APJRF

When Robert Stheeman was interviewed for the job of chief executive of the Debt Management Office seven years ago, he was asked how he might cope if the Government started issuing fewer gilts. The opposite scenario was never mentioned.

So confident was the Treasury of its handling of the economy, apparently, that the possibility of a gilt glut to plug a gaping hole in the nation’s finances never crossed officials’ minds.

“You could argue that I’ve done a great job,” Mr Stheeman jokes. “There’s lots of supply now.”

As head of the DMO, Mr Stheeman, 49, is the gatekeeper of Britain’s ballooning public debt – all £1.4 trillion of it under the Treasury’s forecasts for 2013. It is his responsibility to make sure the money is raised both successfully and at the lowest possible price. He has never been so busy.

Two years ago, the DMO was trundling along issuing around £50bn worth of gilts – Government bonds. This year, it will issue £220bn and, between now and 2013, £696bn in total.

In a sense, Britain’s public services are now in Mr Stheeman’s hands. Public borrowing will finance £175bn of the £671bn of planned Government spending this year – the single largest contribution, higher even than the £141bn of income tax receipts. If health, education and defence are to be paid for, it is up to the DMO to raise the money from global investors, ranging from pension funds to China’s central bank. In effect, the DMO is the operations office for the Treasury’s funding needs.

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Robert Stheeman: the gatekeeper of UK debt