Navca has said that additionality is a fundamental principle of the way the National Lottery operates, and that any rethink should include consultation with small charities and the public.

The umbrella body issued a statement responding to comments last week by Ceri Doyle, director of strategy, performance and learning at Big Lottery Fund. At a conference she said that because the funder was receiving more applications for grants that were previously provided by local authorities or the health service, it needed to re-examine the principle of additionality and come up with a policy.

Joe Irvin (pictured), chief executive of Navca, said: “This was a highly contentious issue when the Lottery was established, and the legislation only got through once the government promised that Lottery money would go to good causes, not to prop up government spending on public services.”

The additionality principle, meaning that lottery funding must be additional to public expenditure, was first set out in a 1992 White Paper ahead of the creation of the National Lottery and was included in the National Lottery Act 2006. Lottery distributors have to outline how they make sure that funding does not act as a replacement for government funds.

Irvin added: “Lottery money comes from the people who buy tickets. There is a general understanding that the money raised will go to good causes the state won’t fund.

"If there is a rethink this should be done by asking both the public, who buy lottery tickets, and the thousands of small charities and community groups, who benefit from lottery funding, what they think.”