Winning numbers

The Isle of Wight Lottery, England’s first local lottery for employment, is proving to be a long-term solution to local business support provision, as Clare Goff finds out.

It was amid conditions similar to those experienced by local economies today that the Isle of Wight Lottery came into being. Government funding for business support was wavering, the training and enterprise councils were about to be dismantled, and the local chamber of commerce wanted to find a way to provide continuous support to businesses and start-ups unable to access finance from banks or mainstream providers.

With seed funding from the Phoenix Fund, the lottery, the first in England developed to create employment opportunities, was established in 2001 and has since helped 65 local businesses get off the ground or grow. Members of the community pay £1 a week to be put forward into a weekly prize draw in which they could win £2,000. Around 5,000 people currently take part in the lottery and all money accrued is invested back and goes towards providing interest free loans of up to £25,000 to small and medium sized local businesses.

Kevin Smith, chief executive of the Isle of Wight Chamber of Commerce, said that loans have helped set up businesses from tea gardens to marine-based activities, and allowed entrepreneurs from designers to an alpaca tour company take their first step. ‘Over the last eight or nine years of funds we’ve helped create or sustain 1,050 jobs across the island,’ Smith says.

As mainstream financial provision gets harder to access, the lottery has seen a rise in the number of loans applications. It is also seeing the growth of an increased understanding among the general public of the need to protect and sustain local economies. For while local people are happy to support charities or lotteries that raise funds for causes such as local hospice or sick children, as the Gloucestershire Lottery does, the economic wellbeing of a community is a harder sell.

‘People feel that employment is something the government or local authority should be doing something about,’ says Smith. ‘But we are preventing people from getting poor. People in employment are healthier and happier but getting that message across can be tough.’

West Wight Alpacas secured an interest-free loan of £21,000 from the Isle of Wight Lottery to breed alpacas, organise walks and set up a workshop.

Over the years the lottery had launched numerous campaigns – from supermarket trolley dashes to gala festivals – to help increase involvement and interest. It has recently introduced new prizes to the lottery – with prize money of £4,000 and £10,0000 – to build support.

As the economy suffers, the importance of supporting local businesses and of the need for the island to find ways to deal with its difficulties by itself is getting through to local people.

The economic downturn has had a significant impact on the Isle of Wight, which is in many ways a metaphorical island as well as a physical one, cut off as it is from much of the south–eastern prosperity that surrounds it. The number of benefit claimants on the Isle of Wight reached 4.9% in the latest data from the Office of National Statistics, compared to 2.8% for the south east as a whole. Figures show that 12.7% of 18-24 year olds on the island were claiming Jobseeker’s Allowance, a figure one local charity worker described as ‘horrendous’.

‘Our indicators are adrift,’ says Smith. ‘We are a small economy and it’s easy to forget about us.’

The lottery has protected the island from the fall-out of the closure of the regional development agencies and the dilution of the government’s business support programmes and Smith says that the scheme is coming into its own now. ‘If we didn’t have it there wouldn’t be a business support programme in place.’

In its early years the Isle of Wight lottery learned a lot from the UK’s first lottery for employment, based in Pembrokeshire. Now 17 years old, it is still going strong and has loaned over £4m to 290 local businesses creating almost 1,500 jobs.

Kevin Smith and his team are now helping a new local lottery get off the ground, in Dorset. They are working with the Dorset Chamber of Commerce which hopes to get a pilot lottery up and running soon.

In the United States local lotteries are much more common, with the likes of the state-administered Arizona Lottery spending almost $2.7bn since 1981 helping to fund programmes including educational and business development schemes.

As unemployment rises and government support for start-ups experiences cutbacks, it is likely that local lotteries will increasingly be seen as the answer to some of our entrenched local economic development problems.

Essential facts: the Isle of Wight Lottery
•    More than 1,400 people have won cash totalling £1.3m since the lottery was launched around ten years ago
•    65 interest-free loans have been awarded to island businesses to help them establish or develop, helping to create more than 1,000 jobs
•    The lottery was honoured at the inaugural Community Development Finance Association (CDFA) awards in London when it was presented with the Innovation in Reaching New Markets award
•    The lottery is the first in England to be developed specially to create employment, and people who buy a £1 a week ticket help fund interest free loans to local businesses
•    It is promoted by The Isle of Wight Opportunity Society Limited – a division of the Isle of Wight Chamber of Commerce, Tourism and Industry – which is operated on a strictly non-profit basis. This means that all proceeds are directed into a loan fund, which can be accessed by island businesses
•    All loan applications are assessed by an investment panel and if approved they are provided on an interest free basis to both start-up and expanding island businesses
•    The lottery is supported by a number of the island’s major employers, who offer a payroll deduction scheme to employees to allow them to enter direct from their wages, and it has been awarded sponsorship by the Isle of Wight County Press, Isle of Wight Radio and NatWest Bank.


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12 years ago

I also heard there is an education lottery coming in Jan 2013?
Its on Twitter @163glps

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