The production and distribution of cash

HM Treasury should set out more clearly the specific outcomes it wants the cash system to deliver for consumers and small businesses and how this should be balanced against the costs of doing so. It should review and where necessary amend the roles and responsibilities of participants in the cash system to ensure that individual responsibilities will, in aggregate, deliver the overall outcome.

HM Treasury should assign clear responsibility for bringing together and reporting information on how well the cash system overall is performing in meeting the government’s policy objectives. HM Treasury, working with the regulators, should develop a system for monitoring and reporting progress across the whole cash system. The system should include a better understanding of the impact of a changing cash system on: • different groups in society and on different parts of the country; and • businesses wishing to use cash and on trends in the acceptance of cash by businesses more generally.

HM Treasury, working with the public bodies and learning lessons from recent experience during the COVID-19 emergency, should have a plan in place to take action if some groups become left behind as the cash system changes. The plan should include, for example, taking a more systematic approach to addressing some of the barriers that might lead to exclusion or detriment, raising awareness of the range of options for accessing cash and facilitating access to other payment methods.

The Mint and the Bank should maximise opportunities to learn from each other’s experiences of cash production and work with the wider distribution system, for example working closely with industry, and making best use of available production capacity.

The Bank, working with other public authorities, should improve its understanding of both the factors that are driving the increase in demand for notes, and also who is holding the approximately £50 billion worth of notes where there is currently a lack of information. This work might help inform wider policy, for example on tax evasion.

The Bank should review its processes for deciding the appropriate level of contingency stocks and ensure that the factors weighed in reaching those judgements, along with the associated cost implications, are brought together and fully documented.