The National Audit Office (NAO) has slated the government’s handling of the £973m Libor Fund, which makes charity donations from fines paid by banks for manipulating key benchmarks, saying it is unclear whether the money has been used as intended and whether a commitment to fund additional apprenticeships has been met
The audit watchdog says that up to September 2017, the government had committed £933m, largely to armed forces and emergency services charities, of which £141m has yet to be distributed. That £141m will be used to support the Covenant Fund, a scheme that will make grants up to £10m per year in perpetuity and is currently funded by the Libor Fund.
The Treasury and the Ministry of Defence (MoD) have distributed £592m of the fund to a range of different causes. So far, 729 grants have been awarded to 639 charities and causes. The average grant was £800,000.
However, the NAO found that not all grants from the Libor Fund had terms and conditions attached to them as standard until Autumn Statement 2015. Between October 2012 and July 2015, the Treasury made 67 grants totalling £272m, of which £196m was given out without any terms and conditions.
The NAO says the Treasury and the MoD cannot yet confirm that charities spent all grants as intended. Currently the MoD is conducting a retrospective review of all grants awarded since 2012 to ensure that they were spent correctly.
In addition, in April 2015, the then Prime Minister David Cameron pledged £200m of the fund to support 50,000 new apprenticeships for unemployed 22-24 year olds, but the Department for Education is unable to demonstrate that these have been delivered.
The NAO says although the money was used to fund apprenticeships in general, the government did not report any increase in its already announced three million target. The Department for Education, now responsible for apprenticeships, was not directed to use the £200m to pursue a specific policy to deliver apprenticeships for unemployed 22-24 year olds and cannot demonstrate whether 50,000 new apprenticeships for this group have been provided
Currently £40m of the Libor Fund is still held by the Treasury, but is yet to be committed.
The NAO says the government cannot yet demonstrate the impact the Libor grant fund has had as it has not been evaluating the impact of the grant schemes on the charity sector. It has committed to completing an external evaluation by December 2018, by which time over 80% of the fund will have been awarded.
The MoD is now using a grant from the Libor Fund for a project to help understand the needs of the Armed Forces community. This will inform the distribution of the £141m in the Covenant grant scheme.
NAO’s report, Investigation into the management of the Libor Fund
Report by Pat Sweet
