Natural England

Strategic approach to lottery work (AP01/38)

FOR DECISION

Introduction

1. In the last three months, the Countryside Agency has been working to reshape the policies of lottery distributors, the Heritage Lottery Fund (HLF), the Community Fund (CF) and the New Opportunities Fund (NOF) by responding to their recent consultations. In addition, we have started to focus on the next round of NOF funding due to be decided in 2002/3 in order to identify and promote opportunities to benefit the Agency and the rural agenda. The purpose of this paper is to seek Board support for a more focused approach to our lottery work to put the Countryside Agency into a better position to bid successfully for lottery funds to support its strategic goals.

Background

2. The National Lottery is a major funding source. Since 1994, it has raised £10.8 billion for good causes. Within England this money is distributed by the Arts Council, Sport England, Heritage Lottery Fund, the Community Fund and the New Opportunities Fund. Each of these receives a 16.66% share of the pot with the exception of NOF which receives 33.33% now the Millennium Commission is closed for business.

3. In the past our interest in the National Lottery has been twofold. First, we have sought to influence the policies of lottery distributors so that rural people and users of the countryside get a fair deal. This remains an important role because of the size of the resources the lottery distributors have available to them. Cabinet Office statistics state that in 1988/9 lottery spending was the second largest source of funding for rural areas, investing £208 million in the countryside. Second, we are an applicant for lottery funds. Money from individual distributors can help us deliver our national programme of rural change and improvement when other sources are lacking. Lottery funding is complementary to the other sources of external funding we work to secure and helps us lever further funds through business sponsorship. 

Securing lottery funds for Agency business

4. Since it was established, the Countryside Agency has capitalised on non-exchequer funds to help it achieve its objectives. This approach will continue. The need to bring resources into the organisation in parallel with Grant-in-Aid was highlighted in last year's corporate plan. 'We will continue to tap into alternative funding sources, such as the Lottery, European Union funds and business sponsorship and use such resources as additional support for our programmes of work, not as a replacement for our grant-in-aid which must continue to be at the heart of our ability to negotiate partnerships.'

5. In early discussions on this year's Corporate Plan roll forward it has become clear that we need to bring in additional resources if we are to deliver our ambitious planned programme of work. The Lottery is one source of extra funds, providing resources for our new projects which would either not go ahead or which would have a significant opportunity cost on other work.

6. Since April 1999, the Agency has directly secured over £30 million of lottery funds for its work (see Annex 1 for full details). As a major bidder we have a 100% success record, although sometimes negotiations have been long and protracted in securing a firm commitment (see Annex 3). Sometimes this has resulted in a reduction in the money we bid for (for example, our Doorstep Greens bid was for £21.5 million and we were awarded £12.89 million). In addition, it has become harder to negotiate on our overhead costs. (Again with Doorstep Greens we originally asked for NOF to cover 50% of overhead costs but subsequently had to reduce their contribution to 29%.)

Influencing the Lottery Distributors

7. A simple analysis of our strategic goals against those of lottery distributors (Annex 2) shows there are several areas of mutual interest and overlap which we should exploit through high quality applications.

8. The most significant areas of mutual interest are:

• a bid to HLF for a 'renaissance of Country Parks' programme on which the Enjoying the Countryside branch are taking the lead. The need for investment in this area has been illustrated by a recently published joint needs assessment by DEFRA, HLF, English Heritage and the Agency which highlighted the vast numbers of public parks of historic importance and other public open spaces which are at risk. This is already a corporate plan commitment;
• the South Downs restoration project in which the Agency is a key partner. A bid to HLF could be used to supplement the currently inadequate agri-environment measures and restore a landscape that people can enjoy as it becomes a National Park;
• improving public access to the countryside, through the 'right to roam' and upgraded path networks (the CROW Act requires local authorities to draw up rights of way improvement plans but leaves the implementation of these completely unfunded). Bids to both HLF and Sports England Lottery Fund are possible; 
• developing a better understanding of how the countryside functions and the essential links between town and country. This could include training in conservation skills, encouraging communities to carry out heritage stock takes (along the lines of parish plans) as well as new investment in the urban fringe;
• sustaining the diversity of countryside communities, especially those affected by foot and mouth disease, for example through integrated rural development projects, where the management of the land, recreation and tourism operate alongside each other, or through celebrating the diversity of rural areas through art and heritage projects;
• extending the principles of community forestry to most cities as a tool to economic and environmental regeneration - this would be a natural development of REACT (Regeneration through Environmental Action) which is currently being tested in a few areas using Urban & Rural White Paper funding.
• exploiting the interests all lottery distributors have in combating social exclusion and making sure that rural residents get a fair share of lottery funding.  

9. Our success with lottery funded projects would also help reinforce the position and role of the Agency, demonstrating our ability to 'get things done' and bring positive change to people and places.

10. As part of our influencing role, we have invested considerable time and effort to help partners (especially the AONBs) bring in money through HLF's area based schemes (see Annex 1). However, to date this has not yielded a good return on our investment, unlike direct bids to the distributors themselves.

Being more strategic in securing funds

11. To secure funding for this growing list of opportunities and to continue to shape the policies of individual distributors to get a fair deal for rural areas we need to become more influential. This requires a more calculated programme of influence which includes:

• reinforcing our dual interest in lottery when our Chairman meets the Culture Secretary, Tessa Jowell in November;
• a letter from the Chairman (or Deputy Chair) to the chairmen of relevant lottery distributors highlighting the key ways that we wish to work with them - and following up with a series of meetings;
• maintaining and developing officer level contacts with HLF, NOF and the Community Fund; trying to establish a better relationship with the Sports Lottery, which many say has a woeful record of delivery in rural communities;
• using departmental contacts in DEFRA and DCMS to influence future developments, particularly the themes for the next round of NOF funding in 2003;
• creating new alliances and networks with others in the socio-economic arena in parallel with the existing land based group (comprising of English Nature, the Wildlife Trusts, the Woodland Trust and RSPB) to exert collective influence on the distributors;
• investing sufficient time across the Agency in producing high quality bids and learning from our existing experience.  

Risk

12. If we are serious about being a successful bidder for lottery funds we need to shape the strategic direction of lottery distributors and invest sufficient staff time in developing applications. There is an implicit risk in this as we cannot guarantee all bids will be successful. However, if we don't explore wider sources of funding for our work we are in danger of not delivering our corporate plan objectives and failing to exploit new opportunities. We can manage this risk by holding early discussions with lottery distributors so we can test their reaction to our outline plans before we invest more time and money in fully developed applications. Contracting in external experts to play a 'quality assurance' role would help minimise the risk of wasting time on proposals which are not feasible or robust. 

Annex 1

Funding secured by the Agency from Lottery Distributors

*1 Countryside Commission *4 Includes costs of setting up the scheme after bid was agreed

*2 Based on current mid range staff costs (not London) *5 For first 4 years

*3 Costs met by British Heart Foundation *6 Includes consultants costs

Annex 2

Funding which could be applied for directly by the Countryside Agency:

* New scheme due to start April 2002

** Community Forests have successfully obtained money from the Community Fund in the past, however, the Countryside Agency is not eligible to apply directly for funding.

Annex 3

The PROCESS and timescale INVOLVED IN BIDDING FOR LOTTERY FUNDS

Example - Doorstep Greens bid to the New Opportunities Fund (NOF)