Big Lottery Fund hits back at newspaper's 'nonsense' claim

Fundraising | Tania Mason | 22 Feb 2011

The Big Lottery Fund has refuted claims by the Sunday Telegraph that it spends £1 out of every £8 it receives, on running costs.

An investigation by the newspaper into the Fund’s running costs paints a damning picture of its efficiency. The paper accused BIG of employing twice as many people as the Whitehall department that oversees it; of spending millions of pounds on management consultants to help it assess projects; and of spending £37.5m of the £568m it gets from the Lottery on staff salaries – an average of £38,000 per employee.

It also calculated that BIG employs one staff member for every 28 applications, exposed its spending on corporate credit cards and travel since last April (£921,000) and highlighted the £145,000 salary of chief executive Peter Wanless.

But the Big Lottery’s Fund’s finance director, Mark Cooke, has dismissed the claims: “The suggestion that BIG pays £1 in every £8 it receives to itself is nonsense. The cost of managing 26,000 grants worth £1.38bn, awarding 14,000 grants and assessing 28,000 applications, and delivering £400m of government funding, is actually £1 for every £11 of Lottery income.”

He also denied that the government had “ordered” BIG to cut its overheads to 5 per cent of income”, as the article stated. “It has been agreed that BIG will reduce its total lottery distribution costs to 8 per cent of lottery income, and its core administration costs to 5 per cent of lottery income.”

This is an effective reduction in operating costs from 9.5 per cent of income to 8 per cent, Cooke said, which would be “challenging” but able to be achieved through efficiency improvements. A reduction of this size will not “materially affect the size or quality of the grant programmes,” he added.

BIG also defended its staff salary levels, saying that most employees were graduates whose roles required skill and judgement, and were not just routine clerical jobs.

Separately, DCMS has published the results of some research it carried out to benchmark the operating costs of lottery distributors against other funders. Click here to read the results.

Directory: Big Lottery Fund

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