UK government looks to force open $640 million fund untouched since 1928 to pay off national debt

  • An anonymous benefactor donated £500,000 in 1928 as part of a fund that must remain untouched until the U.K. raises enough money to pay off its entire national debt.
  • The U.K. government will appeal to the High Court to gain access to the National Fund.
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The U.K. government will go to the country's highest court Tuesday in a bid to force open a £475 million ($640 million) charity fund set up 90 years ago with the intention of paying off the national debt.

The "National Fund" was opened in 1928 by an anonymous benefactor who donated £500,000, but on the condition that it must remain untouched until the U.K. raises enough money to pay off its entire national debt.

While the fund currently stands at £475 million, it represents just 0.06 percent of the U.K's estimated £1.7 trillion debt.

Attorney General Jeremy Wright will urge High Court judges on Tuesday to change the terms of the trust fund and release the money to pay off some of the U.K.'s debt.

"Almost 90 years ago, an anonymous donor bequeathed money to the nation and yet we have not been able to put it to good use," Wright said. "We have been working with the Treasury, trustees and the Charity Commission to find a solution consistent with the donor's original objectives of extinguishing the national debt."

Barclays, which oversees the management of the fund, has for years tried to obtain permission to gain access to the money, to make it available for charitable grants or hand it over to the Treasury.

Any changes to the fund must be approved by the High Court.

The original £500,000 donation was a cash sum of £338,909 and securities to the value of £160,969. Accounts for the fund show that gains on investments and exchange movements have amounted to an overall net gain of £46,606,147.

U.K. government borrowing shrunk to its lowest level in more than 10 years in April. Total U.K. public debt now stands at £1.798 trillion, about twice the level it was before the 2008 financial crisis.

That figure excludes public sector banks, but does include for temporary Bank of England lending that was introduced to revive the country's economy.