Form a government by late summer or the money runs out – Treasury

Politicians elected in May will have until late summer to form a government before the money runs out, according to Treasury documents published last month.

Polling suggests that the general election will result in a hung parliament and that a coalition will be needed to create a government and agree a legislative programme to be outlined in the Queen’s speech.

According to Treasury documents, a Queen’s speech would need to be agreed by a date in late summer – thought to be 5 August – so parliament could vote to release more Treasury money for the government to spend.

In February, parliament authorised funds to last until late summer by passing a “vote on account”, but the money needed for the rest of the year needs to be approved by parliament in the next financial year, so after 1 April.

Parliament usually passes the “main supply estimates” in July, but if a government is not formed by then it would be unable to do so.

According to the document, the vote on account, passed in February, provides “resources, capital and cash to allow existing services to continue operating during the early months of the coming financial year”.

“The definition of ‘existing services’ is a service for which parliament has given its approval before 31 March, ie in the current year.”

Although it is highly unlikely that the UK could experience a US-style budget crisis – such as the one in 2013 that led to a government shutdown – the situation is likely to put a time limit on any coalition negotiations.

The largest party after May’s election could form a minority government, propped up by a confidence and supply arrangement with a smaller party. This would mean that a smaller party would vote to release money that would allow a government to enact its policies.

Powered by article was written by Frances Perraudin, for on Monday 23rd March 2015 23.24 Europe/ © Guardian News and Media Limited 2010