Councils have hundreds of millions in icelandic banks

Looks like councils are in trouble now - according to the LGA, councils have invested millions in Icelandic banks which have gone bust. Some individual councils stand to lose tens of millions - Kent is the worst hit with £50m invested.

What I can't understand is why it was left to individual councils to invest money? Surely that should all be done at a national level, with councils just there to provide local services, or am I missing something?

this country gets better by the day

It seems Nottingham had about 40 Million there too.

Now this raises a question. The money councils get is from council tax, so shouldnt this money be out doing good for the community rather than languishing in foreign bank accounts?

Also, if the council needs somewhere to store the money, shouldn’t they be stashing it in a least a UK owned bank and preferably a regional bank rather than giving our money to foreign companies to invest and make money from?

And heres me thinking councils were skint.Well thats what they have been telling us.

People in Exeter can rest assured that the city does not have a massive budget deficit. Claims that the council has a deficit of £11million have been roundly refuted.

Exeter City Council's Chief Executive, Philip Bostock, said: "The council has always had an ambitious and substantial capital investment programme, including the rebuilding of Exeter's museum, significant city centre enhancements and major investment in affordable housing. To fund completion of this year's committed capital investment programme, we would need to borrow up to £11 million, and meet the cost of the borrowing from the revenue budget. "

"Over the next five years aggregate borrowing could reach around £30 million. This is perfectly normal and has to be capable of being repaid from each year's balanced revenue budget - the principle is just like paying off a mortgage on a house. It is not a deficit on our budget. Just for comparison, Ipswich Borough Council has long-term borrowing of £41.7 million, Gloucester City Council £29 million, and Devon County Council £613 million."

In common with councils all over the country, Exeter is facing a greater challenge in preparing budgets in the current economic climate. In a budget report to the city's Executive and to the City Council in February, councillors were told that Exeter City Council is facing a more challenging annual revenue budget situation for the next three years than it has had to face for some time.

In part, this is due to a very low government funding settlement for 2008 to 2011 together with the loss of other government grants and some new external spending pressures. In part, it is also due to the fact that Exeter is moving from being one of a small number of councils who have enjoyed debt-free status to being like most other councils who have to borrow to fund their capital expenditure.

Im not exactley sure whats going on but i think were being robbed blind,its time Brown got on his bike.

Councils and other government organisations who have money in Icelandic banks:

Kent County Council, £50m

Nottingham City Council, £42m

Transport for London, £40m

Norfolk County Council, £32.5m

Dorset County Council, Hertfordshire County Council, £28m

Barnet Council, £27m

Somerset County Council, £25m

Hillingdon Council, £20m

Westminster City Council, £17m

Hertfordshire County Council, £17m

Brent Council, £15m

Havering Council, £12.5m

Cheltenham Council, £11m

North Lincolnshire Council: Sutton Council, £5.5m

Buckinghamshire County Council: Cornwall County Council, £5m

Total: £347.5 Million of our money!

oh well its only 350 million

Councils and other government organisations who have money in Icelandic banks:

 

Kent County Council, £50m

Nottingham City Council, £42m

Transport for London, £40m

Norfolk County Council, £32.5m

Dorset County Council, Hertfordshire County Council, £28m

Barnet Council, £27m

Somerset County Council, £25m

Hillingdon Council, £20m

Westminster City Council, £17m

Hertfordshire County Council, £17m

Brent Council, £15m

Havering Council, £12.5m

Cheltenham Council, £11m

North Lincolnshire Council: Sutton Council, £5.5m

Buckinghamshire County Council: Cornwall County Council, £5m

The list is quite a bit longer than that ... Rotherham have £3.8m involved and Doncaster have £3m from what I remember

Now this raises a question. The money councils get is from council tax, so shouldnt this money be out doing good for the community rather than languishing in foreign bank accounts?

 

Also, if the council needs somewhere to store the money, shouldn’t they be stashing it in a least a UK owned bank and preferably a regional bank rather than giving our money to foreign companies to invest and make money from?

I'm not having a go at you personally, but surely concils need a bank account to put it in before it gets spent, don't they? And would you rather they put it into a crappy Lloyds TSB account that pays peanuts in interest, or one that pays a decent rate? If it wasn't for the Icelandic banking collapse it would have been classed as good fiscal management.

If you think the so-called British banks (many of which are owned by bigger foreign banks anyway) are any safer, you're kidding yourself. Northern Rock, Bradford & Bingley, Derbyshire Building Society? Not exactly a trio of success stories...

I'm not having a go at you personally, but surely concils need a bank account to put it in before it gets spent, don't they? And would you rather they put it into a crappy Lloyds TSB account that pays peanuts in interest, or one that pays a decent rate? If it wasn't for the Icelandic banking collapse it would have been classed as good fiscal management.

 

If you think the so-called British banks (many of which are owned by bigger foreign banks anyway) are any safer, you're kidding yourself. Northern Rock, Bradford & Bingley, Derbyshire Building Society? Not exactly a trio of success stories...

Don’t worry I don’t think you are having a go at me

I understand your point of view, but doesn’t the government have banking facilities they can offer? Or the bank of England maybe?

My reason for saying local banks is that the money is then within the UK and comes under UK legislation. A law could be set that money from councils is ring fenced and so cannot be lost, but presently the money is in an offshore bank something the government frown on for us to do!

If the money was in a UK owned bank then the profit would be kept within the UK and would trickle down the economy where as at present the only people benefiting from this money are forigners.

When will the English realise we should invest in ourselves and that 0.01% extra interest they may have got in a foreign bank is far less than the actual benefit to the country if the money was kept within our shores!

If you think the so-called British banks (many of which are owned by bigger foreign banks anyway) are any safer, you're kidding yourself. Northern Rock, Bradford & Bingley, Derbyshire Building Society? Not exactly a trio of success stories...

The difference being that those crappy banks haven’t been allowed to go bust.