Treasury

HM Treasury has agreed additional resource DEL and capital DEL funding of £88,414,000 for National Savings and Investments (NS&I) as part of spending review 2025 phase 1 during the 2024 autumn Budget. The additional resource supports NS&I’s business transformation programme which will see it transition to a modernised operating model, with multiple service delivery partners. The funding also supports the capital DEL requirements for NS&I’s moving between offices in London.

Parliamentary approval for additional resource of £40,630,000 and capital of £17,120,000 has been sought in a supplementary estimate for NS&I. Pending that approval, urgent expenditure estimated at £57,750,000 will be met by repayable cash advances from the Contingencies Fund.

[HCWS453]

I can announce today the conclusion of a Bank of England and HM Treasury five-yearly review of the Bank’s capital framework parameters, as set out in section 2B of the Bank and HM Treasury financial relationship memorandum of understanding.

The review concluded that:

The capital framework has been effective in delivering its intended objectives at inception in 2018: to ensure that the Bank is equipped with capital resources consistent with the monetary and financial stability remits it has been given by Parliament.

The existing parameters of the capital framework remain adequate to support the Bank’s balance sheet.^[1]

The existing Bank-HMT financial arrangements, as set out in the MoU, are sufficient to support the bank’s planned transition to a demand-driven operating framework fully backed by repo.^[2]

The Bank and HM Treasury will keep these arrangements under review during the Bank’s balance sheet transition to a new steady state in coming years, ensuring close engagement as per the existing governance and information sharing channels set out in the MoU.

The Bank and HM Treasury have updated the MoU accordingly, and this can be accessed at https://www.gov.uk/government/publications/memorandum-of-understanding-between-hm-treasury-and-the-bank-of-england-2025

^[1] The parameters of the capital framework include a target, a floor, and a ceiling. As set out in the 2018 letter from the Governor of the Bank of England to the Chancellor, the values of the capital parameters are £0.5 billion for the floor, £3.5 billion for the target and £5.5 billion for the ceiling. This letter can be accessed at https://www.bankofengland.co.uk/-/media/boe/files/letter/2018/governor-letter-210618.pdf