Opposition MPs lined up yesterday to plead with the government not to slash the Big Lottery Fund budget in today’s spending review.

A Westminster Hall debate on the funding of the voluntary and community sector took place yesterday afternoon, during which a number of Labour MPs and one Scottish MP asked the government to provide assurances that BIG funding would not be reduced.

The Cabinet Office representative, Robert Halfon MP, was unable to deny the rumour that the Chancellor will reduce the proportion of ‘good causes’ money from the National Lottery from 40 per cent to 25 per cent - a move that the sector believes will mean the funder will have to close its doors to future bids for three years.

Anna Turley (pictured), shadow minister for civil society, said: “If it is true that the Chancellor intends to take around £320m from the Big Lottery fund and redirect it to DCMS spending on arts and sports, it is a shameful act of misappropriation.
 
“The Chancellor should not be raiding the people's Lottery to plug gaps in his departmental spending to try and compensate from the total failure of his long term economic plan.”

She added that: “This act will hit the smallest charities doing the most important work in the most deprived areas.
 
“I urge the minister to ask his friend the Chancellor to think again. But the worry for many hard working community and voluntary sector volunteers and professionals is whether the Chancellor will tomorrow hasten his assault on the sector which has already seen the Big Society agenda disappear in the wave of cuts.
 
Turley described the sector as “very fearful of tomorrow's statement”.

“The British people donate these funds when they buy lottery tickets in good faith that the money will go to good causes,” she said. “The guiding principle has always been that lottery money adds to rather than replaces public funding.

“Is the minister going to allow this principle to be shredded to compensate for the government's failure to protect and support our public services?”

Halfon said that he did not know what will be in the spending review today, but urged MPs to “wait and see what happens”. He listed a number of policy initiatives including National Citizen Service, the Access Foundation and Big Society Capital.

He said that “people are becoming more community minded” and that “social enterprise is as important as economic enterprise”.

‘Large charities driving down costs by operating at a loss’

Naz Shah, Labour MP for Bradford West, who secured the debate, said that funding cuts and commissioning practices, which favour larger bodies, were forcing the closure of small charities.

She accused the government of failing to “build capacity” in the sector to cope with the move from grants to contracts.

“Larger charities drive down costs,” she said, operating some projects as “loss leaders” just to win contracts, which smaller charities are unable to do.

She also called for the government to resolve the uncertainty around business rates relief.

Reform gift aid

MPs from both sides of the House used the debate to call for reform of gift aid as a way to increase funding to the charity sector.

Susan Elan Jones, Labour MP for Clwyd South, called for gift aid to be reformed to encourage more young people to give.

She suggested the government look at “making it automatic when you donate by text” citing the introduction of the Gift Aid Small Donation Scheme as precendence for paying gift aid on small amounts without signed declaration forms.

Michelle Donelan, Conservative MP for Chippenham, said: “The charity sector misses out on £1bn per year because people are not opting in.

“What we need to do is explore the possibility of an opt out for the working age population.”

Halfon said that introducing an online system for gift aid had made it “simpler” for charities to claim.

He added that the government had launched the innovation in giving fund to encourage the use of new technology.

Turley pointed out that GASDS had not raised as much as it had been expected to.