The Audit Commission have published a damning report which brands Havering Council as negligent by investing money in Iceland.
The report picks out seven local authorities that placed deposits totalling £32.8m in Iceland on or after 1st October 2008. The councils are Havering (£2m), Kent (£8.8m), Redcar (£4m), Restormel (£3m), Bridgnorth (£1m), South Yorkshire Pensions Authority (£10m), North East Lincolnshire (£4.5m).
A total of £954m has been deposited in Icelandic banks by 127 local authorities. Havering has a total of £12.5m deposited whilst, ironically, the Audit Commission have £10m tied up.
Leader of the Opposition, Cllr Clarence Barrett, said: “We have been assured all along that the Icelandic deposits met with Treasury management guidelines and I am confident that this £2m was placed prior to the downgraded credit alert rather than after, albeit by just 15 minutes”.
“As with all deposits, the £2million invested on 1st October appears to accord with those guidelines and the existing advice from the treasury credit agency (Sector). However, we need to look at the role of the credit agency and whether the subsequent alert in respect of downgrading the investment could have been issued earlier”.
“It is a matter of deep concern to us that investments are made prudently and in line with agreed treasury management strategy. If there is any substance in the Audit Commission claims that there has been negligence, then we need to re-examine the whole issue again and establish where systems may have failed”.
However, Havering Park Action Member, Kevin Tonks, who works in the Banking Sector, has found numerous examples of warnings being issued by Bloomberg the day before, he said “I am amazed in this day and age with modern technology that the alarm bells were not ringing sooner, there is plenty of evidence in the finance sector warning against investment in Iceland”
To see the full text of the Bloomberg report click here
The report picks out seven local authorities that placed deposits totalling £32.8m in Iceland on or after 1st October 2008. The councils are Havering (£2m), Kent (£8.8m), Redcar (£4m), Restormel (£3m), Bridgnorth (£1m), South Yorkshire Pensions Authority (£10m), North East Lincolnshire (£4.5m).
A total of £954m has been deposited in Icelandic banks by 127 local authorities. Havering has a total of £12.5m deposited whilst, ironically, the Audit Commission have £10m tied up.
Leader of the Opposition, Cllr Clarence Barrett, said: “We have been assured all along that the Icelandic deposits met with Treasury management guidelines and I am confident that this £2m was placed prior to the downgraded credit alert rather than after, albeit by just 15 minutes”.
“As with all deposits, the £2million invested on 1st October appears to accord with those guidelines and the existing advice from the treasury credit agency (Sector). However, we need to look at the role of the credit agency and whether the subsequent alert in respect of downgrading the investment could have been issued earlier”.
“It is a matter of deep concern to us that investments are made prudently and in line with agreed treasury management strategy. If there is any substance in the Audit Commission claims that there has been negligence, then we need to re-examine the whole issue again and establish where systems may have failed”.
However, Havering Park Action Member, Kevin Tonks, who works in the Banking Sector, has found numerous examples of warnings being issued by Bloomberg the day before, he said “I am amazed in this day and age with modern technology that the alarm bells were not ringing sooner, there is plenty of evidence in the finance sector warning against investment in Iceland”
To see the full text of the Bloomberg report click here
2 comments:
The Audit Commission appears singularly silent about its own £10-millions investment in Iceland. A strong whiff of hypocrisy in my view.
I agree with you Morris, however the issue in Havering was the timing of the last £2million deposit, which was made just 18 minutes before they received the warning not to invest.
My issue with all of this, is that there was plenty of warning in the public domain for up to 48 hours before they invested more money.
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