Council takes action to safeguard future finances

It follows the news late last week that £8m of its investments could be affected by the banking crisis in Iceland. The Council, like all UK councils, is expected to invest its funds in financial institutions worldwide, in accordance with Government and Chartered Institute of Public Finance guidance. The Council currently has £43m of investment in 16 different banks in Iceland, the UK, Republic of Ireland and Australia.

At a meeting of Strategy Group on Thursday (October 9), councillors endorsed the need for Council’s Directors to be able to take urgent decisions to reduce the risk to future investments. These measures include directing council finances into ‘safe havens’ such as central government savings accounts.

The Council is supporting the Local Government Association in lobbying the Chancellor to ensure guarantees are in place for local authority investments.

Daventry District Council’s Managing Director Simon Bovey said: “We are exploring all means to maximise the security of our deposits. The current conditions of the global financial market are unprecedented and we need to manage the local impact of this global turmoil, such as directing our funds to Government deposit accounts.”

The Council currently has £8m frozen in four Icelandic banks – Landsbanki (£3m), Heritable (£1m), Glitner (£2m) and Kaupthing Singer & Friedlander (£2m).