The National Audit Office’s investigation into the Libor Fund has revealed a catalogue of failures including a lack of transparency over where the money has been distributed and how it is being spent, with millions still be to awarded.
The total amount allocated to the fund so far is £973 million, collected from fines to banks that manipulated Libor for profit as well as foreign exchange markets following international investigations in 2012 and 2015. However, questions from the government and the media over the transparency of how the money has been so far distributed led to the NAO investigation, the findings of which were published on 8 September.
On spend, key findings include:
- The Government has committed £933 million from the Libor Fund, but cannot yet confirm that all the money has been used as intended. 729 grants have been awarded to 639 charities and causes, with an average grant of £0.8 million. However, HM Treasury and the MoD cannot confirm that charities spent all grants as intended, and the MoD is now conducting a retrospective review of all grants awarded since 2012 to this effect.
- In fact, of the £933 million committed to the fund, £141 million committed to the Covenant Fund has yet to be spent, while £40 million of the Libor Fund is still held by the Treasury, and has yet to be committed to any scheme.
- Of the £592 million distributed through grants, two thirds (£385 million) has been awarded following requests for funding made directly to the Chancellor of the Exchequer from charities, MPs and government departments. The remaining £207 million was spent through competitive application processes managed by the Treasury and MoD.
- The government also cannot demonstrate the impact the Libor grant fund has had, due to a failure to evaluate 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.
- Despite the Government pledging £200 million of the Fund to support 50,000 new apprenticeships, the Department for Education was not directed to use the £200 million 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.
- Terms and conditions were not attached as standard to all grants until Autumn Statement 2015. Between October 2012 when the first HM Treasury Libor grant was awarded up to and including the summer budget in July 2015, 67 grants totalling £272 million were made by HMT and other departments from the HMT Libor scheme. £196 million of the £272 million grants were given out without any terms and conditions attached of which HMT state that £139 million did not require them.
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