Soldiers and police force members were threatened with prison if they did not repay loans between £200 and £500
Navy sailors forced to take out loans after being shorted on pay
Sailors who were shorted on their pay during a controversial bonus scheme have had to borrow up to £800 by the time they are currently being paid back.
This is being done to “settle debts owed by the MoD”, even though military chiefs and MPs have condemned the “grossly inappropriate” tactic.
A British soldier recently had to take out a personal loan after MoD bosses put him in a position where he would be unable to afford to pay his mortgage or child support bills.
Some members of the armed forces have also been threatened with prison if they did not repay loans of up to £500 offered by businesses they have not worked for.
Now the MoD has confirmed that sailors have had to apply for a loan from a service lender before being paid back on time by the Department for Work and Pensions.
A MoD spokesman said: “We operate the award in accordance with formal MoD regulations.”
It is understood that MoD banks are able to make loans using bank card payments, because the money is owed to the public sector institution, but that sailors were told they would be able to apply for loans directly.
“A naval banking partner is carrying out the collection and arrangements,” the MoD spokesman said.
A report by the National Audit Office (NAO) published on Thursday said more than £2bn was stolen from the defence budget in just three years. The officer who wrote the report, Dan Creedon, who was also chief executive of the NAO, said the “shocking” scale of pilfering had placed national security at risk.
His report comes after the MoD was accused of unfairly withholding four bonuses worth up to £7,000 a year from loyal members of the armed forces who served in Afghanistan. This was after coalition defence ministers awarded additional payouts to military personnel who fought in Iraq and Afghanistan after coming under fire for refusing to pay bonuses to troops who had not fought in a frontline battle.
Nato pilots were told to take out £100,000 worth of loans to help pay for the civil liberties breaches they endured while serving in Afghanistan.
A further £1.5m was paid to Forces personnel who were paid lower bonuses, as defence chiefs were also accused of wrongly withholding two bonuses from Royal Marines based at Tidworth in Wiltshire.