Is Loto healthy?

It's raised a mint, so why, asks Paul Gosling, does no one want to know NHS Loto?

Given the current funding crisis, NHS trusts might be expected to welcome money wherever it came from. But there is suspicion and hostility towards NHS Loto, which has had trouble giving money away.

NHS Loto has been running since 1988, set up by the National Hospital Trust (NHT), and administered by the fundraising specialist Pascal. The lottery has raised over pounds 750,000 for the health service, and over pounds 250,000 in the past year. But instead of welcoming the extra money, the National Association of Health Authorities and Trusts is unequivocally critical.

"We feel it is misleading using the words `NHS' and `trust'," says Nahat's spokeswoman. "It is very difficult for the public when it is given the impression that this is an official body raising money for the NHS.

"They are in it for the profit. Gullible people are giving money when they don't know what the salaries or administration costs are. We would rather people gave to the NHS through their taxes." This view is not shared by the Department of Health, which is happy for the lottery to use the terms `NHS' and `trust'.

The Gaming Board has its own worries. "We are not very happy," says Tom Kavanagh, secretary of the board. "They do not seem to have raised very much for a well-advertised lottery." NHS Loto is promoted every week on Channel 4 in the Carlton area, and the board believes this might be expected to generate more ticket sales than it does.

The board's main concern is that it does not have jurisdiction over NHS Loto, and is therefore unable to inspect its books. If NHS Loto were organised as a single national lottery, it would be liable for regulation by the Board. Instead, NHS Loto has opted to be registered as a series of small local lotteries.

Until earlier this year NHS Loto had been registered for each lottery with the London Borough of Kensington and Chelsea. Under pressure, Kensington and Chelsea deregistered NHS Loto, a decision appealed against by NHS Loto. Although represented by barrister Cherie Booth, NHS Loto lost the case, and is now registered with different councils as separate local lotteries.

"We don't know how many," says Tom Kavanagh. "We are trying to find out. Our cynical view is that they want to keep themselves out of our hands."

Georgina Catchpole, administrator of the NHT, says the scheme is the victim of an unwarranted smear campaign. As a registered charity, its administration overheads are open to public inspection through the Charity Commission, she says, and there is nothing wrong with running lotteries locally.

"It has always been a series of local lotteries," says Ms Catchpole. "The trust is operated on the basis of local branches which raise money for local areas. It is not because we want to avoid the clutches of the Gaming Board. They are not keen on us, they never have been, and that is because of a long history. You can operate a local authority registered lottery up to a maximum of pounds 250,000 per year."

NHS Loto has eight branches, six of which run their own lotteries. Half the income goes into prize money, a quarter to the promoters, and the balance, less a small administration overhead for running the trust, goes into a fund for distribution. Worried by the lack of good-quality applications, the NHT wrote to all NHS trusts earlier this year, clarifying criteria, and asking for more applications. The quality of bids has improved, the number increased dramatically, and the next board meeting will have pounds 200,000 to distribute.

"Awards are for research projects for development of new surgical or nursing procedures," says Ms Catchpole. "One successful bid recently was for nursing based on nutrition, working out of a hospital and extending into the community to improve diet for people at risk. We gave pounds 35,000 to a hospital in Wales for special equipment for tumours on the lower bowel - in the past these would have led to the removal of the lower bowel and a colostomy - and the hospital is teaching other doctors the technique.

"Our main criteria is that it has to be used in a hospital or other competent body, not just in hospitals. We are not covering GPs and royal colleges, but we do not rule this out. Bids have to be assessed by the donation committee, which is made up of physicians and surgeons. We want to get research started, and then for continued funding to come from elsewhere. We have tried to steer away from just responding to other people's appeals."

The lottery's promoters would like to expand NHS Loto to become the second- biggest lottery in the country, but this was delayed while Pascal raised venture capital for the project, and then further put back by the uncertainties caused by the legal dispute.

Meanwhile, the NHT is upset and irritated by their critics. Ms Catchpole wearily sighs: "I do wish I understood why everyone had it in for us"n