Contingent Liabilities

Analyse and advise on the UK government’s contingent liabilities

The Contingent Liability Central Capability (CLCC) is an analytical and advisory unit within UK Government Investments (UKGI). The CLCC has been established to strengthen contingent liability expertise within government and improve how government manages its portfolio of risk from contingent liabilities.

What is a contingent liability?

A contingent liability represents a government commitment to possible future expenditure if specific conditions are met or unforeseen events occur, such as loans guarantee (where government agrees to pay the debts of a third party if they default, such as the Export Development Guarantee (EDG) schedule run by UK Export Finance) and indemnities (protection similar to insurance where government agrees to cover costs such as clinical negligence claims against NHS GPs).

Contingent liabilities are a significant source of fiscal risk to government. HM Treasury introduced a new approval framework in July 2017 which requires contingent liabilities that are novel, contentious or repercussive and have a maximum exposure of over £3 million to be evaluated according to five criteria: rationale; exposure; risk and return; risk management and mitigation; and affordability. The framework has been featured by both the International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD) as an example of international best practice in the management of government guarantees.


Contingent Liability Central Capability (CLCC)

The CLCC assists departments and arms-length bodies with assessing, quantifying and pricing risk from contingent liabilities, allowing departments and government to better understand the scale and distribution of their risk exposure from contingent liabilities. The team comprises actuaries seconded from the Government Actuary’s Department (GAD), credit risk experts, policy professionals and analysts.

Since its inception in April 2021, the team has assisted with over 50 new contingent liability proposals, established the cross-government Contingent Liability Advisory Network, begun working with selected departments to review their existing contingent liabilities and developed initial plans for future data collection across government. Going forward the team will continue to focus on building its presence and developing relationships with key contacts within government.


Departments we have worked with so far:

Siobhan Duffy


Siobhan Duffy joined UKGI in 2021 to lead the Contingent Liability Central Capability (CLCC), an analytical and advisory unit set up to strengthen contingent liability expertise across government.

Prior to joining UKGI, Siobhan spent over 25 years working in debt capital markets structuring and advising European corporates on debt issuance. During her career, she has held several leadership roles, including global head of private placement at NatWest Markets/ RBS and, prior to that, head of private debt at ABN Amro. Most recently, she established a debt distribution platform for London Bridge Capital, an independent corporate finance firm. 

Outside of UKGI, Siobhan is involved with St Mungo’s supporting a London based Outreach team working with street sleepers.

Alexander Richarz

Executive Director

Alexander joined UKGI in June 2021 to lead the credit branch in Contingent Liabilities Group. Prior to that, he had an over twenty-five-year international career in commercial and investment banking at Deutsche Bank, CIBC and Credit Suisse. He has significant experience in corporate and leveraged finance gained in front office origination, loan portfolio management, and credit risk management. Prior to joining UKGI he was heading the corporates team in credit risk management at Credit Suisse. He holds a master’s degree in economics.

Aidan Smith

Executive Director

Aidan joined UKGI in February 2021 to lead the insurance branch in the Contingent Liabilities Group. Aidan is on secondment from the Government Actuary’s Department. Aidan has over 20 years’ experience at GAD providing actuarial advice to the public sector, covering insurance, social security and pension arrangements. From 2015 to 2020 Aidan was GAD’s Head of Technical and Professional, responsible for technical and professional practices across the department.

Key objectives:

  1. Review and report on existing contingent liabilities

  2. Provide advice and analysis on new contingent liability proposals

  3. Promote best practice across government

Exploring the UK government’s contingent liabilities

This progress report from the CLCC summarises what has been achieved since its establishment in 2021 and sets out plans for the future.

The report describes what contingent liabilities are and why it is imperative that these risks are well understood and managed. It uses the analysis and projects undertaken by the team to set out what has been delivered over the past year and how we plan to work with departments to achieve our vision for the coming years.

CLCC Guidance – Estimating losses for Guarantees and Indemnities

This document is part of a series to provide guidance to departments regarding the establishment and management of contingent liabilities.

This guidance will help government departments in estimating losses for financial guarantees and indemnities, principally when completing the HMT checklist for contingent liabilities, but also outside of the checklist process when a department would like to better understand a particular risk exposure.  

This note should be read in conjunction with the high level guidance for filing in the checklist in the Contingent Liability Approval Framework and Managing Public Money (Annex 5.4)

Case Studies