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The National Lottery and the non-profit sector

2.1.6 Relationship between the Distribution Agencies and the Lotteries Board (2): A conflict of interest?
 
From a legal perspective, it is not certain whether the Board is entitled to play a direct role in the process of allocation, whilst having at the same time responsibility for regulating this same process. A referee cannot ordinarily be a player in the same game that she is overseeing!

Legal opinion on this relationship is being sought, and will be integrated into the report as soon as it is available. At face value it is fair to suggest that the close operational relationship between the Board and the Distribution Agencies makes it difficult for these latter to function as an arms-length policing mechanism. In the UK, by contrast, considerable effort has been made to distinguish the bodies responsible for policy formation and regulation from the bodies responsible for overseeing the allocation process.

The Lotteries Board does not believe this relationship is cause for concern. As they put it:
The National Lotteries Board has been charged by the Minister of Trade and Industry to set up and manage the Central Applications Office. This is the office that offers administrative support to the Distributing Agencies. The Agencies have been appointed by the Minister DTI. In term of the Lotteries Act, the Agencies, together with the NLB and the Minister are responsible for policy formulation. It is the function of the Agencies to then adjudicate the applications. The Board, as trustee of the NLDTF, oversees the distribution of funds and reports on this to Parliament in the Annual Report of the NLDTF. The Agencies report to the Board at a frequency determined by the Board.66
Footnotes:
  1. Sershan Naidoo, e-mail response to questions posed by the author, 05/08/2002.
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