Records of the UK Debt Management Office

Division within NDO

1987-2007

Records of the United Kingdom Debt Management Office relating to the establishment of the UK Debt Management Office and the formulation of policy.

Files covering the planning and establishment of the UK Debt Management Office are in NDO 23.

Formulation of policy and decision-making files are in NDO 24.

Public Record(s)

English

2 series

Topics

National debt

The UK Debt Management Office (DMO) was established on 1 April 1998 as an executive agency of the Treasury, with two main functions: to act as the Government's debt manager, and its cash manager. Its brief is to carry out the Government's debt management policy of minimising financing costs over the long term, taking account of risk, and to manage the aggregate cash needs of the Exchequer in the most cost-effective way.

The significant decision in 1997 to transfer monetary policy to the Bank of England while the Treasury retained control of fiscal policy led to the creation of the DMO. In April 2000 responsibilities for Exchequer cash management was transferred to the DMO. The DMO assumed responsibility for issuing Treasury bills from this date. In July 2002 the operations of the Public Works Loan Board (PWLB) and the Commissioners for the Reduction of the National Debt (CRND) were integrated with the DMO.

The United Kingdom Debt Management Office has four areas of responsibility:

Gilt Markets: Gilts are UK Government securities issued by HM Treasury. Since April 1998 gilts have been issued by the DMO on behalf of HM Treasury. The DMO took over gilt issuance from the Bank of England, following the transfer of responsibility for setting interest rates from HM Treasury to the Bank in May 1997.Money Markets: The DMO took over full responsibility for Government Exchequer cash management, from the Bank of England, on 3 April 2000. The cash management remit is published annually by the Treasury and its cash management objective is to ensure that sufficient funds are always available to meet any net daily central government cash shortfall and, on any day there is a net cash surplus to ensure that this is used to best advantage. The DMO’s role is to make arrangements for funding and for placing net cash positions, primarily by carrying out market operations in the light of forecasts provided by HM Treasury of daily net cash flows into or out of the National Loans Fund (NLF). The DMO’s objective in carrying out these operations is to minimise the cost of offsetting the Government’s net cash flows over time, while operating in a risk framework approved by ministers. In doing so the DMO seeks to avoid actions or arrangements which would undermine the efficient functioning of the sterling money markets or conflict with the operational requirements of the Bank of England for monetary policy implementation. The Exchequer's cash flow has a fairly regular seasonal and monthly pattern; but it is also subject to considerable uncertainty, associated largely with unpredictability in the timing of some tax and expenditure flows.Local Authority Lending: The Public Works Loan Board (PWLB) is a statutory body operating within the United Kingdom Debt Management Office whose function is to lend money from the National Loans Fund to local authorities, and to collect the repayments.Public Sector Funds: the Commissioners for the Reduction of the National Debt (CRND) is a statutory body (under the UK DMO) whose main function is the investment and management of government funds.