2020 Report details for project: 4th National Lottery Licence Competition
| Project name | 4th National Lottery Licence Competition - there are 2 reports for this project: 2020, 2021 |
|---|---|
| Google search | Google search on project name (opens in new window)  |
| Contracts | Contracts search (opens in new window) - under development |
| Organisation | DCMS (D5 ) - see all reports for this organisation |
| Report year | 2020 (data is from September 2019) |
| Category | Transformation - see all reports for this category |
| Description: | The project aims to run a competition to award the next National Lottery licence (4th), that delivers statutory duties of due propriety and player protection, while incentivising responsible innovation and maximising returns to good causes. |
| DCA (RAG) | Amber |
| DCA text: | The IPA Delivery Confidence Assessment (DCA) rating at Q2 1920 (30th September 2019) was Amber, due primarily to the following factors; - The arrival of Rothschild & Co (R&Co) as lead advisors and recruitment of experienced Commercial Director, on secondment from Government Commercial Organisation, provided confidence that senior leadership was in place to manage the programme. - A more detailed schedule of market engagement commenced in September with a broader range of organisations including technology firms and finance providers in addition to established lottery operators. Since the Q2 1920 (30th September 2019) Amber IPA DCA, the following non-project operating environment activities have impacted the original Q2 IPA DCA; - The requirement to follow the HMT-led Treasury Approval Point (TAP) process, and specifically its deferral until after the March 2020 Budget, introduced a 3-month delay to the start of the competition. This action consumed programme contingency but the end date is unaltered, and delivery confidence unaffected because the delay was used to mature competition documentation and engage further with market. Since the Q2 1920 (30th September 2019) Amber IPA DCA, the following primary project actions have impacted the original Q2 IPA DCA; - The Draft Invitation to Apply (ITA) and draft Licence were published to market in December 2019 and feedback received in January 2020. This exercise flushed out a number of issues with the market and allowed us to address them in final versions of competition documentation, giving us greater confidence that our requirements would be understood and acceptable to potential applicants. - An extensive assurance and audit plan was delivered. Including: IPA Gateway 2 review; internal audit of Outline Business Case, Incentive Mechanism, and Evaluation Framework; engagement with Cabinet Office complex transactions team; shadow bid reviews to test how suppliers might 'game' competition; and testing of game assessment processes. These actions increased confidence in the quality of the competition documents and processes. |
| Start date | 2018-11-16 |
| End date | 2023-08-01 |
| Schedule text | The scheduled project end date at Q2 1920 (30th September 2019) is 01/08/23, due primarily to the following factors; - The Third Licence expires in February 2023, followed by a 6-month project close down period. - Allows for up to 2 years transition period following the conclusion of the competition and award of Preferred Licensee. Since the Q2 1920 (30th September 2019) baseline project end date of 01/08/23, the following non-project operating environment activities have impacted the original Q2 baseline project end date; - The requirement to follow the HMT-led Treasury Approval Point (TAP) process, and specifically its deferral until after the March 2020 Budget, introduced a 3-month delay to the start of the competition. This action consumed programme contingency but the end date is unaltered. - The advent of the COVID-19 pandemic, and the possibility of multiple lockdowns, increases the risk that competition processes have to be extended. Delaying the result of the competition will reduce the period for transition and increases the risk of having to extend the Third Licence. Since the Q2 1920 (30th September 2019) baseline project end date of 01/08/23, the following primary project actions have impacted the original Q2 baseline project end date; - Whilst waiting for TAP (Treasury Approval Point) to convene, we took opportunity to conduct further engagement with market and share more information to help potential applicants prepare their responses when competition started. - We have conducted an impact analysis on the programme schedule of various COVID-19 lockdown scenarios and have revised Business Continuity Plans to improve preparedness and resilience. |
| Baseline | £7.84m |
| Forecast | £13.21m |
| Variance | 0.68% |
| Variance text: | The 19/20 in-year baseline / forecast variance at Q2 1920 (30th September 2019) of 68%, is due primarily to the following factors; - Rescoped commercial strategy and approach in terms of the nature of the competition we were seeking to generate. Took opportunity to explore wider sources of investment capital and interest in the competition in the finance and technology sectors. - Appointment of Rothschild & Co (R&Co) as lead advisor to engage with the market, and changes to scope and timing of other contractors work. Since the Q2 1920 (30th September 2019) 19/20 in-year baseline / forecast variance of 68%, the following primary project actions have impacted the original Q2 19/20 in-year variance; - Improved programme and financial controls have been implemented to ensure the programme stays within the uplifted budget. - Gambling Commission appointed a permanent Chief Financial Officer and internal auditors have reviewed in-year costs and future budget estimates (in Outline Business Case). |
| Whole Life Cost | £64.34m |
| WLCost text: | The baseline Whole Life Cost at Q2 1920 (30th September 2019) is £64.34m, due primarily to the following factors; - Approximately half of the whole-life costs are incurred in the design of the Licence, running the competition for the operator, and managing the transition period from Third to Fourth National Lottery Licensee. - The cost of regulating the Fourth Licence for 10 years is the remainder of the whole-life costs. For the purposes of estimating at this stage, we assume the cost of regulation is the same as that for the Third Licence, c£3.15m/year. Since the Q2 1920 (30th September 2019) £64.34m baseline Whole Life Cost, the following non-project operating environment activities have impacted the original baseline Q2 Whole Life Cost; - The requirement to follow the HMT-led Treasury Approval Point (TAP) process, and specifically its deferral until after the March 2020 Budget, introduced a 3-month delay to the start of the competition. Consequently, some programme costs have slipped into later years (FY21/22 and FY22/23). The impact will be confirmed in due course in the Full Business Case. Since the Q2 1920 (30th September 2019) £64.34m baseline Whole Life Cost, the following primary project actions have impacted the original Q2 baseline Whole Life Cost; - In the course of developing the Outline Business Case, there was a re-appraisal of the resources required to run the competition effectively. Increasing the strength of the evaluation teams, both with Commission and external subject matter experts, will ensure a better quality process. - Decision to procure a Transition, Technology and Operations partner earlier than originally planned has increased whole-life costs, but will ensure the risks inherent in the transition period can be effectively managed. |
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| Notes2: | |
| Sourcefile | IPA_2020.csv |
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Acknowledgement: GMPP data has been re-used under the Open Government Licence.