Contingencies Fund

34.22An exception to the rule that Parliament must vote money for a service before any expenditure is incurred is provided by the Contingencies Fund. The Treasury can authorise issues out of this Fund up to a limit fixed by statute to meet expenditure in advance of the granting of authority by Parliament. At present the limit is 2 per cent of the total Net Cash Requirement for the year ending on the previous 31 March authorised by Supply and Appropriation Acts passed before that date.1 The main circumstances in which the Fund is used are to meet expenditure (other than on new services) in excess of the amount granted in a Vote on Account; to meet (until a Supplementary Estimate is available) expenditure on unforeseen new services; to meet further expenditure on existing services when the provision for the Net Cash Requirement for the Estimate is exhausted; and to finance working balances over the turn of the financial year. The accounts of the Fund are presented annually to the House of Commons in pursuance of an order for a return and each instance of recourse to the Fund is reported to Parliament.

By propriety rather than by law, no final charge is permitted to rest on the Fund, and Parliament is invariably asked to authorise the necessary expenditure in due course to enable repayment to be made. If expenditure requiring specific legislation necessitates the use of the Fund, recourse to it is deferred until the bill has had a second reading.2

Footnotes

  1. Contingencies Fund Act 1974 (c 18), s 1(1).
  2. HC Deb (1974) 873, c 1250.