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Councils 'not reckless with cash' Councils 'not reckless with cash'
(20 minutes later)
Local authorities have not been "reckless" in investing more than £720m with failed Icelandic banks, the government has said. Local authorities have not been "reckless" in investing more than £760m with failed Icelandic banks, the government has said.
Deposits from almost 100 councils could be at risk, the BBC has learned. Deposits from about 100 councils could be at risk, the BBC has learned.
Ministers have met council leaders and are promising "appropriate" help on a "case-by-case basis".Ministers have met council leaders and are promising "appropriate" help on a "case-by-case basis".
Gordon Brown said he was considering "further action", but the government is not offering to guarantee authorities' deposits with Icelandic banks.Gordon Brown said he was considering "further action", but the government is not offering to guarantee authorities' deposits with Icelandic banks.
'Not pleasant''Not pleasant'
The prime minister told the BBC that the Icelandic authorities' handling of accounts had been "effectively illegal" and "completely unacceptable".The prime minister told the BBC that the Icelandic authorities' handling of accounts had been "effectively illegal" and "completely unacceptable".
The government has frozen the UK assets of Icelandic bank Landsbanki, saying local authorities will benefit from this.The government has frozen the UK assets of Icelandic bank Landsbanki, saying local authorities will benefit from this.
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, £5m class="" href="/1/hi/uk_politics/7660800.stm">Q&A: Council funds at risk class="" href="/1/hi/wales/7660300.stm">Welsh councils concerned class="" href="/1/hi/scotland/north_east/7661206.stm">Scottish impact class="" href="/1/hi/uk/7660741.stm">Full list of councils affected class="" href="/1/hi/england/7660684.stm">Impact on North of England councils class="" href="ID=">Kent vow over £50m investment class="" href="/1/hi/england/somerset/7661123.stm">Worries in Somerset over deposits They have failed not only the people of Iceland; they have failed people in Britain Gordon Brown class="" href="/1/hi/uk_politics/7662027.stm">Iceland's actions 'illegal'
But the country's prime minister, Geir Haarde said it was "not very pleasant" to have laws designed to deal with terrorists used against his country. But Iceland's prime minister, Geir Haarde, said it was "not very pleasant" to have laws designed to deal with terrorists used against his country.
BBC News has so far learned that local authorities across England, Wales and Scotland hold deposits worth £724.8m in total. BBC News has so far learned that local authorities across England, Wales and Scotland hold deposits worth £760.8m in total.
The figure reaches £860.5m when investments by 15 police authorities and Transport for London are added. The figure reaches £896.5m when investments by 15 police authorities and Transport for London are added.
The Conservatives said the total could reach £1bn once all investments are known. The Liberal Democrats said a third of councils may be affected. Treasury Ministers Stephen Timms and Ian Pearson and Local Government Minister John Healy held talks with the Local Government Association, which represents councils in England and Wales.
Treasury Ministers Stephen Timms and Ian Pearson and Local Government Minister John Healy held talks with the Local Government Association.
In a joint statement afterwards they said: "Government and the LGA agreed that there is no evidence of recklessness by local authorities."In a joint statement afterwards they said: "Government and the LGA agreed that there is no evidence of recklessness by local authorities."
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, £20mNeath Port Talbot Council, £20mWestminster City Council, £17mHertfordshire County Council, £17mBrent Council, £15m Q&A: Council funds at riskWelsh councils concernedScottish impactFull list of councils affectedImpact on North of England councilsKent vow over £50m investmentWorries in Somerset over deposits
They added: "We will judge what's appropriate on a case-by-case basis but in previous situations support has included helping local authorities restructure their financial priorities, providing additional expertise and capitalisation of expenditure."They added: "We will judge what's appropriate on a case-by-case basis but in previous situations support has included helping local authorities restructure their financial priorities, providing additional expertise and capitalisation of expenditure."
Councils say they followed Treasury advice by investing surplus money in a way that would deliver the highest return for taxpayers. Councils say they have followed Treasury advice by investing surplus money to deliver the highest return for taxpayers.
According to figures acquired so far for local authorities, Kent County Council has the largest deposit, worth £50m. According to figures acquired from local authorities, Kent County Council has the largest deposit, worth £50m.
Nottingham City Council has invested £42m, while 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 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.
Payrolls
"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.
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.

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