1.5 Bank Of England
The Treasury's programme includes provision for payments to the Bank of England to cover the costs of:
The Expenditure forms a non-voted cash limit.
Under Section 1(4) of the Bank of England Act 1946, an annual payment in lieu of dividend is paid to the Treasury. For the year ended 29 February 1996 this amounted to £88.0 million. Details concerning the Bank's performance across its full range of activities may be found in its Annual Report and Accounts published in May each year.
The Bank's main aims in respect of note issue are to:
During the year, the refurbishment of the printing works was completed without any loss of production, in spite of significant problems with asbestos removal; and the actual cost of new notes fell by one per cent, although the unit price, weighted by work content and in constant prices, fell by two per cent.
The Bank will introduce a new system for counterfeit note registration in March 1997 which will significantly reduce the cost of police involvement in the reporting of counterfeit notes retrieved from untraceable sources.
The operational costs of the Registrar's Department declined significantly during the period 1989 to 1994. The greater than anticipated reduction in account numbers since then has seen some increase in unit costs.
Following a joint Treasury/Bank benchmarking exercise which showed that the cost of registration in the private sector was lower than the cost within the Registrar's Department and the National Savings Stock Register, the Bank has taken steps to bring down the costs of gilt registration towards private sector levels. When implemented, these measures should bring costs down to around £4.60 per account (excluding central overheads).
The Bank has also agreed to hold the unit cost of registration at around £4.60 even if activity declines further, as predicted. It has also been agreed to examine the option of a merger of the National Savings Stock Register (NSSR) into the Registrar's Department.
The percentage of government securities held though the Central Gilts and Moneymarkets Office is now 90.2 per cent by value, whilst activity levels on the Bank's register have continued to decline (see Table 1J).
Table 1J Bank of England Debt Management Indices
86/87 87/88 88/89 89/90 90/91 91/92 92/93 93/94 94/95 95/96 96/97
Ests.
Accounts 100 94.5 87.0 79.7 73.2 67.3 60.8 56.8 51.7 46.4 42.5
Transfers 100 124.8 108.6 85.6 86.2 74.4 92.9 85.5 86.5 79.5 64.2
Manpower 100 101.7 100.5 90.4 75.7 69.5 62.7 54.5 52.6 43.9 35.1
Stock in CGO 19.5 25.6 38.3 35.5 56 71.6 80.3 84.1 87.2 90.2 -
(per cent)
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The Bank aims to manage the Exchange Equalisation Account consistent with the Government's policy objectives and within the scope of the governing legislation. Reserves management decisions are carried out with the aim of conserving the value of the reserves and ensuring that funds are available when needed.
In conjunction with the Bank, the Treasury has continued to improve management information systems to assist in the monitoring of decisions affecting the investment of the reserves.
The following appointments and re-appointments were made to the Bank of England:
Table 1K Appointments and re-appointments to the Bank of EnglandAppointments and reappointments to the Board of Banking Supervision
Date Name Appointment Ends
1 March 1996 MDKW Foot Ex-officio member 2000
1 July 1996 Sir Andrew Large Independent member 2001
1 September 1996 Sir David Scholey CBE Independent member 2001
4 November 1996 Harry Taylor Independent member 2001
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