Records created or inherited by HM Treasury

Origins and History of the Treasury

In origin the Treasury is an offshoot of the medieval Exchequer, whose presiding Officer became the Treasurer. Initially, his functions were discharged chiefly in the Exchequer, giving directions or carrying into execution writs of the sovereign for anything to be done on the Receipt and the Accounts side. In the course of time his other duties gradually interfered with his attendance at the Exchequer. This led to the creation of a new system, whose ultimate effect was to convert the Treasury into a separate department of state giving directions to the officers of the Exchequer by writs and written orders. The process was gradual, and its beginnings may be attributed to the period of the Marquess of Winchester's tenure of the office of Lord Treasurer (1551-1572). Lord Burghley, his successor, owing to his many duties as head of government, came to sit less and less at the Exchequer and transmitted his orders in writing to that court through a secretary.

The most important factor in the growth of the Treasury in the seventeenth century was the gradual shift from the employment of a single Treasurer to the use of commissions. It now became necessary for written documents to be adopted for the satisfaction of the officers of the Receipt who could not take orders from a plurality of persons. It came to be the established practice that no writ or sign manual warrant could be executed without a written warrant from the Lord Treasurer or commissioners of the Treasury for the answering of it by payment out of the Receipt of the Exchequer. The necessity of recording the several acts of the board also saw the introduction of the various series of warrant books.

Early commissions were committees of the Privy Council, composed entirely of privy counsellors. In 1667 a new type of commission was appointed, including none of the principal privy counsellors save the Chancellor of the Exchequer. This departure set in motion the rise of the First Lord of the Treasury Commission to the position of the leading minister of the Crown and the decline of the Lord Treasurer, as well as the slower development by which the Chancellor of the Exchequer became the working head of the Treasury. The secretary of the 1667 instituted the first regular system of Treasury records keeping with separate warrant, order and letter and minute books.

An order in Council of 31 January 1668 established exclusive Treasury control over the revenue and departmental expenditure, and by the end of the century its control over petitions and civil establishments was secured. By this time it had grown from the personal retinue of the Lord Treasurer to a professional body of civil servants. As the Exchequer became moribund, the Treasury took over its functions and combined them with those of parliamentary management. In 1707 the Treasury became, as a result of the Union with Scotland, the Treasury of Great Britain, and since 1816 it has been the Treasury of the United Kingdom.

In 1714 the Treasury was put in commission and has remained so ever since. The lords commissioners met as a board to discuss matters of financial detail until the middle of the nineteenth century. Thenceforward it has for practical purposes come to have the shape of a ministerial department headed by the Chancellor of the Exchequer, retaining its character as a board for formal acts only, though it maintains a special relationship with the Prime Minister as First Lord.

Treasury Functions

The Treasury is a prerogative department and many of its powers are not derived from statutes. It is responsible for the control and management of the entire public revenue and its expenditure. The character and extent of this control have varied from time to time, developing with the extension of parliamentary control of the finances of the country. It is primarily a policy department and now operates widely over the whole range of national financial and economic issues. It is responsible to Parliament for the imposition and regulation of taxation, monetary policy, overseas finance and, in recent years, economic co-ordination.

It is also the primary instrument for controlling expenditure by government departments of the money voted by Parliament. Annual estimates of departments are submitted for Treasury scrutiny and approval before being presented to Parliament.

In addition to, and associated with, its financial responsibilities the Treasury had been the controlling and co-ordinating department for all matters connected with the management, pay and conditions of the Civil Service since the mid-nineteenth century.

At various times the Treasury has also had responsibilities for imperial standards, university matters and sponsorship of the arts and national museums and galleries.

Treasury Organisation

Prior to 1782 Treasury business relating to expenditure was divided up amongst the Treasury clerks on the basis of expected fees. In a reorganisation of that year business was arranged in six fixed divisions. The Revenue side of the Treasury's work was undertaken by a separate Revenue department, which was integrated into the main divisional structure in 1834. In 1834 there were five divisions. Thereafter the number of divisions varied from time to time but until the First World War the basis of Treasury organisation was the 'mixed division', by which the allocation of responsibilities for control of expenditure was on the principle that each division dealt with all the affairs of a group of departments. Afterwards this structure was gradually modified as it became necessary to set up a number of specialist divisions to consider important questions arising in all departments.

A major reorganisation in 1919 created three functional departments: Finance, Supply and Establishments, each headed by a Controller. It now became general practice for each department to obtain Treasury sanction for expenditure from two divisions - one dealing with staffing, the other with all other expenditure. This principle was not universally applied and although other functional divisions, notably those relating to Economic Planning, were added to the Treasury organisation, some 'mixed divisions' remained to deal with both supply and establishment questions of certain departments, chiefly those whose expenditure was not large. In the reorganisation of November 1962 the 'mixed divisions' were abolished and the distribution of duties was for the first time based almost entirely on functions. The Pay and Management Side, consisting of a Pay Group and a Management Group, now dealt with establishment matters; economic planning and control of expenditure were the responsibility of a Financial and Economic Side, comprising Finance, Public Sector and National Economy Groups and an Economic Section. The Pay and Management Side (with the Ceremonial Branch) was transferred to the new Civil Service Department in 1968.

In October 1975 an internal management review resulted in a reorganisation of the departments responsible for the National Economy into four major sectors. These were the Chief Economic Adviser's Sector, the Overseas Finance Sector, the Domestic Economy Sector and the Public Services Sector. A new Central Unit was also set up with the task of policy co-ordination and the management of budgetary and other measures spanning the responsibility of more than one group.