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Council cash woes go to assembly Council cash woes go to assembly
(20 minutes later)
Welsh Secretary Paul Murphy says the assembly government will be responsible for aiding councils in the bank crisis.Welsh Secretary Paul Murphy says the assembly government will be responsible for aiding councils in the bank crisis.
Eight Welsh local authorities are worried about £56m they have in Icelandic banks or their subsidiaries. Nine Welsh local authorities are worried about £60m they have in Icelandic banks or their subsidiaries.
Mr Murphy said since local government is devolved, it will be for the assembly government to help, but the Treasury also had a role to play.Mr Murphy said since local government is devolved, it will be for the assembly government to help, but the Treasury also had a role to play.
But he stressed that people should not think their services would be cut or council tax was going to suddenly rise.But he stressed that people should not think their services would be cut or council tax was going to suddenly rise.
Welsh Liberal Democrat leader Mike German said the ministers were "sleepwalking into a crisis," and Conservative Shadow Welsh Secretary Cheryl Gillan said councils "needed certainty".Welsh Liberal Democrat leader Mike German said the ministers were "sleepwalking into a crisis," and Conservative Shadow Welsh Secretary Cheryl Gillan said councils "needed certainty".
More than £66m of public money from Welsh councils and three police authorities is tied up in Icelandic banks now in receivership. PUBLIC BODIES AFFECTED Neath Port Talbot - £20mCaerphilly - £15mCeredigion - £5.5mPowys - £4mGwynedd - £4mFlintshire - £3.7mRhondda Cynon Taf - £3m Monmouthshire - £1.2mGwent Police Authority - £1mSouth Wales Police Authority - £7mDyfed-Powys Police Authority - £2m Source: BBC Wales' Dragon's Eye WELSH PUBLIC BODIES AFFECTED Neath Port Talbot - £20mCaerphilly - £15mCeredigion - £5.5mPowys - £4mGwynedd - £4mCarmarthenshire - £4mFlintshire - £3.7mRhondda Cynon Taf - £3m Monmouthshire - £1.2mGwent Police Authority - £1mSouth Wales Police Authority - £7mDyfed-Powys Police Authority - £2m Source: BBC Wales' Dragon's Eye
More than £70m of public money from Welsh councils and three police authorities is tied up in Icelandic banks now in receivership.
The councils include Neath Port Talbot, which has the most invested, at £20m, and Cerphilly, with £15m.The councils include Neath Port Talbot, which has the most invested, at £20m, and Cerphilly, with £15m.
It has now emerged that Carmarthenshire is the latest council affected, with £4m in an Icelandic bank.
The others are Ceredigion, Powys, Gwynedd, Flintshire, Rhondda Cynon Taf, Monmouthshire, Gwent Police Authority, South Wales Police Authority, and Dyfed-Powys Police Authority.The others are Ceredigion, Powys, Gwynedd, Flintshire, Rhondda Cynon Taf, Monmouthshire, Gwent Police Authority, South Wales Police Authority, and Dyfed-Powys Police Authority.
Mr Murphy said: "Councils might well have to capitalise some of their spending, which technically means that you can spread it over a much longer period, and for those rules to be changed, the Treasury would have to agree to that.Mr Murphy said: "Councils might well have to capitalise some of their spending, which technically means that you can spread it over a much longer period, and for those rules to be changed, the Treasury would have to agree to that.
"So it's a bit of each really.""So it's a bit of each really."
He emphasised, however, that people should not worry about cuts in services in sudden increases in council tax. He emphasised, however, that people should not worry about cuts in services in sudden increases in council tax.. The credit crunch has now hit the Welsh Assembly Government and at the moment their silence is deafening in what they are going to do in response Mike German, Welsh Liberal Democrat leader
He said: "That's not going to happen. Because although these [monies] when, added up, is a large sum, individually, when compared to the huge sums that local authorities spend, they're not in the category of seeing services reduced." Until now, the assembly government had suggested financial help for Welsh councils would come from the Treasury, as the Local Government Association was negotiating with them on behalf of Welsh, as well as English councils. He said: "That's not going to happen. Because although these [monies] when, added up, is a large sum, individually, when compared to the huge sums that local authorities spend, they're not in the category of seeing services reduced."
The credit crunch has now hit the Welsh Assembly Government and at the moment their silence is deafening in what they are going to do in response Mike German, Welsh Liberal Democrat leader Any help for the three Welsh police authorities with money in Iceland will come from the Treasury, because policing is not a devolved matter. Until now, the assembly government had suggested financial help for Welsh councils would come from the Treasury, as the Local Government Association was negotiating with them on behalf of Welsh, as well as English councils.
Mr German, who held the Economic portfolio when the Lib Dems shared power with Labour in the assembly until 2003, said current assembly ministers had not "given the response I would expect from a responsible government". 'Stark choices'
Any help for the three Welsh police authorities with money in Iceland will come from the Treasury, because policing is not a devolved matter.
Mr German, who held the economic portfolio when the Lib Dems shared power with Labour in the assembly until 2003, said current assembly ministers had not "given the response I would expect from a responsible government".
"The choices are quite stark for us and the credit crunch has now hit the Welsh Assembly Government and at the moment their silence is deafening in what they are going to do in response.""The choices are quite stark for us and the credit crunch has now hit the Welsh Assembly Government and at the moment their silence is deafening in what they are going to do in response."
Mrs Gillan has written to Murphy offering to help to find solutions to the crisis affecting councils. Mrs Gillan has written to Mr Murphy offering to help to find solutions to the crisis affecting councils.
'Depositors'
In a letter she said: "The Treasury has announced that they will arrange full compensation for individuals affected by this collapse but the situation remains uncertain over depositors such as our Welsh councils.In a letter she said: "The Treasury has announced that they will arrange full compensation for individuals affected by this collapse but the situation remains uncertain over depositors such as our Welsh councils.
"As a result local government finances are at risk and people will be concerned about their local services and council tax bills. We need to clear up this uncertainty.""As a result local government finances are at risk and people will be concerned about their local services and council tax bills. We need to clear up this uncertainty."
Neath Port Talbot council has a total of £20m invested in the Icelandic banking system, with £8m in two banks and a further £12m in the UK subsidiaries.
Caerphilly has £10m invested with Heritable Bank, a UK subsidiary of Landsbanki and £5m with Landsbanki.
Mr Murphy's comments came as the Welsh Local Government Association was meeting in Llandudno.Mr Murphy's comments came as the Welsh Local Government Association was meeting in Llandudno.