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Last Updated: Thursday, 19 January 2006, 15:18 GMT
Lottery 'being raided by Labour'
Lottery draw machine
National Lottery money is allocated to 'good causes'
Lottery money is being "raided" by the government for projects it should pay for from taxation, a report suggests.

The Centre for Policy Studies said this breached the lottery's original aim of avoiding areas traditionally paid for by taxpayers.

Former Tory PM Sir John Major, in The Larceny of the Lottery Fund, said Labour was "muddying the waters between Exchequer and Lottery revenues".

Culture Secretary Tessa Jowell said the funding gave "the public a voice".

The report said the Lottery's good causes could lose out if funds were "siphoned" off for the 2012 Olympics.

The original remit of good causes has been stretched beyond credibility
Larceny of the Lottery Fund
Centre for Policy Studies

Sir John warned: "If the Lottery Fund continues to be raided in order to boost the Exchequer, there will be far less remaining funds for all the good causes I had hoped would benefit most from its creation."

The report argued that some "good causes" introduced in the 1998 National Lottery Act - such as health, education and environment - should be paid for by general taxation.

It criticised the New Opportunities Fund, established by the Act, to provide funds for those areas.

"The New Opportunities Fund does not even have the semblance of policy independence," the report said.

"It is explicitly carrying out government policies, acting in line with the prescriptive 'policy directions' set out for it by government."

Public priorities

The Department for Culture, Media and Sport responded by saying the government had issued policy directions to the Lottery's distributing bodies ever since the Lottery was founded.

The New Opportunities Fund was merged with the Community Fund in 2004 to become the Big Lottery Fund.

Ms Jowell said that the Labour government was "re-energising" the lottery.

"The good causes now have a broader appeal.

"Giving the public a voice in awarding Lottery grants is hardly grand larceny."

Four good causes

The report said the National Lottery Bill, due for its final Commons reading on Thursday, would further undermine the Lottery's Good Causes remit.

"The original remit of good causes has been stretched beyond credibility as the Government has siphoned off Lottery money for projects that should have clearly been met out of general taxation.

"There is an overwhelming case for changing the list of good causes to just four: sport, the arts, heritage and charities and to reinstate the principle of additionality."

Additionality is the principle whereby Lottery funds should not fund projects which should be paid for by the taxpayer.

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