UK: THE LOTTERY AFTER THE LOTTERY. - Which sectors are cashing in on the Lottery millions now filtering through to 'good causes'? The British film industry and the nation's architects were expected to be big winners but the effects of the giveaway have b

by Rhymer Rigby.
Last Updated: 31 Aug 2010

Which sectors are cashing in on the Lottery millions now filtering through to 'good causes'? The British film industry and the nation's architects were expected to be big winners but the effects of the giveaway have been far from predictable.

'It's a disaster,' declares Wilf Stevenson, director of the British Film Institute. Is he talking about the closure of a major UK studio?

The collapse of a promising deal with a big American investor? No, Stevenson is zooming in on the millions of pounds of extra finance now available to the UK's film industry, courtesy of the National Lottery. His superficially perverse gripe (more of which later) serves to illustrate a couple of important points: first, that Lottery proceeds are now working their way through into the economy as a whole; second, that even within the sectors which are on the receiving end of the Lottery lucre, there are serious question marks over whether or not this funding represents a force for good.

Just over two years ago, the UK fell into line with most of the western world and set up a national lottery. After the initial furore - a combination largely of pious moralising from those who disapproved of government-sanctioned gambling, and tabloid headlines involving £20-million winners who were either 'rats' or who claimed their lives wouldn't be changed by the windfall (honest) - the Lottery has settled down to become part of the national furniture. All of a sudden, the arts, our heritage, sports and other such worthy causes which had seen their funding dwindle over years of government cuts are having a field day. The refurbishment of opera houses, the conversion of power stations into art galleries, the creation of verdant biospheres in Cornish quarries, a boom in the number of British films in production and much-needed increases in funding for our Olympic hopefuls are all going ahead as promised. The upshot is that for several industries, most notably film, architecture and construction, there is a popular perception that good times are here to stay - and all thanks to the Lottery which so far has made £2.7 billion of winnings available for projects in these favoured sectors.

The film industry has felt the effects of the Lottery more than any other and, as Stevenson's reaction indicates, this huge cash injection has received a mixed reception. This seemingly cool greeting of an apparent gift horse can be explained by Britain's historic lack of film distribution facilities, a far cry from the vertically integrated film companies which flourish in the US - we may be good at making films, but finding a commercial screen on which to show them is a different matter altogether.

Not that British film-makers have always been so well-regarded. After a post-war decline, British movie-making spent most of the '80s on the critical list. Then, in 1991, something unexpected happened. The Crying Game, a very British motion picture (the IRA, gritty atmospheric locations and a nice line in transsexuals), hit the big time in the US; the film, which cost £2.5 million to make, took $63 million at the North American box office. This marked a turning point and other successes (Four Weddings and a Funeral, Shallow Grave, Trainspotting) followed.

Over the last few years, this recovery in production has been augmented by a hefty chunk of Lottery cash. In 1989, 33 films were made in the UK; in the first 10 months of 1996, the figure was 108. Of these, Lottery funding, at an average of £500,000 per film, figured in 42. And some, such as Kim Ballard, finance director of the British Screen Group, a film finance company, are only too happy with this arrangement. 'We're very well disposed to it,' he says. 'We only put up about 20% of a film's cost, so to be able to find another partner is a godsend.'

Others like the general idea, but think the mechanism for distributing finance to producers is in need of refinement, a development which is scheduled for later this year. Under the present, rather hastily introduced regime, individual companies approach the Arts Councils on a project-by-project basis, with their submissions being judged on a rather woolly set of criteria by those who are perhaps not best placed to gauge what constitutes a viable film and what constitutes indulgent arty garbage.

Under the new system, which should come on line later this year, the Arts Councils will invest money principally through several (up to four) franchise companies. This select band will put in applications for a number of films each company wants to make over the forthcoming three years and, as each project comes on line, the body will be able to draw down money from its earmarked chunks of finance. This new system, so the thinking goes, should provide a level of security and continuity in a business where capricious cash-flow is the norm.

But for the system's critics, this is still not enough; the revamped process, says Stevenson, will still be pouring money into movie-making and, as such, still be a waste of scratch card millions. 'It's doing exactly what the industry doesn't want,' he says. 'The problem is that the money's going into production, not distribution.'

And, despite successes such as Trainspotting and the various Jane Austen adaptations, British films remain something of a minority taste, with the average cinema-goer far happier on a diet of Hollywood's finest pap. So cinemas are not only seeing an oversupply of films, but an oversupply of the kind of films which are hardly their bread and butter fare. Even back in 1994, 50% of the films produced in Britain were never distributed (they either went straight to video or went nowhere at all). Stevenson is not alone in his rather dark view of current arrangements for Lottery funding, his pessimism being echoed by a number of insiders, one of whom describes the Lottery millions as a 'shot of heroin for a lot of rather moribund institutions'. He points out that, like the malefic opiate, Lottery cash may make things look better in the short term, but ultimately leads to long-term deterioration.

The construction industry, and with it architecture, is a rather different matter when it comes to the effects of this new-found munificence. Although the impact of Lottery funding on this sector is nowhere near as large as it has been on the film industry, spectacular building projects by their very nature tend to grab headlines. It is, after all, very easy to be scathing about schemes such as extending and refurbishing the Royal Opera House (£50 million) or doing up other buildings which are widely held up as playthings for toffs. Such grands projets have led to widespread media speculation, notably in the Evening Standard, that the architects involved in Lottery schemes are making out like bandits.

If there is an element of truth to this, it is a vanishingly small one and applies only to a tiny minority of the profession. The majority of those working within the design and build sector are still suffering the effects of a double-dip recession that hit them harder than anyone else.

As David Rock, vice-president of the Royal Institute of British Architects, says, 'The Lottery has had a far more significant impact in terms of publicity than in practical terms'.

Statistics back this up: when the Lottery money is in full flow, it should - taken with the private capital needed to top up Lottery projects - provide around 4% to 5% of the annual building and design work going on in the UK (the industry is worth about £50 billion). But, Rock points out, while monies have been allocated, they have not yet been drawn down. Even when they are, the delay between the awarding of money, and the architects and developers seeing it is still appreciable. A report by the Henley Centre puts the Lottery's contribution to the sector in perspective. Come the millennium, the Lottery should have created around 30,000 jobs in the construction and related sectors, but this is against a backdrop of a sector which has lost half a million jobs since 1990.

For architects, there is also the question of the differential impact of the Lottery across the profession since most architects design everyday buildings, not graceful, eyecatching bridges to span the Thames. Even for those who specialise in the latter, high-profile projects account for only 4% of the monies awarded. Thus, while fees have gone to the Norman Fosters of this world, a lot of work has also gone to small, provincial practices working on more pedestrian and not particularly lucrative schemes, village halls, for example. And for the large number of architects' practices which fall between these two very separate stools, the Lottery's impact will be minimal.

But while architects may not be doing as well from the Lottery as many imagine, there are other, less immediately obvious beneficiaries. Sadlers Wells Foundation is receiving 75% of the cost (up to £40 million) of its new theatre. In addition to direct local employment on the project, 2,000 additional visitors will benefit from amenities in the area. Other hidden beneficiaries range from accountants, who are often called on to prepare Lottery bids, to the small retailers whose sales of Lottery tickets are helping mitigate the damage wreaked by out-of-town superstores.

Of course, there have been Lottery losers, and not just the most obvious candidates such as bookies and gaming arcades. Others, such as the downmarket women's magazines and other denizens of the supermarket checkout, have also suffered. As have the charities, although in the Lottery's defence, it is hard to establish a direct link between the drop in their income and the newly increased incentive for people to bet on a row of numbers coming up.

On a different level, the new national institution also raises concerns both that (despite assurances to the contrary) Lottery funding will become a substitute for government support and that the profits are not being wisely spent. Certainly those who believe that unexpected cash is a de facto good thing should look at what North Sea Oil did for the economy.

And they might bear in mind that while Lottery funds are available for capital projects, they do not as yet endow those ventures - and the UK has no shortage of worthy cash-starved institutions.

But the Lottery is still in its infancy, and many of these objections could turn out to be mere teething problems, leaving only the philosophical question of whether this is how we as a nation want to fund our arts and culture.

The irony is that by the time the teething problems are resolved, there will be no other option. If we don't like the answer to the question, it'll be too late to put the Lottery genie back in its bottle.

How it all works

The five good causes that benefit from the Lottery

After prizes, the retailers' take and Camelot's cut, 28p from every Lottery ticket is left for distribution to five good causes. The money is split equally between the Millennium Commission, the (four national) Arts Councils, The National Heritage Memorial Fund, The National Lottery's Charities Board and the (four national) Sports Councils.

The first three are most likely to have the most discernible effect on the national economy, as their remits tend to involve large capital projects.

With the Arts Councils, these are undertakings such as film production and the building of galleries and theatres. The National Heritage Memorial Fund seeks to conserve the nation's heritage. And the Millennium Fund's mandate is to leave the nation with 'lasting monuments' to mark the year 2000, the most obvious example of which is the Millennium Exhibition whose contribution to posterity, if it comes off, will be a building that could pass for the bastard offspring of a sea urchin and a dinner plate.

The distribution bodies differ in how much partnership funding they require, that is, the percentage of the overall cost the recipients of grants must raise themselves. This varies from Heritage's 'no fixed percentage', through the Arts Councils' 'absolute minimum of 10%' to the Millennium Commission's hefty 50% minimum. As partnership funding needs to be in place before Lottery money is handed out, Millennium projects are most dependent on private sector goodwill.

The latest figures show that 23% of the funds for Heritage projects have been drawn while across the five awarding bodies, the average figure was only 9%.

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