UK National Lottery Only Allocates 25% To Good Causes

Grumbles

The National Lottery first live television draw took place on 19th November 1994.  Since then billions of UK pounds have been won in prizes.  When it was first launched I was under the impression that half the money would be for prizes and the other would be allocated to good causes.  Since then I have not really questioned the percentage allocated to good causes until I saw something recently on the Big Lottery website that made me doubt my perception.  On that site, at the time of writing this article, it says

The Big Lottery Fund is responsible for distributing 40 per cent of all funds raised for good causes (about 11 pence of every pound spent on a Lottery ticket) by the National Lottery – …”

The Big Lottery is not the only distributor of grants, however it is a major awarding body of money received from National Lottery ticket sales, scratch cards and other games.  I was curious enough to do some searching on the internet and it did not take much effort to find out some rather disappointing information and figures.

Camelot UK Lotteries Limited have held the license since 1994 and is set to run the UK National Lottery until 2023.  The annual report for financial year 2015/16 states the income of gross tickets sales was a staggering £7,595.2m with £4,198.9m (55%) given in prizes.  Good causes were allocated £1,951.4m, only 25% of the money collected from ticket sales and other Lottery gambling schemes.  Apparently Camelot is only legally required to allocate 20% of income, so technically that team can pat themselves for a job well done.  However morally should they?

Since Camelot operated this license every few years this profit making organisation has received criticism, mostly about the mismatch between it and charitable and voluntary sector philosophies.  Camelot may point out that Duty charged by the Government during this period was a massive £911.5m, which is 12% of ticket sales, paid directly to the Government.  Imagine how useful that would be for local charities and community groups, many with good budgeting skills developed as a direct result of delivering services on shoe-string budgets.  So does the Government need to justify its actions too?

Games offered by the UK National Lottery offer hope and probably most people feel proud of their purchases made, when they learn about stories of funded projects on their televisions and radios, as they throw away their unsuccessful tickets and cards.  In these days of transparency maybe the Great British public should know how their money is spent.  Until now I had not even considered that the Government would receive a slice of the ticket sales’ cake.  Previously I assumed that the National Lottery was set up to pay for services the Government should pay for and did not want to or could not afford.  I never imagined that ticket sales would provide an income for the Government too.  Deeply disappointed is all I can say on this point.

Financial Statements for the year 2015/16 show that Camelot paid out £31.5m in employee salaries to 644 people.  This equates to an average of £49k per person whereas the average annual salary in the UK is only around £26k.  There is a bonus scheme that paid out £3.7m, a staggering 11.7% of the base salaries.  Bonuses paid to staff start at 5% of base salary, increasing for senior management.  One director earned £1.6m through salary, pension and incentive plan.

Every now and again Sir Richard Branson has thrown his hat into the ring to deliver the services operated by Camelot on a not for profit basis.  I am not an advocate of his, although it would fit the wider model a non profit making organisations raising and distributing money for good causes, for example Children In Need.  Whatever the future holds for the National Lottery and similar fundraising organisations a legal requirement to distribute 20% of income to good causes seems miserly.

 

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