those of government.
Alignment with government priorities
In our response (PDF, 450KB) to the consultation, we identify three ways that the proposed directions focus BLF on working increasingly closely on government priorities:
- By rephrasing the clause that sets out how BLF’s funding should be distinct from that of other funders, and placing far greater emphasis on complementing government funding.
- By directing BLF to fund some very specific policy priorities that align closely with identifiable elements of the government’s agenda.
- By requiring BLF to work with other stakeholders regardless of whether this helps further BLF’s strategic aims or where it will produce better outcomes.
I won’t go into the detail of the drafting here (have a read of our response, or my previous blog post on the directions if you’re interested). What’s important are the reasons why it’s a bad idea both in principle and in practice to focus BLF’s funding in this way.
Our concerns
At the heart of our concerns is the need for the directions to continue giving effect to the additionality principle – the idea that BLF’s funding is supposed to be additional and distinct from government funding. In practice, the additionality principle is given force through the wide measure of discretion that BLF is given to fund work across a broad range of areas within a general remit, which may or may not coincide with the work of other funders, government included. The changes highlighted above constrict BLF’s discretion, placing the additionality principle at serious risk of being undermined.
Even beyond this fundamental issue of principle, recent events have highlighted clear practical reasons for why setting BLF such specific priorities would be counterproductive. Following the EU referendum, we’re facing an uncertain economic outlook over the coming years, during which the needs of the communities and organisations that BLF funds will very possibly change. If BLF is going to achieve its strategic aim of ‘keeping open, demand-led funding at our core’, it needs the ability to be responsive as that demand changes.
Even from the perspective of a government looking to explore opportunities to work jointly with funders like BLF, the level of specificity proposed would be unhelpful. We’ve already effectively seen a change in government since the referendum, and had the directions been finalised three months ago, the government might find BLF focused very particularly on issues on which its views may have now shifted.
Keeping the directions focused at a high level of strategic oversight allows opportunities to work jointly to evolve over time, rather than being pegged to the static policy agenda of a particular moment.
Our recommendations
With these reasons in mind, we’ve put together a simple set of recommendations that will address the changes we’re most concerned about:
- Keep the current wording of the additionality and complementarity principles
- Remove the issue-specific elements of the proposed spending priorities
- Directly reference BLF’s discretion in making decisions across its spending priorities in the directions
- Only require BLF to consider working with others where it actually produces better outcomes
These changes to the draft directions will help secure BLF’s unique and distinctive character as a funder for years to come, and we’ll be working hard to get them taken up.
As ever, if you have any thoughts, drop us a line in the comments below or by email – and many thanks to those of you who fed in following my last blog post.
Michael was our senior policy officer until January 2019, covering issues around charity tax and finance (including social investment) and the impact of the economy on the sector. 
