HERITAGE LOTTERY FUND

  Further to my letter of 19 May 1998 I am now writing to put forward issues which The National Trust for Scotland considers relevant to any inquiry.

  The National Trust for Scotland was formed in 1931 and is constituted under its own Acts of Parliament from 1935 to 1973. Its purposes are defined in the Acts and can be summarised as{{"shall be established for the purposes of promoting the permanent preservation for the benefit of the nation of lands and buildings in Scotland of historic or national interest or natural beauty{{" (The National Trust for Scotland Order of Confirmation Act 1935). Although its constitution was largely based on that of The National Trust in England its geography and history makes its duties within Scotland somewhat different to its sister body south of the border.

  The Trust has benefited enormously from the Lottery, having received or accepted offers of about£30 million, virtually all from the Heritage Lottery Fund. Four major projects of Mar Lodge Estate, Charlotte Square, Edinburgh, Newhailes and Kittochside Museum of Scottish Country Life have attracted the greater part of this but a number of smaller projects have also benefited. The Trust is extremely grateful to the Heritage Lottery Fund Trustees and for their support and confidence that the Trust is able to deliver on such important projects to Scotland, and indeed beyond.

  Generally speaking the Trust is extremely welcoming of the new guidelines for the Heritage Lottery Fund and its widened remit. It awaits to see with interest how this will work in practice. There are however a number of areas where it has some concerns which it feels would be appropriate for your inquiry to address.

  The National Trust for Scotland is the guardian of over 110 sites of historic interest or natural beauty throughout Scotland. By its very nature these sites are of significant national and often international importance and are deserving of being saved and protected for the nation. The Trust's constitution requires as much public access as possible within the conservation constraints of the property. The Trust therefore feels it is appropriate that consideration should be given to projects on the basis of the merit of the project and/or property and not just on geographical location. In addition The Trust is now noticing a reluctance by the Heritage Lottery Fund to consider some of its applications because "the Trust has already done well by HLF". The very nature of the organisation means that it is likely to have more properties or projects that are worthy of consideration, but is being penalised for its very success in helping to preserve these properties for the benefit of the nation. In this respect, it should be emphasised that the Trust does not own property for its own benefit, or even its own members, but acts as a Trustee on behalf of the nation.

  The monitoring of grants by HLF is being carried out and measured by a series of key statistics. These include grants per head of population, number of grants per region and other similar statistics. These statistics are themselves becoming a barrier for fair and open consideration of merits of individual projects. The number of projects that have been supported in any one given area should not be a barrier to further projects being considered in that same area if those projects are of sufficient value for the benefit of the nation. Similarly population density should not be a criteria for the issuing of grants. The number of heritage assets which are still capable of being protected are probably more numerous in a less populated area of the UK than in the more populated areas as less damage has already been done to those assets. In Scotland in particular there are some relatively large tracts of land which require conservation and protection and similar opportunities are not available elsewhere in the UK.

  Endowment funding has been almost totally withdrawn from grant consideration by the Heritage Lottery Fund because of their potential cost. The Trust believes this is inherently short sighted and that it is only through the use of endowments that the effective long-term protection of capital assets can be made. Grants for capital projects and acquisitions are only sustainable up to a certain level without substantial revenue funding for the future. Revenue funding can, in the event, only come from commercial activity and visitor numbers. The opportunity for visitors is greater in those areas where there are high population or areas where there is easy access for a large number of the population and/or tourists. By default this is not possible in certain areas of the UK, notably Scotland and Northern Ireland. Population density is substantially less per hectare in Scotland but the assets or projects requiring funding on an ongoing basis are the same as elsewhere in the UK. There is not the opportunity for commercial development or total business numbers and endowment type funding is really the only sensible way of securing the long-term future of these assets.

  The current method of endowment funding has been linked with the so called Chorley Formula and the Trust believes that this formula is the correct one to use for both revenue and capital long-term funding. However the Trust recognises that the formula can produce some very large numbers and it would suggest that a review of this be carried out by the main bodies concerned in consultation with each other to come up with a revised method of funding which does not necessarily take into account all the aspects included in the Chorley Formula.

  The creation of the Scottish Parliament is potentially going to introduce additional administrative and legal requirements to those already in existence. The Trust notes the HLF's intention to set up Regional Committees and looks forward to receiving more details on this. It is however important that the legal framework is clarified at an early stage.

  The Trust is concerned that the promise of the lottery being total additional new money and funding being withdrawn from the existing sources has not been sustained. When the lottery was announced by the previous government the funding for the National Heritage Memorial Fund was in the order of £10 million per annum. The funding for this is now in the order of £2 million and the work carried out by the NHMF has had to be subsumed into lottery funding. The Memorial Fund is exactly that, a memorial to all those troops who lost their lives in the last war and the Trust feels that it should continue as such. A reduction of funding and hence the loss of additionality is extremely worrying and steps should be taken to reverse this process.

  In summary the Trust would say that its areas of concern with the Heritage Lottery Fund are consideration of projects on merit, and not just the geographical location; statistical performance of the lottery fund becoming a barrier to the issuing of grants; endowment and revenue funding; the potential effects of the Scottish Parliament and regionalisation of HLF; and finally the funding of NHMF.

  The remit of the Heritage Lottery Fund is extremely wide and is becoming an increasingly important source of funding for any sort of heritage project for our nation. There is a danger that the money available will be spread so thinly that the effectiveness of the lottery funding will be lost and that the major assets of this nation will be also lost to the nation.

  Thank you for allowing the Trust this opportunity to submit evidence to your inquiry. If it would be of benefit to the Committee, I would be very pleased to give verbal evidence, together with my Director of Finance, Mr Nigel Fairhead.

June 1998