The Government is changing the rules so that fines from banks and other financial services firms no longer go to the industry.
The Government is changing the rules so that fines from banks and other financial services firms no longer go to the industry. It has today announced that £35 million of fines imposed for attempted LIBOR manipulation and other unacceptable behaviour will be used to support Britain’s Armed Forces community.
Revenue from penalties, which has been received from the financial sector this year in excess of enforcement case costs, will be used to support the British Armed Forces through the Armed Forces Covenant.
This new funding will be allocated by The Armed Forces Covenant Reference Group across areas such as: Healthcare, Mental Healthcare, Housing, Education, Support after Service, Family Life and Care in Service, Family Life and Responsibility of Care, and Recognition.
This builds on action already taken by the Government to ensure a fair deal for the Services, including: doubling the Operational Allowance for troops on operations; doubling the Families Welfare Grant; and doubling the rate of council tax relief for personnel serving on operations.
Notes for editors
The Armed Forces Covenant was set up in 2011 to redress the disadvantages that the Armed Forces community faces in comparison to other citizens, and to recognise the sacrifices that they have made. It focuses on areas such as Healthcare, Housing, Education, Support after Service, and Family Life. In addition, the Community Covenant Grant Scheme operates at local level with charities, volunteer groups, and public bodies to strengthen ties between the Armed Forces and the communities in which they live.
The Armed Forces Covenant Reference Group, comprising of representatives from central government, service families federations, local government and charities, will allocate the funding. This does not change the existing process for new bids for funding through the Community Covenant Fund, set up in 2011 to support engagement between services and their local communities. These bids can be made by any part of the community, including volunteer groups, charities, public bodies such as schools, etc.
The Reference Group has charitable representatives from COBSEO - The Confederation of Service Charities (members include ABF: The Soldiers Charity, Help for Heroes, Combat Stress, RN &RM Charity, Blind Veterans UK, Veterans Scotland, etc.), the Royal British Legion, the Soldiers, Sailors, Airmen and Families Association - Forces Help, and the War Widows Association of Great Britain.
The additional funding can be made available in 2012-13 due to amendments which will be brought forward tothe Financial Services Bill later this year. The amendments will mean that, in future, regulatory fines revenue in excess of enforcement case costs for the year will go to the Exchequer.
The new arrangements will apply to all fines imposed by new Financial Conduct Authority and Prudential Regulation Authority; and to fines imposed by the Bank of England in the course of exercising its regulatory powers in relation to financial services.
Compliant financial services firms will still be protected from paying costs directly attributable to the misconduct of others, as the regulators will be able to cover enforcement case costs for the year from penalties before revenue is passed to the Treasury. However, in future any benefit above these costs will go to the taxpaying public, rather than the financial services industry.
The new arrangements will apply to fines received from 1 April 2012, so the measure will include the penalty imposed on Barclays in relation to the attempted manipulation of LIBOR.