How does HM Government spending take place? A Thread:

HM Government spending begins in Parliament via various annual legislative mechanisms: Supply and Appropriation Bills (Main Estimates) and Supply and Appropriation (Anticipation and Adjustments) Bills.

As per the Exchequer and Audit Departments Act 1866, S.15 para.2, HM Treasury places a request, known as a requisition, with the Comptroller and Auditor General, who first scruntinises and then grants HM Treasury a ‘credit’ on the 'Exchequer Account' at the Bank of England.

The grant of credit is not a balance of money, but a ledger balance that shows how much money will be made *available* for HM Treasury to spend, according to the requirements of government departments and in accordance with parliamentary Supply and Appropriation Acts.

In theory a government department could draw down its Exchequer credit on an annual basis, as it does not require a money balance to be put immediately at its disposal. Typically, however, government departments draw down their Exchequer credit on a monthly basis.