Lottery distributors discuss merger

Falling ticket sales have forced distributors to try to cut costs

A merger between the two bodies responsible for distributing National Lottery money to good causes is being discussed separately by their board members.

Under the proposed move, the New Opportunities Fund and the Community Fund would combine to cut costs and make it easier for charities to apply for grants.

But charities are warning that the merger would create a powerful new distributor, tasked with deciding more than half the Lottery cash, and voluntary organisations could lose out.

The Community Fund gives money to the voluntary sector and the New Opportunities Fund to health, education and environmental projects under government direction.

Reform

Falling income from Lottery ticket sales has forced distributors to consider ways of reducing overheads.

Planes for a merger was one of the more radical proposals put forward by the government in July last year in its review of Lottery funding.

The Community Fund supports charities, and voluntary and community groups throughout the UK as well as agencies working abroad.

It was at the centre of a political storm last year over a controversial £340,000 Lottery grant to a group working with asylum seekers.

The New Opportunities Fund provides Lottery funding for education, health and environmental projects across the UK.

The boards of both funds will meet separately on Tuesday to discuss the proposals.

Pet projects

A spokeswoman for the Community Fund said: "We will be discussing the possibility of a merger and how it could work.

"The board are fairly open-minded. They want to hear from the chief executive and will take into account the views of the stake-holders so it is in the best interests of voluntary organisations and charities."

BBC media correspondent Torin Douglas says critics in the voluntary sector are concerned that the merger will give the government control of half of the lottery cash.

He said they fear the money will be steered towards the government's own pet schemes - some of which they say should be funded by direct taxation.

The chairmen of both funds are due to meet Culture Secretary Tessa Jowell on Wednesday to discuss the outcome.