Lord Temple-Morris – 2014 Parliamentary Question to the HM Treasury
The below Parliamentary question was asked by Lord Temple-Morris on 2014-06-09.
To ask Her Majesty’s Government what steps they have taken over the last year to move their accounts from foreign-owned to state-owned banks .
Lord Deighton
The policy is to hold exchequer funds safe and secure at the Bank of England and minimise balances held with commercial banks. This policy has not changed and HM Treasury has been working with departments to minimise balances held in commercial accounts in recent years.
Government Departments and most public bodies bank with the Government Banking Service. The Government Banking Service is a directorate within HM Revenue & Customs. It is a shared service which manages contracts and supports banking services to Government departments using cost efficient and modern commercial banking platforms. The balances held by the Government Banking Service are utilised to reduce the Government’s daily borrowing requirement and in turn its financing costs.
The Government Banking Service undertook an EU Procurement exercise for government transactional banking services in March 2008 following the decision by the Bank of England to exit from retail services. This resulted in the award of contracts to the two most economically advantageous tenders, the Royal Bank of Scotland Group (RBSG) and Citigroup (Citi).
A procurement exercise is currently under way to replace these contracts at expiry and again will comply fully with relevant EU regulation. Contract notices in this respect were issued on 9th June 2014 and Invitations to Tender will be made in early October with expectation of contract award in early 2015.
In the rare circumstance where banking is required outside of the contract then the Department concerned must seek Treasury approval to open separate commercial accounts. This will normally be where third party funds are being managed or the banking service required is complex. The Treasury provides an annual update to the Public Accounts Committee on monies held outside the Exchequer/Government Banking Service. The most recent update published in 13 January 2014 and a link to the publication is
https://www.gov.uk/government/publications/treasury-minutes-january-2013
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