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Councils fear for Icelandic cash Councils fear for Icelandic cash
(about 1 hour later)
The amount of local authority cash at risk after being deposited in Icelandic banks has now risen to more than £600m.The amount of local authority cash at risk after being deposited in Icelandic banks has now risen to more than £600m.
Council leaders will meet ministers later on Thursday to push their case that the funds belonging to more than 80 authorities must be guaranteed.Council leaders will meet ministers later on Thursday to push their case that the funds belonging to more than 80 authorities must be guaranteed.
The Treasury has said councils must be treated "fairly", but has so far declined to guarantee the money.The Treasury has said councils must be treated "fairly", but has so far declined to guarantee the money.
The Local Government Association insisted frontline council services were not at risk despite the crisis.The Local Government Association insisted frontline council services were not at risk despite the crisis.
The Conservatives said the total amount of money deposited in Icelandic banks could reach £1bn once all authorities' losses were clear. The Lib Dems said a third of councils may be affected. The total so far, with 82 councils declaring how much they have invested, is £607.4m.
If deposits from public bodies, including transport and police authorities, are included the figure rises to £696.2m.
The Conservatives said the total could reach £1bn once all investments are known. The Lib Dems said a third of councils may be affected.
Council investmentsCouncil investments
The Treasury, which has given no guarantees over the money, said it wanted to "establish the facts" about financial exposure and was prepared to have discussions about a "way forward".The Treasury, which has given no guarantees over the money, said it wanted to "establish the facts" about financial exposure and was prepared to have discussions about a "way forward".
SOME CONFIRMED DEPOSITS Kent County Council, £50mTransport for London, £40mNorfolk County Council, £32.5mDorset County Council, Hertfordshire County Council, £28mBarnet Council, £27mSomerset County Council, £25mHillingdon Council, £20mWestminster City Council, £17mHertfordshire County Council, £17mBrent Council, £15mHavering Council, £12.5mCheltenham Council, £11mNorth Lincolnshire Council: Sutton Council, £5.5m Buckinghamshire County Council: Cornwall County Council, £5mPowys Council, £4mFlintshire Council, £3.7mRhondda Council, £3mNorth East Lincolnshire Council, £2.5mGloucester Council, £2m Q&A: Council funds at riskWelsh councils concernedScottish impactFull list of councils affected SOME CONFIRMED DEPOSITS Kent County Council, £50mNottingham City Council, £42m Transport for London, £40mNorfolk County Council, £32.5mDorset County Council, Hertfordshire County Council, £28mBarnet Council, £27mSomerset County Council, £25mHillingdon Council, £20mWestminster City Council, £17mHertfordshire County Council, £17mBrent Council, £15mHavering Council, £12.5mCheltenham Council, £11mNorth Lincolnshire Council: Sutton Council, £5.5m Buckinghamshire County Council: Cornwall County Council, £5mPowys Council, £4mFlintshire Council, £3.7mRhondda Council, £3m Q&A: Council funds at riskWelsh councils concernedScottish impactFull list of councils affected
Of the councils identified by the LGA, which represents authorities in England and Wales, Kent County Council has the most invested in Iceland-based banks, with £50m.Of the councils identified by the LGA, which represents authorities in England and Wales, Kent County Council has the most invested in Iceland-based banks, with £50m.
Nick Chard, cabinet member for finance, promised to "fight to get every single penny back".Nick Chard, cabinet member for finance, promised to "fight to get every single penny back".
The LGA is still trying to work out the total sums involved but deputy chief executive John Ransford disputed the Conservative claims of the amount of money at risk.The LGA is still trying to work out the total sums involved but deputy chief executive John Ransford disputed the Conservative claims of the amount of money at risk.
However, he said "significant" amounts of public money were at stake and must be protected.
"This is public money and we need to treat this in exactly the same way as individual investors in these banks," he told the BBC."This is public money and we need to treat this in exactly the same way as individual investors in these banks," he told the BBC.
Transport for London has £40m deposited in one of the affected banks. Nottingham City Council has invested £42m, while Transport for London has £40m deposited in one of the affected banks.
The next biggest known investments are Norfolk County Council's £32.5m, £30m by the Metropolitan Police, Dorset County Council's £28.1m and Hertfordshire County Council's £28m.The next biggest known investments are Norfolk County Council's £32.5m, £30m by the Metropolitan Police, Dorset County Council's £28.1m and Hertfordshire County Council's £28m.
Treasury Ministers Stephen Timms and Ian Pearson and Local Government Minister John Healy are due to hold talks with the LGA.Treasury Ministers Stephen Timms and Ian Pearson and Local Government Minister John Healy are due to hold talks with the LGA.
The Conservatives have warned that town halls could face a "massive financial shock" and be forced into council tax hikes or cuts in local services.The Conservatives have warned that town halls could face a "massive financial shock" and be forced into council tax hikes or cuts in local services.
PayrollsPayrolls
"They are not going to find it easy in the short term," shadow communities secretary Eric Pickles said."They are not going to find it easy in the short term," shadow communities secretary Eric Pickles said.
He added: "We need to look at the number of authorities that will be facing a cash-flow problem - some have their payroll on this, for others it's in terms of long-term investment."He added: "We need to look at the number of authorities that will be facing a cash-flow problem - some have their payroll on this, for others it's in terms of long-term investment."
The Lib Dems said the money at stake was "essential" for delivering local services and urged ministers to "make clear" how such funding would be protected.The Lib Dems said the money at stake was "essential" for delivering local services and urged ministers to "make clear" how such funding would be protected.
Local government minister John Healey: 'This isn't money that's lost'Local government minister John Healey: 'This isn't money that's lost'
House of Commons leader Harriet Harman said it was important to remember "the resources that have been going into local government from central government have been increasing year on year".House of Commons leader Harriet Harman said it was important to remember "the resources that have been going into local government from central government have been increasing year on year".
She added that "government services are very important indeed. We want to ensure they are protected."She added that "government services are very important indeed. We want to ensure they are protected."
The LGA insisted all the councils involved had enough money to ensure frontline services should not be affected.The LGA insisted all the councils involved had enough money to ensure frontline services should not be affected.
But it wants the same protection for councils as has been given to personal customers of IceSave and other failed Icelandic banks.But it wants the same protection for councils as has been given to personal customers of IceSave and other failed Icelandic banks.
BBC local government correspondent John Andrew said there was growing anger among local authorities, which said they had followed Treasury advice by investing surplus money in a way that would deliver the highest return for taxpayers.BBC local government correspondent John Andrew said there was growing anger among local authorities, which said they had followed Treasury advice by investing surplus money in a way that would deliver the highest return for taxpayers.
He said the councils had been told by the government that the Icelandic banks had been given a "double A" rating.He said the councils had been told by the government that the Icelandic banks had been given a "double A" rating.
Gordon Brown has said legal action will be taken over Iceland's failure to guarantee compensation for UK customers in its banks.Gordon Brown has said legal action will be taken over Iceland's failure to guarantee compensation for UK customers in its banks.
Icelandic Prime Minister Geir Haarde said his government was working to repair relations with Britain amid the crisis.Icelandic Prime Minister Geir Haarde said his government was working to repair relations with Britain amid the crisis.
Do you work, or have you previously worked, for a local council? Are you concerned about local council investments in Icelandic banks? Send us your comments using the form below:
Do you work, or have you previously worked, for a local council? Are you concerned about local council investments in Icelandic banks? Send us your comments using the form below:
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