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For a good cause?

National Lottery funding and activist organisations

Earlier this month a GB News investigation found that the National Lottery Heritage Fund (NLHF) spent £250,000 on an initiative that celebrated the 1981 Brixton riots. It featured a speech from an activist who accused the police of “executing black kids”. The Fund limply responded that “our funding should not be used to promote the causes or beliefs of political organisations”, but the truth is that National Lottery funding is a hotbed of political activism.

The National Lottery Heritage Fund is one of the 12 distributors of National Lottery funding, alongside the National Lottery Community Fund (NLCF) and Arts Council England. Last year the Arts Council faced significant controversy after funding a group that campaigned against the government’s Rwanda policy. Its huge income is partly committed by law to “good causes”, with this obligation set out in legislation and up to a third spent in this way. Participants in the lottery are well aware of this (it’s part of the appeal), and the National Lottery boasts that it has disbursed 47 billion in funds through over 670,000 projects — all of which should be bound by rules concerning political partiality.

Looking through grant data, diversity of thought is difficult to find

However, successive scandals show that the National Lottery habitually pays out to activist groups that are not simply providing services in their communities. As far back as 2002, Home Secretary David Blunkett intervened when the lottery made grants totalling £527,000 to an activist group known as the “National Coalition of Anti-Deportation Campaigns (NCADC)”. The NCADC allegedly used illegal tactics in support of failed asylum seekers, and it opposed all restrictions on potential entrants to Britain. A National Audit Office report subsequently found that the NLCF had adhered to its policies and procedures in awarding the money. Almost 20 years later, the Lottery made a grant of £276,480 to “Migrants Organise”, a group that has protested immigration policy by blocking access to Home Office buildings.

Whilst National Lottery funding is not strictly taxpayers’ money, every one of the distributing organisations is a public body with an obligation to remain politically neutral and to conduct due diligence. Yet major scandals always seem to be right around the corner. In late 2018, the NLCF made a grant of £500,000 to Mermaids, a transgender charity now under investigation by the Charity Commission, and it conducted an investigation to determine if the funds were wrongly disbursed. Once again, the Fund did not choose to withdraw the funding. These recurrent controversies raise the question of how the National Lottery can be politically impartial whilst funding hundreds of thousands of projects from activist organisations.

To get some sense of how such decisions are made, I asked the NLCF how they ensure that their grants are not politically biassed. They obliged by providing me with their funding policy on campaigning and political activity, which makes for interesting reading. Their guidance assures the reader that they “welcome plurality and diversity of thought”, but looking through grant data that diversity of thought is difficult to find. I couldn’t identify one recipient group that engaged in anti-immigration political activism, even though the NLCF has a long history of funding groups which protest the other way.

This obvious imbalance suggests that internal guidelines regarding the political activity of grant recipients are inadequate. The law regarding National Lottery funds is not specific; it’s essentially up to the distributors, who give a lot of leeway to political groups. For instance, the NLCF asks that political activity “is not the primary purpose of the grant”, but this does not apply to campaigning, which includes “raising awareness” and “efforts to educate or involve the public”. National Lottery funding distributors can demand that recipients limit their political activity like they did with the NCADC, but they rarely use this power.

Activism is endemic amongst recipients of National Lottery funding, and many recipient organisations consider campaigning on social issues to be their primary purpose. Reviewing the largest Lottery grants in 2022, I easily found £499,950 committed to “Delivering Racial Justice in the South West”. It’s difficult to see how such a project meets even NLCF’s lax standards, since the Black South West Network openly admit that their “main aim is to shift the policy environment and deal systemically with race equality”. Overall the Black South West Network has received £1,818,054 from National Lottery distributors. For the last two fiscal years, it has collected over £200,000 annually from government grants and contracts, part of a total gross income of around £1 million.

According to data published by DCMS, in the six months from September to the end of March 2023 National Lottery grants totalled £243,300,128. Anybody who hopes the portion of grants aimed at promoting British heritage will be less politically charged is sure to be disappointed, since the National Lottery Heritage Fund claims that “heritage that is more inclusive will be more sustainable”. It insists that grant recipients “ensure that contemporary society in the UK is better represented in your heritage project”.

The National Lottery sustains an ecosystem of charities that masquerade as civil society organisations but which depend on money from public bodies to survive. These grants can cover core costs, as in the case of the Stratford East Theatre Royal which received 43 per cent of its funding from Arts Council England last year, but activists agitating for political change can receive high levels of funding, too.

Stand Against Racism & Inequality (SARI) is a telling example of this ecosystem. In 2021 SARI was awarded £792,892 by the National Lottery Community Fund, to be paid out over five years for the continuation of the “Every Victim Matters” campaign which “tackl[es] hate crime through support to individuals education and awareness raising in communities workplaces and schools”. Because this project qualifies as a “campaign” rather than a political project, National Lottery funding can be used for that purpose.

Many activist groups depend National Lottery funding for survival

It is difficult to know how essential NLCF grants are to SARI’s survival, but their accounts show that £502,100 or 52 per cent of their gross income in the fiscal year 2022 came from government grants and contracts. £253,507 was paid out by Avon and Somerset Constabulary and £162,741 from the National Lottery Fund. The year prior to the 2021 grant saw National Lottery income on a similar scale at £154,415. In a 2023 submission to a government consultation, it said, “SARI is (we believe) the largest hate crime charity in the UK” and advocated for wide ranging changes to the law, public services and criminal justice system.

Whichever way you cut it, funding from public bodies is essential to the existence of organisations like SARI. If the “largest hate crime charity in the UK” is habitually receiving over a tenth of its income from the National Lottery, with half funded by the government in grants and contracts, it raises significant questions about whether the government is effectively lobbying itself. Even if every recipient of National Lottery funding sticks to the letter of the law on political and campaigning matters, activism across the better part of a million projects is bound to amount to huge effects on the political discourse — and subsequently government policy.

The examples above are a fairly random if thematic selection of the recipients of National Lottery funding. A more systematic review would likely prove that many activist groups are dependent on National Lottery funding for survival, and therefore that the state is more closely intertwined with the third sector than anyone previously imagined. For instance, the Ubele Initiative has not only received £250,000 from the NLCF but three separate grants totalling £377,800.

In future, National Lottery funding should be reserved for good causes, like it says on the tin. The Secretary of State should rewrite the rules for the distributing bodies, so that activist organisations are excluded and the National Lottery no longer funds a web of charities, community interest companies and non-profit organisations that lobby the state on every issue imaginable.

The TaxPayers’ Alliance, as a campaign group, does not receive funding from public bodies. Nor should any other group that campaigns on political, economic and social issues. Organisations that habitually engage in political action should not receive funds earmarked for good causes, and “campaigning” activities by recipients should be heavily monitored to ensure that Lottery funds are going to meaningful services. By tightening the rules we can put a stop to the ecosystem of activist organisations kept on life support by public bodies, redirecting the money to the real good causes.

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