Background
The government uses Financial Transactions (FTs) such as loans and equity investments to deliver policy objectives. To manage the scale and complexity of these transactions, HM Treasury introduced the Financial Transaction Control Framework (the Framework) in the 2024 Autumn Budget.
The Framework introduces enhanced controls to help improve governments management of FTs. A key control in the Framework requires all large-scale FT programmes to be delivered by Public Financial Institutions. Public Financial Institutions are organisations which HM Treasury considers best placed to manage FTs effectively, and who meet specific criteria included in the Framework. Other controls in the Framework include targeted risk-adjusted returns, and annual public reporting on the government’s investment portfolio.
In the 2025 Spending Review, the government set out plans to further increase its use of FTs, raising the total FT budget by £9.6 billion to £26.4 billion for the period 2025-26 to 2029-30.
Scope
This study will focus on the set-up and the application of the Framework.
It will consider:
- the central strategy and planned oversight of the Framework
- the Framework’s coverage
- the Public Financial Institutions’ implementation of the Framework
NAO team
Director: Simon Reason
Audit Manager: Rachel Fenn