Statement about Big Lottery Fund operating costs
The following statement is a clarification of the financial operational cost of the Big Lottery Fund following media commentary over the weekend.
Mark Cooke, Director of Finance, Big Lottery Fund, said:
The suggestion that BIG pays £1 in every £8 it receives to itself is nonsense. The cost of the Big Lottery Fund managing 26,000 grants worth £1.38bn, awarding 14,000 grants and assessing 28,000 applications, and delivering £400 million of Government funding, is actually £1 for every £11 of Lottery income.
The Government has not “ordered BIG to cut its overheads to 5% of income” – it has been agreed that BIG will reduce its total lottery distribution costs to 8% of lottery income, and its core administration costs to 5% of lottery income. BIG’s Lottery distribution costs in 2009-10 were £58 million and lottery income net of the Olympics transfer was £611 million, giving a figure of 9.5%. While reducing this figure to 8% by 2014 is a challenging target BIG intends to deliver it through efficiency improvements and reduction in expenditure, without materially affecting the size or quality of the grant programmes it delivers.
BIG’s small grant programme, Awards for All, supporting grass roots community organisations with grants of up to £10,000 is a relatively costly programme to run but the sector strongly supports it and community groups depend on it. BIG has been praised for its effectiveness by all the main VCS bodies (NCVO, ACEVO, NAVCA, ACRE) and the Public Accounts Committee commented favourably on its regional outreach work, in particular, as a model other funders could learn from.