LONDON — The government did
not properly monitor how nearly £1 billion in revenue from Libor fines was spent, according to a report by national auditors.
£200 million of the Libor fund was earmarked to create 50,000 new apprenticeships for unemployed 22-24 year olds.
However, the Department of Education has been “unable to demonstrate that these have been delivered,” the National Audit Office said.
Meanwhile, the Treasury and Ministry of Defence have been unable to confirm that the £592 million given in grants to charities has been spent as intended.
In total, £773 million was allocated to charities and good causes, to be distributed by the Treasury and Ministry of Defence, while £200 million was allocated for apprenticeships. £40 million is yet to be committed through any scheme.
The Libor Fund was established following an investigation into the Libor rigging scandal, which resulted in several banks being fined a total of £973 million. In 2012, the then Chancellor George Osborne said the fines, paid into the Libor Fund, would “go to the benefit of the public.” However, no rules were established about how exactly this money was to be spent, and it is not ring-fenced. As such, says the report, “the government has been able to use the money for any government spending.”
In 2015, David Cameron pledged money from the fund would go towards apprenticeships as part of his general election campaign. However, the government’s pre-existing target of creating three million apprenticeships did not increase after the money was allocated.
The Department of Education, says the report, “was not directed to use the £200 million to pursue a specific policy to deliver apprenticeships.”
The NAO’s investigation also found that £196 million-worth of grants given out by the MoD between 2012 and 2015 did not have any terms and conditions attached to them.
Instead, says the report, “successful applicants received a letter from the Chancellor stating that they would receive the money to carry out the task they had requested money for.”
Until autumn 2016, neither the Treasury nor the MoD planned to monitor that this occurred, nor the impact of the grants.
An ongoing investigation, commissioned by the Treasury earlier this year, about how money given to 639 different charities has been spent has produced few results so far, because the information held differs from grant to grant.
Most grants have gone to charities related to the Armed Forces, such as accommodation for veterans, research and memorials, and other emergency services charities.
A Department of Education spokesperson said: “The £200 million in Libor fines allocated to the department in the 2015 budget has been invested in the government’s flagship apprenticeship programme. The funding is helping to create three million high-quality apprenticeship starts in England by 2020.
“We have already reached over a million apprenticeship starts since May 2015, meaning more people than ever before are benefiting from the life changing skills apprenticeships bring.”
Fines the Libor Fund is composed of:
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