Sponsored by
Peterborough could lose £3m in Iceland banks collapse
11.45am: Action is being taken today to safeguard £3 million of Peterborough council taxpayers' money which has been deposited in two failed Icelandic banks.
11.45am: Action is being taken today to safeguard 3 million of Peterborough council taxpayers' money which has been deposited in two failed Icelandic banks.Peterborough City Council chiefs have revealed that 3 million had been deposited with the UK subsidiaries of two Iceland-based banks.
Some 2 million has been invested with Kaupthing Singer and Friedlander, which is the UK subsidiary of Kaupthing Bank and which has been placed into administration.
And a further 1 million has been deposited with Heritable Bank, a subsidiary of the collapsed Landsbanki.
The city council is one of about 100 local authorities across the UK that have been left exposed by the banking failure in Iceland, with total investments at risk thought to be more than 720 million.
What do you think?
Comment below, email us: news@ peterboroughtoday.co.uk or telephone the newsdesk 01733 588719.
Related:
National news: Video: Treasury in Iceland for bank talks, 10 October 2008.
-------------------------------------
The city council's investments are among the smallest, with Kent County Council topping the list with deposits of 50 million.
Neighbouring Cambridge City Council has 9 million deposited in Icelandic banks made up of 5 million with Landsbanki and 4 million with Heritable Bank.
Peterborough council leaders moved swiftly yesterday to reassure residents that the matter will not have any impact on day-to-day services and will not mean an increase in council tax bills.
The local authority has an annual budget of 237 million and investments of 88 million spread across 30 different banks and building societies in the UK and overseas. Last year, its investments generated 4.6 million in interest for the city council.
Council leader Cllr John Peach said: "People in Peterborough will not be affected by this at all.
"There will not be any impact on the day-to-day business of the city council, on frontline services or on council tax."
He added: "This is a prudent and well-run council, and we have 6 million in reserve to balance any loss."
But Cllr Peach was adamant that the city council was not to blame for the decision to invest in Icelandic banks.
He said: "The money was invested in triple A-rated savings and institutions that had been rated by the Treasury."
He added: "We are supporting the Local Government Association's ongoing discussions with the Treasury to obtain assurances that its investments will be fully protected in Icelandic banks."
GMB union national officer Brian Strutton said: "I believe the financial effects will be smoothed over through a combination of using council contingencies and reserves, together with help from central government.
"However, there are some serious questions that need to be answered.
"What are councils doing with spare money? Why are they using high-risk accounts? Is it a coincidence that so many of them have invested in these uncertain Icelandic banks?"
Campaign director at the TaxPayers' Alliance Mark Wallace, said: "People will be shocked that the councils had this money stashed away in the first place."
Email to a friend
Print this page
Looking for...
Featured advertisers
Jobs
Search for a job
Motors
Search for a car
Property
Search for a house
Weather for Peterborough
Saturday 26 May 2012
Today
Sunny
Temperature: 11 C to 23 C
Wind Speed: 18 mph
Wind direction: East
Tomorrow
Sunny
Temperature: 11 C to 23 C
Wind Speed: 16 mph
Wind direction: East
Your view
Please sign in to be able to comment on this story.