Was Money Intended For Military Charities Used To Cover Government Shortfalls?

The Treasury has denied reports that it Ministers from other departments have dipped into the so-called “Libor fund” to cover shortfalls in their budgets.

The fund was established in 2012 from fines paid by banks over the Libor interest rate-rigging scandal, which then-Chancellor George Osborne said would be distributed to “Armed Forces and Emergency Services charities”.

However, it's emerged that £200m was used by the Department for Education and it is claimed that another £160m was used to improve Army barracks, fund rehabilitation centres and install sports facilities on military bases - things that many assume is covered by taxpayers money.

Tory MP and former Army Captain Johnny Mercer said:  

"The amount that has been wasted here is almost criminal. A strategic opportunity has been lost, and I feel very bitter about it.

"This is vital public money, that George Osborne specifically targeted at a certain group who have served this country, not to bail out budgets elsewhere.

"I am going to ask the defence committee if we can conduct a full inquiry into what happened to the Libor fund."

Shadow Defence Secretary Nia Griffith said:

"We know that the defence budget is in a complete mess, but this does not justify ministers plundering money that was meant for charity to plug gaps in the MoD’s books.

"I will be writing to the Defence Secretary to demand an urgent explanation of why this has happened and a guarantee that this scandal will not be repeated."

An HM Treasury Spokesperson told Forces News:

“Armed Forces, emergency services charities and other related good causes benefit from hundreds of millions of funds from LIBOR banking fines.

“Money given to Departments since 2012 from these fines is ring-fenced to be spent on these worthy causes.

“Funding for centres and facilities is consistent with supporting good causes and is making a difference to the Armed Forces community.”