Friday, 10 October 2008

Now's your chance.


Send a letter to the Chief Executive of your local Council :


Dear Mr Reid,


I noticed that public money, harvested from the good citizens of Braintree by way of Council Tax has gone missing under your watch. £5 Million is the sum being reported by the press.


Can you explain to me why this investment was allowed to remain in Iceland when alarm bells have been ringing since August 2007, about the instability of the Icelandic Banks, and again as recently as May 2008 when these banks were being down graded?


There is little point all the local authorities appealing to central Government for a bailout from us the taxpayer, to replace our money as Ratepayers that your Authority has lost in a reckless investment.


I would like a full and dated explanation from yourself and the Chief Financial Officer within the next seven days as to the following- -


When was this investment made?

Why was it made, on whose recommedation and what independent advice was sought?

What checks were made on the credit worthiness of Landsbanki at the time?

What monitoring was made on this investment considering the warnings that were being put out in August 2007, and the later downgrading to BBB+?

When was the Authority first aware that Landsbanki were in financial trouble and what steps did you take to protect the ratepayers funds?


I do not wish to hear that you are making appeals to Whitehall, the officers and Councillors are legally responsible for this money, not Whitehall. This is an appalling state of affairs considering that the Local Authority has the right to extract this money from our pockets with the sanction of penal action if we do not pay and to find this level of incompetence within your Finance department.


If I do not receive a detailed explanation with seven days, who is responsible and what disciplinary steps are going to be taken, as there most certainly would be in a private enterprise, I will apply for this information with an application under the Freedom of Information Act and ensure that this goes to press.


For far too long have we had to put up with this lack of accountability at all tiers of Government. I look forward to receiving your acknowledgement and your detailed reply.
I will also be registering an official complaint with the Standards Board


Love and kisses


A tax payer


Go on, you know you want to. Remember, it's YOUR money they've pised up the wall and they'll want YOU to replace it.


h/t Guthrum
UPDATE: Some bright spark has put Iceland up for sale on Ebay, 99p start, no reserve
UPDATE:
A response
Dear Bastard Old Holborn,
Further to your email of 10th October 2008, I write on behalf of Allan Reid the Council's Chief Executive to advise that your email will be treated as a Freedom of Information request and has been referred to me as the responsible officer .
The 20 working day period for the Council to respond to your request commences from Monday 13th October 2008 and expires on 7th November 2008. Should you have any queries regarding your request, please do not hesitate to contact me. However I would be grateful if you would note that I am out of the office from Monday 13th October and return on Thursday 16th October.
For your information the following text is a press release issued by the Government and The Local Government Association (LGA) and is followed by the Council's responses to questions which have been asked following enquires of the media and others. These may provide a response to your request.
JOINT STATEMENT from GOVERNMENT and Local Government Association (LGA) - issued today. We had a very productive meeting and we agreed to stay in close touch, meeting again next week. Government and the LGA agreed that there is no evidence of recklessness by local authorities. They also agreed the financial framework for local authorities, which requires them to strike an appropriate balance between security of investments and returns, appears to have been adhered to.
Many authorities have already publicly stated that any risk is not a threat to frontline services but a small number of authorities may have specific problems. We agreed once the LGA completed its analysis of the effects of the situation on individual local authorities, we will look at issues arising on a case by case basis. For those local authorities who are facing severe short term difficulties Government and the LGA will agree an appropriate set of ways to assist. We will judge what's appropriate on a case by case basis but in previous situations support has included helping local authorities restructure their financial priorities, providing additional expertise and capitalisation of expenditure.
The Government and international partners have already acted to support stability of the banking system. Action has also been taken in relation to the position of Icelandic banks – including freezing assets of Landsbanki. Local authorities, along with all other investors, will benefit. The LGA will be seeking to open discussions with administrators of the UK subsidiaries. The LGA and Government encourages all councils to continue operating investments in accordance with the guidance. LGA and Government will continue to monitor the situation closely. As of 6pm yesterday evening (9/10/08) , we had reports of 108 councils in England and Wales with £798.95m deposited in Icelandic banks.
Frequently asked questions - adapted for Braintree District Council
Q. What is the value of your investments with Icelandic banks? A. £5 million.
Q. What percentage of your overall investment is with Icelandic banks? A. 9%
Q. Which Icelandic banks are the investments with? A. Landsbanki £3million (consisting of 2 investments); Glitnir £1million; and Kaupthing Singer & Friedlander £1million.
Q. Why was the money not pulled out sooner? A. We stopped investing in Icelandic banks several months ago. At that time there was no indication that these banks were in difficulty. Additionally, these are long-term contractual deposits which cannot be withdrawn.
Q. Was it irresponsible to make the investments? A. No. Prudential financial management means that we put money into a diverse range of banks to make sure that any risk is spread to minimise the impact of problems in the financial markets. All our investments are carefully considered and planned, and are placed using an approved lending list agreed with our external treasury advisors.
Q. Was it irresponsible to leave the money in so long? A. Based on the advice we were given it was safe to do so. Two of the investments were for 2 years (placed in March 2007) and the other two were for 6 months (placed in April 2008).
Q. How confident are you that the money can be retrieved? A. We are confident that the LGA will put up a very strong case to the Government to protect these deposits. This is taxpayers’ money, not council money, so it should be given the same protection that has been afforded to individuals.
Q. If the absolute worst comes to the worst, and the money is lost (of course we all hope not) what will the effect be on the taxpayer?A. The Government really must ensure that these deposits are protected, but if it does come to the worst there will be no immediate impact on the taxpayer. In the longer term, the council will need to manage its spending plans and use of reserves in order to ensure that tax payers are not adversely affected.
1. Local Government is a huge sector, spending £106bn a year and employing 2.2m people. Councils have big bills to pay, as employers and purchasers of services
2. Most councils receive government grant quarterly to spend over the coming months. Councils invest this money in banks with solid credit ratings to accrue interest over a relatively short period of time and withdraw it when it is needed.
3. Local Government holds significant contingency funds. For example, last summer councils spent millions of pounds helping flood victims by putting them up in temporary accommodation.
The LGA will meet the Government again on Thursday. By then, we hope to have the definitive picture on how many councils are involved and how much money was deposited in Iceland.Councils have large amounts of money invested with banks because during the good times we saved for stormy weather. Because councils have these reserves, we don't believe frontline services will be affected nor that council taxes will have to rise. We invested money following government guidance about spreading risks and seeking a high return; we sought independent financial advice; and we relied on the vetting of international credit agencies.
Kind regards, Emma Wisbey
Governance Lawyer
I have launched a FOI request to see that guidance, know who the indepedant advisors were and the see the credit ratings

38 comments:

Custard said...

Done!

Tuscan Tony said...

Well put. Money-go-round-tastic, otherwise, with the silver ball always stopping in the taxpayers' pocket for some mysterious reason. Over here in Italy, local/regional councillors are, like company directors, personally liable for many of their own negligent acts, with the compensation coming out of their own pockets. This concept was introduced 10 years ago following various financial scandals, and boy, did it clean up the place.

Dave said...

The government will hold an enquiry- just as they did over Balls and Coopers second home allowance scam. Come the next bit of bad news- next Tuesday if not sooner, they will bury their findings same as always.

They've tried blaming Two Jags. Quite why they listened to anything that fat waste of space said is beyond me.
Through the Beeboid propaganda channel they tried to lay the blame of the Tories back in the 80s!

Cut the crap. Cut out the middle man. Get to the point. It was me. I dunnit.
I'm to blame.
I voted once. It must be my fault

Guthrum said...

I had a response within two minutes, unfortunately everybody is on holiday until the 15th, then they will 'consider' my correspondence.

I responded that there is more than one senior official and the seven days stands.

Considering he was on holiday, two minutes later I get a 'read' message from the CFO.

My local councillor has yet to respond, he IS personally liable and can be surcharged.

I wish everybody would stop being apathetic, and fire off a similar email. Then the Revolution can start

Old Holborn said...

No response from mine. Yet.

I agree. Bring on the revolution. I'm ready. I've made sandwiches AND brought a flask. Can't start soon enough

electro-kevin said...

Brilliant. I shall do better than this. I shall get a copy of this letter in my local paper and make sure that lots of other people do it too.

Old Holborn said...

Already done it in mine

http://www.thisistotalessex.co.uk/latestnews/BRAINTREE-Council-millions-collapsed-Icelandic-banks-frozen/article-387231-detail/article.html

t bull said...

My council went Tory last year and prudently stuck my fucking money in a better interest account, morons...

I don't think Russia will be pleased with ebay.

The've already bought Iceland.

haddock said...

some very funny q & As on the ebay listing

Q: Can you let me know if my mum is still there? She went last week & hasn't returned.
A: All Mums will be removed before the item is sold.

Will bombard Wiltshire Council tonight. £17 for every man woman & child in the county....

Old Holborn said...

A response

Dear Bastard Old Holborn,

Further to your email of 10th October 2008, I write on behalf of Allan Reid the Council's Chief Executive to advise that your email will be treated as a Freedom of Information request and has been referred to me as the responsible officer .

The 20 working day period for the Council to respond to your request commences from Monday 13th October 2008 and expires on 7th November 2008. Should you have any queries regarding your request, please do not hesitate to contact me. However I would be grateful if you would note that I am out of the office from Monday 13th October and return on Thursday 16th October.

For your information the following text is a press release issued by the Government and The Local Government Association (LGA) and is followed by the Council's responses to questions which have been asked following enquires of the media and others. These may provide a response to your request.

JOINT STATEMENT from GOVERNMENT and Local Government Association (LGA) - issued today.
We had a very productive meeting and we agreed to stay in close touch, meeting again next week. Government and the LGA agreed that there is no evidence of recklessness by local authorities. They also agreed the financial framework for local authorities, which requires them to strike an appropriate balance between security of investments and returns, appears to have been adhered to.

Many authorities have already publicly stated that any risk is not a threat to frontline services but a small number of authorities may have specific problems.

We agreed once the LGA completed its analysis of the effects of the situation on individual local authorities, we will look at issues arising on a case by case basis. For those local authorities who are facing severe short term difficulties Government and the LGA will agree an appropriate set of ways to assist. We will judge what's appropriate on a case by case basis but in previous situations support has included helping local authorities restructure their financial priorities, providing additional expertise and capitalisation of expenditure.

The Government and international partners have already acted to support stability of the banking system. Action has also been taken in relation to the position of Icelandic banks – including freezing assets of Landsbanki. Local authorities, along with all other investors, will benefit. The LGA will be seeking to open discussions with administrators of the UK subsidiaries. The LGA and Government encourages all councils to continue operating investments in accordance with the guidance.

LGA and Government will continue to monitor the situation closely.
As of 6pm yesterday evening (9/10/08) , we had reports of 108 councils in England and Wales with £798.95m deposited in Icelandic banks.

Frequently asked questions - adapted for Braintree District Council
Q. What is the value of your investments with Icelandic banks?
A. £5 million.
Q. What percentage of your overall investment is with Icelandic banks?
A. 9%
Q. Which Icelandic banks are the investments with?
A. Landsbanki £3million (consisting of 2 investments); Glitnir £1million; and Kaupthing Singer & Friedlander £1million.
Q. Why was the money not pulled out sooner?
A. We stopped investing in Icelandic banks several months ago. At that time there was no indication that these banks were in difficulty. Additionally, these are long-term contractual deposits which cannot be withdrawn.

Q. Was it irresponsible to make the investments?
A. No. Prudential financial management means that we put money into a diverse range of banks to make sure that any risk is spread to minimise the impact of problems in the financial markets. All our investments are carefully considered and planned, and are placed using an approved lending list agreed with our external treasury advisors.

Q. Was it irresponsible to leave the money in so long?
A. Based on the advice we were given it was safe to do so. Two of the investments were for 2 years (placed in March 2007) and the other two were for 6 months (placed in April 2008).

Q. How confident are you that the money can be retrieved?
A. We are confident that the LGA will put up a very strong case to the Government to protect these deposits. This is taxpayers’ money, not council money, so it should be given the same protection that has been afforded to individuals.

Q. If the absolute worst comes to the worst, and the money is lost (of course we all hope not) what will the effect be on the taxpayer?

A. The Government really must ensure that these deposits are protected, but if it does come to the worst there will be no immediate impact on the taxpayer. In the longer term, the council will need to manage its spending plans and use of reserves in order to ensure that tax payers are not adversely affected.

1. Local Government is a huge sector, spending £106bn a year and employing 2.2m people. Councils have big bills to pay, as employers and purchasers of services

2. Most councils receive government grant quarterly to spend over the coming months. Councils invest this money in banks with solid credit ratings to accrue interest over a relatively short period of time and withdraw it when it is needed.

3. Local Government holds significant contingency funds. For example, last summer councils spent millions of pounds helping flood victims by putting them up in temporary accommodation.

The LGA will meet the Government again on Thursday. By then, we hope to have the definitive picture on how many councils are involved and how much money was deposited in Iceland.

Councils have large amounts of money invested with banks because during the good times we saved for stormy weather.
Because councils have these reserves, we don't believe frontline services will be affected nor that council taxes will have to rise.
We invested money following government guidance about spreading risks and seeking a high return; we sought independent financial advice; and we relied on the vetting of international credit agencies.

In other words, you're fucked sunshine and you can't touch us.


Kind regards,

Emma Wisbey
Governance Lawyer

Guthrum said...

no evidence of recklessness by local authorities.

Ahhh just negligence then !

They must be rattled with a lawyer answering !

Gordon said...

love and kisses? did you actually use that on your letter? I will be including it in mine (Lancashire, £10 million)

Anonymous said...

International credit agencies?

Kiss my AAA.

idle said...

Tell me what day the revolution starts and I will set an alarm, or stay up for it if it begins before 10am.

I will bring a full canteen of bullshot and bloody mary. We will have to loot burgundy from french restaurants, which should not be tricky as they will have scuttled off to Dover at the first sign of les rosbifs getting dusty.

Goodnight Vienna said...

Emma is repeating the words of local authority lawyers up and down the country

And I suppose the people, the electorate, can just go and 'amuse' themselves? If only I could steel myself and step into in Brown's shoes - but I can't. The man's an utter twat and the Labour Party is devoid of intellect and humanity.

I do hope that my last sentence won't be equally applied to Cameron and the Conservatives.

This country, our country, deserves so much better.

Custard said...

I have had this response:-

When I stop kicking the cat, I may respond.



Dear Mr Custard, (spelt wrongly too...)

I'm the Council's Director with responsibility for Finance and will reply to your
questions. I understand your dissatification with my performance and that of the
Council more generally and can assure you that we are responding to the emerging and
unprescendented world economic situation with care and vigour. That said, our
Treasury Mangement Policy (TMP) sets the terms and limits for our investments and we
only invest in institutions with an A rating or higher. These investments were made
within those boundaries. Councils have a duty to be careful with public money but
also to provide value for money for its citizens, by only investing with A, AA or
AAA rated institutions we believe we balanced risk with return appropriately.

To answer your questions more specifically, we have two investments with Heritable
Bank PLC totalling £5.5m. One sum was deposited in August and the second in
September. Heritable are a UK bank and their assets are currently frozen, as you no
doubt know, with Ernst and Young appointed as administrators. We use Sector as our
Treasury advisers and Heritable were green risk / A grade rated when we made both
deposits with them. I am clear that the deposits were made within the terms and
limits set by our Treasury Management policy and were made taking the advice of
Sector. We spread our investments to minimise risk and because Heritable were A
graded we made only relatively small and short term deposits with them, the August
deposit being for 3 months and the September one for a week. We are in contact with
the bank's administrators as you would expect.

I have undertaken a review of the circumstances around these two deposits and am
satisfied that my officers acted properly and in accordance with the parameters set
by our TMP and on Sector's advice but will be undertaking a fuller review and
reporting on this to the Council's Audit Committee at its next meeting in December.
The Council also issued a press statement as soon as we became aware of the problem
on Wednesday this week. I say both of these things to reassure you that I do take
the matter of my accountability seriously and that the Council has been and is open
to this matter being subject to public scrutiny.

Please do not hesitate to come back to me if you need anything further.

Yours sincerely,

Sue
Sue Higgins, Strategic Director - Resources
London Borough of Sutton
Civic Offices, St Nicholas Way, Sutton, Surrey SM1 1EA

Tel: +44 (020 8770 5511), Fax: +44 (020 8770 5510), web site: www.sutton.gov.uk



-----Original Message-----
From: Martin Paul
Sent: 10 October 2008 13:25
Cc: Higgins Sue
Subject: Your enquiry

Dear Mr Custard

Many thanks for your message. We will get a full response to your questions as
quickly as we can.

Regards - Paul Martin

Billy Wallace said...

Good to see you got a reply, but still makes you wonder why all these councils had money put away for 6 months or more.

Two of the investments were for 2 years (placed in March 2007)

Landsbanki £3million (consisting of 2 investments); Glitnir £1million; and Kaupthing Singer & Friedlander £1million.

Councils have large amounts of money invested with banks because during the good times we saved for stormy weather.

Reserves!, so mad March as we call it is a con to get more of our tax money for the next year so they can put more money away long term.

bofl said...

o/h......just read the lawyers reply.....a few things struck me about this and all the other dumbasses.......why was some of the money invested for a term of two years?if there was a problem like last years run on northern rock then there would be problems with getting the cash out..

why the fuck are people with no market sense or with no access to research as to the credit worthiness of the banks that they invested in, spraying money around ?
did they undertake 'due diligence' and investigate the risks?

Why on earth didnt they just invest in gilts? supposedly AAA....always a market and the money is available tout suite.
+++++++++++++++++

finally be warned.these useless tossers will squirm and blame each other.....they mostly get fat salaries and are looking at nice fat pensions too.....all paid for by everyone else of course.....

i met a bloke who works for southend council last night. i know he is in I.T but i jokingly said.'hey,*****. how much money have you lost this week?

He told me that Southend hadnt lost any money..........

however.they obviously are working out a story......he went on..
'if councils had put money in a low interest current account then they would have got flak-so now they are in trouble for searching for a better return......we are damned either way'........

so that's it.they were doing their best..end of..council tax up again........not our fault.....
what a revolting country we live in.

I advise you all to write /phone/meet with your local mp..

60 million of us!!!!!!!!!

Custard said...

In other news regarding this "Council", they have also decided that Beddington Park is now to bar smoking.

So now you can't smoke in a park. An open park. A fucking huge park.

But you still will, however, ingest god knows what shite from the constant traffic on the A232 next to it.

This ban is also unenforceable under law. Any poor sod that gets the job of trying to enforce it is likely to meet with much abuse - both physical and verbal - and will end up as fish food in the Wandle.

terrence said...

She says they invested money in April.

In Feb. all three Icelandick banks had had there ratings lowered.

No excuse.

Old Holborn said...

Hang on a minute Custard.

Beddington Park IS the smoking ground of Wallington Grammar. After we were caught smoking dope round the back of the art block, where the hell were we supposed to smoke?

Teachers used to come and bum fags off us FFS!

A culture is being destroyed!

Old Holborn said...

Terrence:

I know this. There is a reason they didn't pull their "reserves" out and I intend to find out why.

And I'm an evil motherfucker. And I don't give up. Ever.

electro-kevin said...

Bejeez.

I was brought up in Mitcham and then Sutton.

electro-kevin said...

I used to cycle past the Beddington Lane shit farm every day.

Phewee !

Old Holborn said...

I think you mean Hackbridge

They've built a Barratts estate there now I hear. How I laughed.

My father was stationed at Mitcham Nick, desk Sargeant, until the Masons got him for refusing a known thug (and lodge member) a shotgun licence (later convicted of armed robbery). I don't think he ever recovered.

Anonymous said...

If these cunts have money to invest, why is council tax so high? I do not pay x per month for the council to stuff it in a bank I would have not have touched myself. State knows best, eh? Wankers.

electro-kevin said...

Yes. Mitcham was full of blaggers.

Our boxing coach was a chap called Bill Bolton. A larger than life character who'd done time for breaking a copper's jaw and for armed robbery.

All the kids loved Bill and would follow him to the edge of the Earth. He'd have an argument with his missus every christmas day and end up having his dinner at our house. This became tradition - never officially planned, it just happened.

My dad (a cop) and he were like brothers ... until poor Bill keeled over and died of a heart attack ringside aged 44.

Our first experience of untimely death. 'twer a bleak winter in Mitcham that one.

electro-kevin said...

We burried him at Bandon Hill.

Custard said...

Old Holborn

The pupils are much more up front these days - they sit on the tables outside the Duke's Head and smoke. Whilst having a pint or two. With the teachers.

I had a lucrative little business when a Prefect at Sutton Manor - confiscate fags off anyone found with them and then sell them as "singles" to other Prefects. Made a small fortune.

Guthrum said...

Emma is repeating the words of local authority lawyers up and down the country

Not mine, he obviously had a sleepless night and emailed me before 8am this morning. Fair play to him for his personal courage in not hiding.

This is possibly the best and last chance we have to hang this overblown State.

Action and not whinging

bofl said...

what did he say guthrum?

Guthrum said...

They were relying on the credit rating of Fitch, they invested the money on the 27th May. Fitch (See the LPUK blog) have told Sky news that they were issuing warnings as far back as 2006, and specific warnings on April 1st.

We are taking legal advice as to what action to take, as public officials and members have been recklessly speculating with taxpayers money in exactly the same way as in the Orange County Bankruptcy in 1994 in California.

Until we have received legal advice I am not publishing the correspondence.

Elby the Beserk said...

I feel a review coming on

Harriet Mill said...

just found out my local building college have lost 800k, but they aren't exactly shouting it from teh rooftops.

Wonder just how understated the estimates actually are?

And where the fuck am I gonna get a plumber now !!!!

mmm said...

In a similar vein:
The Cats Protection charity said yesterday it had £11.2m deposited with Kaupthing Singer & Friedlander. "The day-to-day care of our cats is unaffected," said a spokeswoman. "The deposits held by KSF were earmarked for long-term projects only and to provide a safety net in case of real emergencies."
Colour me suspicious but the amount seems wildly extravagant for the care of moggies.
In the past tense revise "seems" to “seemed”.

Guthrum said...

We invested money following government guidance about spreading risks and seeking a high return

Lying bastards- Rule 20 requires all LA investments to have HIGH SECURITY AND HIGH LIQUIDITY- Clearly Braintree had neither, broke the rules, acted ultra vires, the CEC and CFO are the officers legally responsible, all of the members of the Council could be surcharged. They are trying to cover their tracks.

See LPUK.Blog for a copy of the Guidance they have broken.

Custard said...

Now received this:-

For immediate release: Tuesday 14 October
Contact: LGA Media Office 0207 664 3333

COUNCILS CALL FOR INQUIRY INTO CREDIT RATINGS FOR ICELANDIC BANKS



The Local Government Association has today called for a Government inquiry, led by
the Financial Services Authority, into how credit ratings agencies continued to give
Icelandic banks high credit ratings right up until a matter of days before they went
into administration or receivership.



The call came as the LGA:



- Reveals the outcome of encouraging discussions with the administrators Ernst &
Young. The administrators consider that that the value of the book value of the
assets of Heritable Bank Plc and Kaupthing Singer & Friedlander Limited (both in
administration) appeared to be of the same order of magnitude as the liabilities.

- Publishes an update on how many councils have been affected, which shows that 116
councils are currently known to have had deposits in Icelandic banks, with deposits
totalling £858.3m.


- Calls on councils that invested after the credit ratings were downgraded to an
unacceptable level on 30 September to carry out their own inquiries to discover what
happened.




Analysis by the LGA of the ratings issued by the main credit ratings agencies shows
that Icelandic banks and their UK subsidiaries continued to receive relatively high
ratings up until the afternoon of 30 September.

Analysis shows that:



28 February

Fitch's long-term ratings for Glitnir Bank h.f (Glitnir), Kaupthing Bank h.f
(Kaupthing) and Landsbanki Islands (Landsbanki) were all A. Their corresponding
short-term ratings were all F1. Moody's reduced its long-term rating for
Landsbanki from Aa3 to A2, and held their short-term rating at F1. Its long-term
and short-term ratings for Glitnir were Aa3 and F1 respectively.



April

Fitch announces that Icelandic banks were being put on negative rating watch,
warning that short and long term ratings on Icelandic banks could be reduced.



9 May

Fitch reduced the ratings for Glitnir and Kaupthing to A minus (long-term) and F2
(short-term). Landsbanki's ratings remained the same but the outlook rating was
changed to Outlook Negative.



30 September
Fitch reduced Landsbanki's long-term ratings from A to BBB and its short-term
ratings from F1 to F3. The long-term and short-term ratings for Glitnir were reduced
to BBB minus and F3 respectively. The long-term and short-term ratings for
Kaupthing were reduced to BBB and F3 respectively. Moody's announced it was
reviewing Landsbanki's ratings.



8 October
There was a general downgrade of the Icelandic banks' ratings.


Cllr Margaret Eaton, Chairman of the LGA, said:

"This isn't the time for a blame game. This is an unprecedented situation, the
extent of which could not have been forseen. However, at the appropriate moment,
there needs to be a full and independent inquiry to find out just how these banks
continued to get relatively strong credit ratings until a few days before they went
under.

"No council should rely solely on credit agencies and must use their financial nous.
But there must be confidence in credit ratings as councils continue to invest
billions of pounds in a whole range of financial institutions. Our analysis dispels
the myth that many councils were investing recklessly after credit warnings were
issued.

"The good news for council taxpayers is that discussions with the administrators
have been hugely encouraging. The administrators considered that the book value of
the assets of each business appeared to be of the same order of magnitude as the
liabilities, although it is too early to give exact figures.

"The evidence shows that, overwhelmingly, town halls have acted prudently and within
strict guidelines to get the best rates of interest on savings whilst investing in
institutions deemed to be strong. If it is discovered that individual councils
invested significant sums following the credit rating downgrading, the LGA expects
them to set up their own inquiries to find out what happened.



"Prudent financial management means that councils put their money into a diverse
range of banks to make sure that any risk is spread to minimise the impact of
problems in the financial markets. We are not aware of councils that are in serious
imminent liquidity problems and in the long term we are confident that vital
frontline services will remain unaffected.



ENDS


"This isn't the time for a blame game" !!! Yes it fucking is!

Old Holborn said...

Interesting.

Private Eye has managed to find out that the advisors are the twats.

And that they are in fact, Capita.

Currently sniffing around to find out how much of our money goes to Capita each year and whether THEY should be able to pay back the money instead

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