To improve transparency and fiscal risk management, UK Government Investments (UKGI) publishes an annual report on the government’s contingent liability portfolio. This report presents a consolidated view of that portfolio, providing a comprehensive picture of the government’s risk position to inform future policy decisions and highlight opportunities to manage the portfolio more effectively.
The report aims to:
- examine how the scale and composition of the contingent liability risk has changed over time;
- assess the impact on the government’s liabilities of a specific downside stress scenario; and
- assess whether the government charges adequately for the risk it takes.
This year’s report continues to support the move to a portfolio based approach to managing fiscal risk. It provides an analysis of key drivers of risk and areas of sectoral concentration, and considers how risks may interact and crystallise simultaneously. Applying a downside stress scenario gives a measure of potential impact and provides a year-on-year comparison. The key findings in this year’s report are as follows:
- As at 31 March 2025, the expected cost of the government’s contingent liabilities was £268bn.
- The portfolio has increased by £18bn (7%) since last year, driven mainly by an £8bn rise in exposure relating to the Infected Blood Compensation Scheme.
- Nuclear decommissioning and NHS clinical negligence provisions continue to dominate the portfolio, accounting for £185bn (almost 70%) of total expected cost.
UKGI will continue to work closely with departments and HM Treasury to strengthen the management of contingent liabilities across government. By improving data, analysis and foresight, this report supports a more resilient, sustainable and accountable approach to managing fiscal risk on behalf of the taxpayer.
It is one facet of FInTAG’s work to examine, report and advise on government’s contingent liabilities. UKGI will use the data and insights from this report to support government departments and HM Treasury when assessing proposals for new contingent liabilities and in managing the existing portfolio.
– Siobhán Duffy, Director of UKGI’s Financial Instruments and Transactions Advisory Group (FInTAG)
Read more about FInTAG’s work on the website page Financial Instruments and Transactions – UK Government Investments (UKGI)
