£3.6bn that lottery can't give away

THEIR job must be one of the best in the world. They give away billions of pounds. The money they are giving away comes from other people. And it's all going to good causes.

Former England football star Trevor Brooking, Welsh ex-rugby union star Gareth Davies and film director Alan Parker - all are members of an elite club charged with distributing National Lottery money.

But they have a problem: they and their 12 fellow chairmen of the various lottery distribution boards seem to be having some difficulty handing out the cash.

In the seven years since the launch of the lottery, these boards have received £12.4bn to spend on projects ranging from the Millennium Dome to local scout huts.

But the amount of unspent money earning interest in a Government account has grown to an incredible £3.6bn, according to figures seen by Financial Mail.

This cash pile, invested in Treasury gilts by civil servants at the National Debt Office, has earned more than £1.2bn in interest over the past seven years - nearly £200m a year.

On paper, the worst-offending distribution board is the Film Council, chaired by Parker, which has received £80.4m , but spent only £17.9 million. But a spokesman said: 'These figures give such a wrong impression of what is happening. In fact, all the money is committed to film projects.'

And the council could be on the verge of a windfall of its own after a £2m investment of lottery cash in Gosford Park. The Thirties 'Upstairs Downstairs-style' whodunnit stars the cream of the British acting establishment, including Kristin Scott Thomas and Alan Bates. It has been nominated for seven Oscars.

But the Government is increasingly concerned about the way the lottery cash pile has grown. After it swelled to £3.53bn, Culture Secretary Tessa Jowell last month called in the heads of the distribution boards and lectured them about the need to speed-up spending. Since then, the amount of lottery money sitting in bank vaults has grown by a further £70 million.

A furious Jowell told her deputy, the blunt-speaking Richard Caborn, to get tough with the lottery distribution boards. And according to the Department of Culture, Media and Sport, he did just that.

A department spokesman said: 'The distribution boards have promised us that by 2004, the amount of money unspent will have fallen to £1.6 billion. You can be sure that Mr Caborn will be holding them to that promise. We have also agreed to a number of measures, including allowing the boards to give advances on low-risk projects. That will make it easier for them to spend the money.'

But critics point out that a year ago, when there was only £2 billion of unspent money, the then Culture Secretary Chris Smith also promised drastic action.

At the time, he claimed the Government was encouraging faster spending by the Arts and Sports Councils and other bodies involved in preserving the environment and encouraging sciences. Smith's pleas obviously fell on deaf ears - since then the cash pile has grown by almost £1.6 billion.

Conservative Culture spokesman Tim Yeo blames the Government for the lack of action. He said: 'I have now spoken to a number of lottery distribution heads. The fault lies with the Government, which should set targets and make it easier for the distribution boards to spend the money.'

Yeo blamed the boards for inefficiency last month before he met Liz Forgan, chairman of the Heritage Lottery Fund, and Lady Brittan, chairman of the Community Fund, who between them have £1.4 billion unspent money in the kitty.

But now Yeo accepts the lottery boards' arguments that the money, though unspent, is committed to projects.

For example, the Heritage Lottery Fund, which according to the Government is sitting on almost £1 billion, claims that virtually all the money is committed to projects. 'The money is not just sitting around idly,' said a spokesman.

'We do not just hand over all the money on a project. The money goes out in instalments when the bills come in.'

Sport England, which is chaired by Brooking, has £415 million to play with. It has a policy of keeping back ten% of its grants until projects are completed to ensure that they are carried out to officials' satisfaction.

But leaders of projects depending on Sports England money say this policy can sometimes mean that they cannot claim for money that has been allocated because they have not made enough progress.