In a foreword to a recent Centre for Policy Studies report, Sir John Major, the principal architect of the National Lottery, said:

I saw a huge opportunity to upgrade the national infrastructure that supported our favourite leisure pursuits. And, above all, I wished to provide grass-root facilities throughout the UK to encourage active involvement in Sport, the Arts or charitable endeavour… we can see the National Lottery has become the most potent force for regeneration and change that this country has seen in well over a century…^[1]

On some levels, it’s hard to disagree. At the time of writing, 321,924 grants, worth a total of £21,606,725,606, have been given to lottery 'good causes'. This massive cash pile - roughly equal to the GDP of the oil-rich gulf state of Oman - has indeed funded a series of major infrastructure projects. These include the Eden Project in Cornwall and the Tate Modern on London's South Bank alongside high profile failures like the National Centre for Popular Music and the Millennium Dome, and then countless smaller scale charitable and local sporting initiatives.

Amongst the many political debates which continue to rage around the National Lottery – has the Labour government contravened the principle of 'additionality'? How will using significant amounts of Lottery funding to support London 2012 affect smaller charities? - there have been ongoing concerns about whether those playing the most benefit fully from the causes supported by Lottery money.

It's relatively easy to find trite examples, like the £78.5 million grant for the renovation and extension of the Royal Opera House. This was made on the assurance that the House would open access and change its ticketing policy – yet should you now wish to see the latest production of Carmen in October, you'll have to find £185, and even that would mean seeing it on your own. But this is symbolic of a serious and longstanding problem: in 2000 the Public Accounts Select Committee of the House of Commons found that "some of the most deprived areas have yet to see the full benefit of Lottery money…"^[2] Has anything changed in the last decade?

According to new Theos research, the answer is 'no': the National Lottery is regressive. Using a combination of polling carried out by ComRes and research into Lottery awards to areas of high socio-economic deprivation, the new report presents a picture of high levels of play and stake amongst people on lower than average incomes, mirrored by low levels of investment in economically deprived areas. So although the National Lottery is not a tax in itself (play is taxed) lottery money is disproportionately garnered from lower socio-economic groups and then used for projects which disproportionately benefit middle and higher income groups, effectively redistributing wealth from the poor to the rich.

The research shows that people in lower social economic groups are more likely to play the National Lottery draw based games: C2 respondents are the most likely to play, with over 67% of interviewees in this category participating once a month or more, compared with 47% of ABs. When calculated against income, spending is about the same in low earning and high earning categories or, in other words, low earners are spending proportionately much more of their income in draw based games that their higher earning counterparts. The figures are even more stark when it comes to scratch cards. Here, lower income groups play more frequently and spend more when they do play. Respondents earning under £20,000 played around 17 times per year, while those on £35,000, for instance, played around 12. Respondents earning £15-20,000 spent £74.70 per year on scratch cards, compared to the national average of £44.18.

Then, having ranked local authorities according to the Index of Multiple Deprivation (IMD)^[3], the research found no strong correlation between high levels of deprivation and high levels of lottery spending. Blaenau Gwent, the most deprived local authority area in the United Kingdom according to the IMD, is only 133rd in the list of local authorities ranked by level of National Lottery grant per capita. Against a national average of £46,956,781, Blaenau Gwent has received only £21,215,877 – less than half the average, and only five of the top ten deprived local authority areas in the UK appear even in the top 100 local authorities ranked by lottery funding. At the other end of the scale, authorities such as Winchester, Rushcliffe, Stratford-on-Avon and Kennet were in the lowest IMD rankings but received among the highest grants.

The National Lottery clearly has, on many levels, helped poor communities in the UK, but more needs to be done to focus these significant resources into Britain’s neediest areas.

Paul Bickley is a Senior Researcher at Theos, and is the author of The National Lottery: Is it Progressive?

[1] Ruth Lea and Dan Lewis, The Larceny of the Lottery Fund. Centre for Policy Studies, 2006.