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Councils hit by Icelandic banks Councils hit by Icelandic banks
(20 minutes later)
Seven Welsh councils say they have investments worth millions of pounds in Icelandic banks which have gone into receivership.Seven Welsh councils say they have investments worth millions of pounds in Icelandic banks which have gone into receivership.
At least one of Wales's four police authorities also has investments there.At least one of Wales's four police authorities also has investments there.
Around £17m of public money is tied up at Landsbanki and another institution, but that figure is expected to rise.Around £17m of public money is tied up at Landsbanki and another institution, but that figure is expected to rise.
Local authority leaders are calling for an urgent meeting with the chancellor. The UK government has frozen all the British assets of Landsbanki.Local authority leaders are calling for an urgent meeting with the chancellor. The UK government has frozen all the British assets of Landsbanki.
It follows the decision by Iceland's government to take over the company, which ran the internet bank Icesave, leaving 300,000 UK residential customers unable to access their savings.It follows the decision by Iceland's government to take over the company, which ran the internet bank Icesave, leaving 300,000 UK residential customers unable to access their savings.
The amounts ought to be small enough even for a relatively small authority not to take a big hit against its budget Tony Travers, director of the London School of EconomicsThe amounts ought to be small enough even for a relatively small authority not to take a big hit against its budget Tony Travers, director of the London School of Economics
Calls to councils in Wales have revealed that Ceredigion council alone had £5.5m in the banks.Calls to councils in Wales have revealed that Ceredigion council alone had £5.5m in the banks.
Powys council and Gwynedd council have £4m each; Flintshire council has confirmed that it had banked £3.7m with the institutions, while Rhondda Cynon Taf had deposited £3m.Powys council and Gwynedd council have £4m each; Flintshire council has confirmed that it had banked £3.7m with the institutions, while Rhondda Cynon Taf had deposited £3m.
It is also known that Monmouthshire council had accounts worth £1.2m and Caerphilly council has an undisclosed amount invested.It is also known that Monmouthshire council had accounts worth £1.2m and Caerphilly council has an undisclosed amount invested.
The Gwent Police Authority said it has £1m invested.The Gwent Police Authority said it has £1m invested.
Finance Minister Andrew Davies, AM, said that the assembly government did not have any exposure to the Icelandic banks.Finance Minister Andrew Davies, AM, said that the assembly government did not have any exposure to the Icelandic banks.
But he wanted to find out the position of other public bodies around Wales that provide services.But he wanted to find out the position of other public bodies around Wales that provide services.
The opposition local government spokesman, Conservative AM Nick Ramsay said: "It is all in our interests to ensure council finances and council services are not put at risk."The opposition local government spokesman, Conservative AM Nick Ramsay said: "It is all in our interests to ensure council finances and council services are not put at risk."
Plaid Cymru's local government spokesman Dr Dai Lloyd called on the UK government to guarantee local authority funds held by Icelandic banks.Plaid Cymru's local government spokesman Dr Dai Lloyd called on the UK government to guarantee local authority funds held by Icelandic banks.
The Welsh Liberal Democrats echoed the demand.The Welsh Liberal Democrats echoed the demand.
Jenny Randerson, AM, Welsh Liberal Democrat spokesperson for local government said: "Having bailed out the banks, and rightly agreed to to protect individual British savers, the precedent has been set by the chancellor, so why should local government be any different."Jenny Randerson, AM, Welsh Liberal Democrat spokesperson for local government said: "Having bailed out the banks, and rightly agreed to to protect individual British savers, the precedent has been set by the chancellor, so why should local government be any different."
A number of English councils also have money invested.A number of English councils also have money invested.
COUNCILS AFFECTED Ceredigion - £5.5m Powys - £4m Gwynedd - £4m Flintshire - £3.7m Rhondda Cynon Taf - £3m Monmouthshire - £1.2mCaerphilly - undisclosed Gwent Police Authority - £1m Source: BBC Wales Dragon's Eye COUNCILS AFFECTED Ceredigion - £5.5mPowys - £4mGwynedd - £4mFlintshire - £3.7mRhondda Cynon Taf - £3m Monmouthshire - £1.2mCaerphilly - undisclosedGwent Police Authority - £1m Source: BBC Wales Dragon's Eye
A spokesperson for the Welsh Local Government Association (WLGA) said the situation was being "carefully monitored".A spokesperson for the Welsh Local Government Association (WLGA) said the situation was being "carefully monitored".
In a statement, the WLGA added that councils are "clearly concerned at the security of their investments but it is too early to say whether they are at risk".In a statement, the WLGA added that councils are "clearly concerned at the security of their investments but it is too early to say whether they are at risk".
It added: "The local government associations around the UK have now made direct approaches to the Treasury to get the Chancellor to provide the necessary cover for public sector investments which have been undertaken in accord with normal practice."It added: "The local government associations around the UK have now made direct approaches to the Treasury to get the Chancellor to provide the necessary cover for public sector investments which have been undertaken in accord with normal practice."
The Local Government Association, which represents all 400 councils in England and Wales, said it did not expect significant financial problems for local authorities in the short term.The Local Government Association, which represents all 400 councils in England and Wales, said it did not expect significant financial problems for local authorities in the short term.
Tony Travers, director of the London School of Economics said councils exposed to this risk would have been unlikely to all their monies in just one bank.Tony Travers, director of the London School of Economics said councils exposed to this risk would have been unlikely to all their monies in just one bank.
"The amounts ought to be small enough even for a relatively small authority not to take a big hit against its budget and therefore, while there might be a impact on the council budget, it's not going to be a huge one," he said."The amounts ought to be small enough even for a relatively small authority not to take a big hit against its budget and therefore, while there might be a impact on the council budget, it's not going to be a huge one," he said.
However, one senior Welsh council official, who did not want to be identified told Dragon's Eye: "It's going to be a long time to work out the ramifications of this - in the meantime, it is very worrying."However, one senior Welsh council official, who did not want to be identified told Dragon's Eye: "It's going to be a long time to work out the ramifications of this - in the meantime, it is very worrying."
Chancellor Alistair Darling has said that he will ensure all UK savers with accounts with the closed internet bank Icesave will get all of their money back.Chancellor Alistair Darling has said that he will ensure all UK savers with accounts with the closed internet bank Icesave will get all of their money back.
But the position with corporate investors, such as councils, is less clear.But the position with corporate investors, such as councils, is less clear.
The matter is likely to be the subject of intense discussion at the annual meeting of the WLGA, which begins in Llandudno on Thursday.The matter is likely to be the subject of intense discussion at the annual meeting of the WLGA, which begins in Llandudno on Thursday.
Fourteen councils say they have no investments - Anglesey, Blaenau Gwent, Carmarthenshire, Conwy, Denbighshire, Pembrokeshire, Newport, Swansea, Torfaen, Merthyr Tydfil, Wrexham, Cardiff, Bridgend and Vale of Glamorgan.Fourteen councils say they have no investments - Anglesey, Blaenau Gwent, Carmarthenshire, Conwy, Denbighshire, Pembrokeshire, Newport, Swansea, Torfaen, Merthyr Tydfil, Wrexham, Cardiff, Bridgend and Vale of Glamorgan.
Neath Port Talbot says it is still assessing whether it has deposits in Icelandic banksNeath Port Talbot says it is still assessing whether it has deposits in Icelandic banks
Dragon's Eye begins its new series on Thursday 9 October on BBC 2W at 2100 BST and on BBC One Wales at 2235 BSTDragon's Eye begins its new series on Thursday 9 October on BBC 2W at 2100 BST and on BBC One Wales at 2235 BST