1.1. Created in 1994, The National Lottery Heritage Fund (formerly the Heritage Lottery Fund/HLF) supports projects involving the national and local heritage of the United Kingdom. We are a UK-wide arm’s length public body, we receive policy directions from the UK Government and from the governments in Scotland and Wales, with Northern Ireland directions to be reviewed.
1.2. Since our inception The National Lottery Heritage Fund (NLHF) has invested £8 billion in grants to more than 45,000 projects across the UK, making us the biggest single investor in the UK’s heritage outside of Government, a level of investment made possible through people across the UK participating in the National Lottery.
1.3. We support the full breadth of heritage, from historic sites and areas, industrial and maritime, museums, libraries and archives and parks and gardens, landscapes and nature. More than a third of our funding goes to buildings, but over one-fifth is invested in land a biodiversity.
1.4. We believe in the value of heritage as a contributor to the life of the nation, assets, organisations and experiences that help define our lives, and our shared identities.
1.5. The heritage sector is vital to the economy:
1.6. 35% of UK citizens “totally agree” that the presence of cultural heritage influences their choice of holiday destinations, and in 2018, £17 billion were spent on heritage-related visits and trips.
1.7. Over the next five years we were anticipating investing around £1.2bn in funding to “inspire, lead and resource the UK’s heritage” with a stronger advocacy role to add value to our financial support.
1.8. The National Lottery Heritage Fund has devolved more of its grant making: more than 90% of our decisions taken locally by staff and decision-makers who live and work there and more than 80% of our funds support projects outside of London, with funding distributed broadly in line with the population across the UK.
1.9. We have invested in response to local priorities – 69% of people say our investment was a good or excellent use of National Lottery funds.
1.10. We reach every part of the UK’s life because we fund an extremely diverse range of heritage. More than a third of our funding goes to buildings, but over one-fifth is invested in land a biodiversity.
2.1. The National Lottery Heritage Fund is administered by the National Heritage Memorial Fund – which separately receives Government funding via DCMS. It was set up in 1980 to save the best of our national heritage for the public, as a lasting memorial for those who lost their lives for the country in armed conflict. The NHMF is in its 40th year, founded in 1980 with the passing of the National Heritage Act as a memorial to those who have given their lives for the UK.
2.2. NHMF provides financial assistance to prevent the loss of our outstanding heritage UK wide, from fine Designate and Significant museum and archive collections, to irreplaceable landscapes and historic sites. Over four decades, the Memorial Fund has saved more than 1,200 of the UK’s most iconic objects and places including, for example, Henry VIII’s warship, the Mary Rose, Wentworth Woodhouse, England’s grandest country house, and the Flying Scotsman.
2.3. The Memorial Fund is the Fund of last resort for outstanding nationally important heritage that is at risk. Preserving and using objects and sites from the past for and in the present, the Fund confers memorial status on what is funded for ‘those who have died for the United Kingdom’. It is fitting that a Fund with a strong memorial character should take a lead in responding to the Covid-19 crisis to save our most outstanding heritage now at risk of loss due to the financial and operational challenges presented by the pandemic.
What has been the immediate impact of Covid-19 on the sector?
3.1. As the early impacts of Covid-19 and social distancing measures became apparent, we moved a pace to understand the known and potential impacts on the heritage sector and to reconfigure our approach to address the rapidly emerging needs of the sector. Along with other National Lottery distributors, funders and public bodies, we’ve worked as quickly as we can to understand the unique challenges our sectors face, and where we can be most useful in offering support.
3.2. In order to underpin our changed approach with evidence, we conducted a snapshot a survey of the heritage sector which was open for a week in late March, so our data comes from early in the crisis. Resulted in 1,200+ responses, 79% of which are current or previous recipients of funding from us. We also commissioned a separate survey with Wildlife and Countryside Link focusing on natural heritage, species, and landscape. A full briefing on the survey findings is attached at Appendix A.
3.4. Combined with our analysis, the intelligence we are gaining from in-depth discussions with sector partners, those who have received funding from us in the past, and those approaching us for support, we also have anecdotal feedback that suggest the following challenges:
3.5. Uncertainty about the medium term - significant financial issues likely to emerge over the coming months e.g. capital works delays;
3.6. Need for future investment in marketing, job creation and skill development in longer term.
How effectively has the support provided by DCMS, other Government departments and arms-length bodies addressed the sector’s needs?
4.1. As the scale and urgency of the challenge facing UK heritage emerged, we have worked as quickly as possible develop our Heritage Emergency Fund to protect and sustain heritage assets and organisations in the coming months. This has meant we took the decision to close our main grants programme and refocus our energy and grant-making on a response to the COVID-19 emergency.
4.2. The new fund - £50m – is open now - https://www.heritagefund.org.uk/funding/heritage-emergency-fund - and will address immediate pressures over the next 3-6 months for those most in need with a focus on essential operating costs to save heritage and sure up cash flow and short term stability for organisations. Support will be available as:
4.3. An emergency fund that organisations can access over the next 3-6 months as short-term funding to stabilise operations and manage unforeseen risks. Grants of between £3,000-50,000 will be available to organisations that have received funding in the past and are either a current or previous recipient of our investment (see update below) – detail here: https://www.heritagefund.org.uk/funding/heritage-emergency-fund/3-50k;
4.4. A further level of support of grants of £50,000-£250,000 to address immediate risks to UK heritage and help organisations who need a higher level of support to become more stable - detail here: https://www.heritagefund.org.uk/funding/heritage-emergency-fund/50-250k
4.5. On June 18th we confirmed grants can now be used to help organisations reopen after the coronavirus (COVID-19) crisis, while the application deadline has been extended. The deadline to apply has also been extended to 12noon Friday 31 July.
4.6. We are currently examining, with partners across the sector, a select number of key strategic investments where heritage is identified as at greatest risk. This could include grant increases to funded projects that are currently underway.
5.1. As of 12pm on Friday 6th June there had been 471 applications to the HEF. With a total ask of £19m averaging £40.5k per applicant (n.b. a number of these applications have not been assessed at this stage and may be ineligible). 417 applications had been received into the HEF for grants between £3,000 and £50,000 and 54 to the HEF for applications between £50,000 and £250,000, with a total ask of £19m in support, averaging at £40.5
5.2. Just under a third of the 471 application were seeking less that £10,000 in support, and one-fifth have applied for between £40-50,000. Over a tenths of all applications were over £50k.
5.3. The split across heritage is as follows:
Heritage Area based on project reference quoted
Costs Applied For
Cultures and Memories
Historic Buildings and Monuments
Industrial, Maritime and Transport
Landscapes and Nature
Museums, Libraries, Archives and Collections
Other or undefined
5.4. Eight decision making panels have now met (these are weekly). To date, 223 applications worth £7.4m have been funded. 20 applications have been rejected.
5.5. There is a clear distribution of grants across the United Kingdom.
5.6. This shows the range of organisations and types of heritage that are seeking our support at this initial stage, and that will also be exploring other sources of Government and non-government support.
5.7. It also helps indicate the challenge of thinking and acting strategically to devise and test new models, collaborations, sharing resources and possibly organisational mergers to build resilience and adaptability for the longer-term should elements of social distancing measures last.
6.1. Alongside this we’re offering flexibility for our current projects. The Fund is continuing to support 2,500 projects already in delivery across the UK. In addition to the Heritage Emergency Fund, and in order to meet the immediate needs of the organisations we support, we’ve made some further immediate changes to focus our efforts on support for the heritage sector:
6.2. We have also established an approach to soliciting applications where there are specific strategic needs. This will allow us to:
6.3. We have also set up a reactive Loan Facility which will give the opportunity for enterprise and trading organisations to access bridging finance and capital where there is demand for this option as part of a blended support package. This is positioned as emergency, interest free finance as opposed to a social investment and based on a higher tolerance of risk, alongside measures to ensure any loans are made on a transparent basis. This will give us the opportunity to inform our approach to alternative investments and help prepare us for supporting the new business models emerging in the longer-term.
What will the likely long-term impacts of Covid-19 be on the sector, and what support is likely is needed to deal with those?
6.4. Using the approach set out in the previous section, we have also worked to identify, insofar as it possible at the current moment, what the longer term challenges may be for the heritage sector, and being to put in place approaches to mitigate and to support the sector to emerge in the best possible shape.
6.5. The scale of the Covid-19 challenge is immense. As organisations shift from managing immediate crises to longer term planning, we think it likely persistent uncertainty for all organisations involved in the visitor economy will mean further crises hit organisations in different sectors in different ways over the coming months. While our emergency funding can make an important contribution to saving heritage and organisations at risk, we know our investment won’t be able to meet the demand for funding.
7.1. For the longer term, to help with recovery from the current crisis, we will be investing in two Enterprise Development programmes across the UK for heritage leaders, and Business Support Programmes in all four countries. This will be in addition to the £50m support package and comprises:
7.2. Digital has moved from a priority for long-term development to an urgent practical focus. We are adapting our Digital Skills for Heritage initiative to respond to the pandemic and investing £1.2m. Creative use of technology can allow organisations continue to work and online creative content and activities are more important than ever.
7.3. Our approach focuses on a rapid triage, to find out what organisations need, delivering support though practical and immediate approaches peer learning and providing free, openly licenced resources to reach organisations across the sector.
7.4. We will focus our initial support on helping organisations to:
7.5. Move meetings, events and activities that engage a variety of audiences online
7.6. Underpinning all of these are safety/safeguarding, security, accessibility, legal and ethical issues that organisations might be very familiar with in physical spaces but may be less experienced with in digital spaces.
7.7. Earlier this year we awarded grants The Digital Heritage Lab, led by Arts Marketing Association and Heritage Digital, led by The Heritage Alliance will be providing free support and resources to the sector. They are adapting their plans in response the crisis to focus on digital fundraising, digital marketing, engaging audiences digitally and working with online collections, bringing forward their schedule to deliver 'emergency surgeries' and online workshops from this month onwards,
What lessons can be learnt from how DCMS, arms-length bodies and the sector have dealt with Covid-19?
8.1. The sector has generally responded incredibly positively, flexibly and with a sense of purpose. This has involved DCMS moving quickly to engage with its ALBs, and the existing frameworks and relationships being used to co-ordinate responses and collaborate on providing support.
9.1. We have been working in co-ordination with other National Lottery distributors, a full range of DCMS and other Departmental ALBs (including Historic England and Arts Council England) to ensure a joined-up approach. This has included sharing data and analysis, linking up over application guidance and criteria, and discussing broader plans for medium to longer term recovery.
9.2. The DCMS has led co-ordination across their ALBs, through weekly Ministerial meetings led by the Minister for Sport, Tourism and Heritage, and we are regularly engaged with a range of officials across the department, specifically the Heritage and Museums Teams.
9.3. We are also working with Defra and environmental NGOs; and linked into MHCLG.
9.4. As a UK wide distributor working in all four nations, we are also engaging with devolved governments and relevant agencies e.g. Museums and Galleries Scotland, Historic Environment Scotland, Cadw and Arts Council Northern Ireland.
How might the sector evolve after Covid-19, and how can DCMS support such innovation to deal with future challenges?
Other areas for consideration
12.1. The Committee should also consider that at the current time there may be an impact from Covid-19 on the source of Good Causes income at source – the National Lottery. Whilst it is currently not known what the full impact will be on ticket sales, it may be that this has implications in the future. Each of the distributors has a different business model, so variations in income will have a different effect on each. Alongside other distributors we are working with Camelot and the Department to understand what this might mean and to inform mitigation.
National Lottery Heritage Fund – June 2020
APPENDIX A – analysis of survey – produced March 2020
National Lottery Heritage Fund – Insight Briefing
This Briefing summarises The National Lottery Heritage Fund’s evidence of the economic impact of the coronavirus (COVID-19) on heritage UK wide. Since 1994, The National Lottery has raised more than £40 billion for good causes in the areas of heritage, arts, sport, and community. In practice this means the National Lottery Heritage Fund is the largest dedicated grant funder of the UK’s heritage. Since 1994, £8billion has funded more than 44,000 projects across the UK.
We support the full breadth of heritage, from historic sites and areas, industrial and maritime, museums, libraries and archives and parks and gardens, landscapes and nature. Heritage-based tourism is worth £20.2billion to the UK economy per annum. Overseas visitors to UK cultural, historic and natural heritage attractions spend more than double per visit (an average of £560) compared with their domestic overnight counterparts (an average of £210 per trip) (our research, 2016).
On 20th March we emailed a short questionnaire to understand the impact of the COVID-19 crisis on the organisations we support who have received a grant of £250,000 or more in the last 10 years. This survey was also issued externally to the sector through our communication activity. The survey closed on 27th March and we received 1,253 responses. We also commissioned a parallel survey via Wildlife and Countryside Link and their sister LINKS across the UK. The survey was sent to their 100+ members and 60 responses were assessed. Details of the results from this survey is are available separately.
On Friday afternoon, 20th March, we launched a short survey to provide insight into the current and possible future impact of the COVID-19 pandemic on the people and heritage organisations the National Lottery Heritage Fund work with.
This went by targeted email to a sample of our grant recipients in receipt of a grant over £250K within the past 10 years (this included some of the most significant visitor attractions in the UK as well as many smaller independent heritage sites, museums and archives, parks and gardens and community organisations).
We also promoted an open link on our website to encourage other heritage bodies to respond. Throughout the week that the survey was open we promoted it on our social media channels.
The survey was open for a week (20 March to 27 March) and received 1,253 responses. 479 of these are from the targeted email to organisations who had received £250,000 or more since the 2009/10 financial year. 79% of respondents are being or had been supported by us.
The survey helped us gather evidence about the immediate and longer-term impact of the pandemic on the heritage sector and helped inform how we, our partners and Governments can support the sector swiftly and in the best ways we can.
The questionnaire contained seven quantitative questions and one qualitative question examining the impact of and support required for COVID-19 pandemic. All responses were analysed by organisation type, geographical spread and heritage area.
We explored the responses by geography and sector. We found no significant differences by either category.
The impact of the COVID-19 epidemic is universal with 98% of organisations having been impacted within the first three weeks and the remaining 2% expecting some impact in the future.
Respondents were geographically evenly spread across England, Scotland, Northern Ireland Wales, and covered the breath of heritage areas we fund.
The financial impact will be high with loss of revenue being the second most frequently reported impact at 72%, after postponement of planned events at 91%.
Organisational impacts are also high with more than half of respondents reporting they expect to close to the public (71%), suffer a lack of available volunteers (55%), staff absence (49%), as well as reduced visitor numbers (49%).
Larger organisations reported greater impact around staff absence, the lack of available volunteers and a need to invest in IT/home working.
“The disease has resulted in the complete loss of enquiries for the summer season and a flurry of cancellations, but also the uncertainty around the disease means that even the 2021 season cannot be planned with any confidence and it is unlikely that people will book, resulting in immediate cash flow problems and longer term viability issues.” (Survey respondent, 2020)
The majority (82%) of organisations report high or moderate risk to the long-term viability of their organisation.
Charity or third sector organisations and private organisations are likely to be more at risk with over 90% responding with a high or moderate risk to long term viability.
Medium sized organisations are likely to be slightly more at risk. 45% of organisations with 11-20 employees report a high risk to long term viability, compared with 25% average reporting high risk. “No one wants to make people redundant, or lose staff, but with no income coming in, will simply run out of money to pay them. SSP does not pay enough for staff so I have looked at many sources and can't find the answer to this. There is lots of offers of support and guidance for which we are grateful but it does not help the financial situation at present. There is real concern in the charity sector that loans are not an option long term.” (Survey respondent, 2020)
Based on current financial reserves and levels of income/overheads, 47% of organisations can survive for no more than 6 months, with 11% expecting to keep going for no more than 2 months. Charity and third sector organisations and community and voluntary groups report having the least financial reserves with 36% and 35%, respectively, stating they will not be able to keep going past 4 months.
“Currently the situation regarding COVID19 is changing rapidly and as an organisation we are endeavouring to respond. However, the crisis that we face is split between short term cashflow and longer term loss of ongoing revenue. The precarious financial situation that the Trust finds itself in commenced with the flooding in February, when two of its museums were flooded and the village … was closed to visitors, this has been completely exacerbated with COVID19. The work that has been done to date on emergency scenario planning indicates that if the Trust is 'shut' for six months (i.e. visitors do not come back till the autumn) then we need to replace £3.5 million in lost revenue.” (Survey respondent, 2020)
Organisations across all types and sizes reported some level of financial shortfall. This varies according to the relative size and financial health of the organisation. 36% of organisations expect a financial shortfall of up to £50k in the next 6 months, 6% expecting a shortfall over £500,000 and 7% an impact of over £1m (although it is also clear that for some organisations it is too early to fully understand the potential financial impact).
For the organisational types with the least financial reserves, the charity and third sector organisations and the community or voluntary groups, a financial shortfall of up to £50k is most prevalent at 31% and 58% respectively. Unsurprisingly larger organisations report a higher financial shortfall; organisations with over 20 employees will experience a financial shortfall of more than £250k.
In terms of support from The National Lottery Heritage Fund and our partners the most popular response was for greater flexibility for existing projects/grants (77%), followed by replacement funding due to loss of revenue funding by forced closures (58%), and emergency funding (52%).
“The tone of support has been encouraging and knowing that you will be flexible with funding has been helpful. We now need clarity on what this will mean in reality and what actual support we can apply for. This is of the upmost importance but needs to be communicated very quickly as we and many other organisations are facing a cash flow crisis.” (Survey respondent, 2020)
Nearly half of organisations were not clear on the support measures that they might be able to access that had announced by the government when they completed the survey. Small and large organisations were more likely to report confusion about where to access support. Of the options offered in the survey, the statutory sick pay relief package for SMEs (22%), the HMRC Time to Pay Scheme (18%) and the 12-month business rate holiday (15%) were most cited as possible routes to access.
“There's not enough info yet to support the government funds/support which have been announced. We have little idea what/if we're eligible to access.” (Survey respondent, 2020)
Of those organisations that did not report 'Don't Know' most selected 'Other' and were mentioning a variety of measures including the elements of the package of support announced by the Government at the time the survey was live. Subsequent support has since been announced. There were also a large number reporting the support measures were not applicable.
We are using these findings to inform our response to support organisations across the sector and across the UK. We are also sharing these results with our partners who are considering their own support packages (for example, with Arts Council England for museums in England, Historic England and Historic Environment Forum) and to support the UK Government and devolved Governments’ and associated agencies’ need for evidence. This will cover financial packages, streamlining of our processes, and working with partners to ensure as much information is available as possible on the full range of support measures.
National Lottery Heritage Fund - March 2020