It would seem that Havering Council is one of 20 Local Authorities that has money tied up in Iceland in one of the two banks (Landbanksi or Heritable) in deep trouble; it has some £12.5 million at risk in one of the Icelandic banks that have filled for bankruptcy. Once again Havering has been caught up in the credit crunch (after pulling the plug on the swimming pool for Romford project)The other Councils caught up in the banking fiasco are Kent County Council with £50m, Westminster with £17m, Sutton has £5.5m, Hertfordshire also has £17m and North and East Lincolnshire between them has £8m and whilst Buckinghamshire and Cornwall County Councils both have £5m tied up in Iceland.
Havering Park Councillor, Andrew Mann said “I have today written to The Chief Executive of Havering Council asking her to confirm how much we have on deposit with the banks and what risk there is of losing any the money and if this will affect the cash flow of the Council”.
There is a different set of rules around money held on account for Local Authorities to that of members of the public, where personal banking customers are now guaranteed the first £50k (up from £35k this week), no such guarantee exists for Local Authorities.
It is understood that Council Leaders from the Local Government Association are seeking urgent meetings with the Chancellor to discus the emerging crisis and to ask him to guarantee the money the same as personal bank customers.
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