The Contingencies Fund Act 2021 (2021 c. 9) is an act of the

Parliament of the United Kingdom The Parliament of the United Kingdom is the supreme legislative body of the United Kingdom, the Crown Dependencies and the British Overseas Territories. It meets at the Palace of Westminster, London. It alone possesses legislative suprema ...

which allowed for a temporary increase in the maximum capital of the United Kingdom's

contingency fund A contingencies fund or contingency fund is a fund for emergencies or unexpected outflows, mainly economic crises. European Union The European Union created a vast contingency fund in 2010 to counteract the Great Recession. India The Constituti ...

from 2%, as set out in Section 1 of the Contingencies Fund Act 1974, to 12%. It was introduced by Chancellor of the Exchequer Rishi Sunak in response to the ongoing effects of the COVID-19 pandemic.

Background

The Contingencies Fund was established in 1862 by

HM Treasury His Majesty's Treasury (HM Treasury), occasionally referred to as the Exchequer, or more informally the Treasury, is a department of His Majesty's Government responsible for developing and executing the government's public finance policy and ...

, and allows governmental departments to access cash advances when money for urgent matters is likely to achieve parliamentary approval, but is needed quickly. Usually, the Contingencies Fund Act 1974 requires that the permanent capital of the fund not exceed 2% of the authorised supply expenditure of the previous financial year. Because of the effects of the coronavirus pandemic, the

Contingencies Fund Act 2020 The Contingencies Fund Act 2020 (c. 6) is an act of the Parliament of the United Kingdom that 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 19 ...

increased the fund's limit from 2% to 50% but was due to expire on 1 April 2021; this legislation provides an extension to the fund limit increase.

Passage through Parliament

The bill was introduced in the

Commons The commons is the cultural and natural resources accessible to all members of a society, including natural materials such as air, water, and a habitable Earth. These resources are held in common even when owned privately or publicly. Commons c ...

for its

first reading A reading of a bill is a stage of debate on the bill held by a general body of a legislature. In the Westminster system, developed in the United Kingdom, there are generally three readings of a bill as it passes through the stages of becoming, ...

on 9 March 2021. It had its second and third readings on 11 March, and was passed to the Lords for its first reading the same day. The bill passed all its remaining readings on 12 March and was given

royal assent Royal assent is the method by which a monarch formally approves an act of the legislature, either directly or through an official acting on the monarch's behalf. In some jurisdictions, royal assent is equivalent to promulgation, while in oth ...

on 15 March.

Provisions

The Act's sole provision was a temporary increase to the contingency fund limit set out in the Contingencies Fund Act 1974 from 2% to 12% (increasing the fund from £17.5 billion to £105 billion). The increase automatically expires on 1 April 2022.

References

{{COVID-19 pandemic in the United Kingdom, Crown Dependencies and British Overseas Territories United Kingdom Acts of Parliament 2021 COVID-19 pandemic in the United Kingdom Law associated with the COVID-19 pandemic in the United Kingdom Economic responses to the COVID-19 pandemic