Ealing Taxpayers Money Not At Risk

Council confirms they 'do not use any of the Icelandic Banks'

An Ealing Council spokesperson has assured Ealing residents that the authority had no money tied up in Icelandic Banks.

Town hall officials were meeting Government ministers this afternoon to demand help in recovering hundreds of millions of pounds invested by councils in collapsed Icelandic banks.

The emergency meeting with the Local Government Association comes as dozens of local authorities revealed they had deposited taxpayers' cash in the institutions.

They will urge Treasury ministers to give them the same guarantee offered yesterday to individual savers by Chancellor Alistair Darling that they will not lose out.

One authority alone - Kent County Council - has £50 million deposited in troubled Landsbanki and its UK subsidiary Heritable, as well as Glitnir Bank.

Dozens more, as well as Transport for London and the Metropolitan Police Authority, have assets in the banks, estimated by the Tories to be worth in excess of £1 billion.

A total of 37 authorities have so far said they have investments caught up in the collapse, investments branded a "disgrace" by campaigners.

Kent said its local services were not at risk but smaller authorities, with a larger proportion of their cash in the banks, faced potential cuts.

The LGA said councils had stuck to Whitehall rules encouraging them to get the best return and to invest their money across a number of financial institutions to spread risk. Councils took professional advice and were only allowed to lend it to banks with the top credit ratings, they pointed out.

Mark Wallace, campaign director at the TaxPayers' Alliance, said: "Every year we hear that councils don't have enough money and need to raise taxes but it seems they have had sufficient excess tax to salt tens of millions of pounds away.

"The fact that they have invested this money and seem to have lost it is even more shocking and is sadly yet another reminder of the poor financial management in local councils.

"It's an absolute disgrace. If the councils can't get their money back, the people who took these excesses should seriously consider their positions as councillors."

Chancellor Alistair Darling announced yesterday that he will protect the savings of private investors in Icelandic banks but said local authorities were "more of an informed investor".

London public authorities are thought to face exposure of around £200 million, according the umbrella organisation London Councils.

October 9, 2008