Contingencies Fund Act 2020


The Contingencies Fund Act 2020 was created to increase the maximum capital of the United Kingdom's contingency fund from 2%, as set out in Section 1 of the Contingencies Fund Act 1974, to 50%. It was introduced by Chancellor of the Exchequer Rishi Sunak in response to the COVID-19 pandemic.

Background

The Contingencies Fund was established in 1862 by HM Treasury. It originally consisted of a fixed amount of capital which was increased over time and by 1945 had reached £1.5 million. Before this legislation, the Contingencies Fund Act 1974 required that the permanent capital of the fund not exceed 2% of the authorised supply expenditure of the previous financial year. The fund provides cash loans to government departments.
Due to the COVID-19 outbreak, this legislation raises the limit to 50%.

Provisions

Section 1

Increases the limit from 2% to 50%, automatically expiring on 1 April 2021.