Lottery bodies holding back £1.5bn

A dispute has broken out between Tessa Jowell, the Culture Secretary, and several lottery bodies over allegations that they are hoarding more than £1.5bn of lottery money.

Ms Jowell has warned the organisations - including the Heritage Lottery Fund - that she will introduce legal powers to cut down on their unspent funds. She has asked the National Audit Office (NAO) to launch an investigation into their accounts.

But the HLF disputes the allegation. "We welcome the NAO review," a spokeswoman said. "They audit our accounts and have never criticised the way we manage our lottery balance."

Last year, the then media and tourism minister, Kim Howells, ordered the 15 lottery bodies to cut the unspent balance by 50 per cent - about £1.7bn - by spring 2004.

But earlier this month, Ms Jowell admitted this target would not be met and unveiled even tougher plans to force the bodies to reduce the unspent balance.

She now wants to penalise lottery bodies that do not spend quickly enough, and she even plans new legislation that will allow her Department of Culture, Media and Sport to take away unspent reserves from any lottery body it believes is hoarding money.