Trading fund

Content sourced from Wikipedia, licensed under CC BY-SA 3.0.

A government trading fund is a part of a government department that runs its own finances like a business. It can use its own income to pay for its day-to-day costs, rather than needing regular funding from Parliament.

In the UK, trading funds were created by the Government Trading Funds Act 1973 and later changed by the Government Trading Act 1990. To set up a fund, the department and the responsible minister must get consent from HM Treasury, and at least half of the fund’s income must come from charging for goods or services it provides. Once established, a trading fund finances its operations from its receipts and does not usually need ongoing funding from the legislature. Some funds mainly collect and share information for public or private use; others do not.

The idea is to give government departments more flexibility and better efficiency in managing resources. A Hong Kong example follows a similar model, with decisions made by the Legislative Council on the Financial Secretary’s recommendation. If a trading fund were created for the Mint, special arrangements would apply to money related to coinage.