Commissioners for the Reduction of the National Debt - Debt Reduction
Little remains of the Commissioners’ original function of debt reduction - the full remnants of the earlier sinking fund concept having been removed by the National Loans Act 1968. However, a specific sinking fund was still in operation under the terms of the prospectus to repay 3½% Conversion Loan, until the bond was redeemed on 1 April 2015.
One of CRND's best-known functions in this respect is the administration of the donations and bequests made by the public for the specific purpose of reducing the UK national debt. Any such gifts to the nation, in the form of cash, securities and/or other chattels (e.g. property) are processed by CRND - sometimes with the assistance of Treasury Solicitors - through the Donations & Bequests Account maintained at the Bank of England. The cash proceeds of such gifts are used to purchase, and periodically cancel, existing gilts from the market, thus reducing the amount of debt outstanding accordingly.
In 1808, a scheme for converting permanent into terminable debt was introduced, empowering the Commissioners to sell life annuities. The arrangement lasted, with modifications, for more than 150 years, the constant feature being that the purchase money was used to cancel gilts while the Exchequer paid the annuity instalments. The 1962 Finance Act repealed the power to grant further annuities but CRND retains responsibility for paying the quarterly instalments of the existing annuities to the few remaining claimants.