There are important questions which Powys County Councillors should be asking of their officers about the Council's deposits in Icelandic Banks. And these questions should be asked in public. The first question is when the most recent deposit of one million pounds in Landbanksi was made - and if it really was made on 5th September 2008, the next question should be whether this was a sensible and reasonable investment to make. We do know that a lot of other Councils had decided against Icelandic investments well before that date - as long ago as March I'm told.
The purpose of this post is not to be critical of the Council's investment decision. But I do think there is a need for a genuine inquiry - and the internal Councillor inquiry that's been set up has not much credibility, in that Councillors on the inquiry team were seen publicly applauding the officer who had taken the decisions before the inquiry had even met. This post asks whether the Council has a legitimate (or at least a moral) claim against the UK Government.
The Icelandic Bank balloon went up on October 8th (or thereabouts) - just one month after Powys made its one million deposit. But there has been an increasing number of reports that the British Government knew of the problems with Icelandic Banks as long ago as March, but kept the information secret. There really must be an 'Independent' inquiry into this. It would be quite shocking if the British Government stood back and allowed Powys County Council to invest one million pounds in banks that it knew to be an unacceptable risk - and I'm sure many other Councils as well.
6 comments:
The utter and even wilfull incompetence of Powys County Council officers and a number of the councillors, notably Old Wood Independents, is staggering! We really need a root and branch (excuse the pun) review of not only the Icelandic Bank situation, but also other crazy PCC policies such as the turning off of street lights or other poor planning decisions. It is time to cull the vastly overpaid staff at County Hall and begin a War on Incompetence. I just hope the new County Councillors are up to the task. I shall be investing my political resources to help them do so.
Roman - I believe that the financial pressures on the Council are going to force the root and branch review that you are looking for. I have been genuinely surprised that there seems to be so little concern about the Icelandic investments.
I went off Iceland (and by default Iceland banks) when I learnt that Iclanders shoot polar bears on sight. Whenever a polar bear manages to swim its heart out and land on what passes for a beach on Iceland ... up comes along Butch Icelander and the Sundance shooter to shoot the polar bear dead. I'm glad Iceland's economy is in the toilet - how dare they shoot such creatures who landed by their own power and determination in Iceland for the wicked people to shoot them dead.
Iceland - the place where polar bears are shot on sight. When a polar bear makes it to what passes for an Icelandic beach, out come the big guns, and "*bang* *bang* they shoot them dead", *bang* *bang* the polar bears go down.
... and there's the issue of Icelandic commercial whaling. They harpoon them and strip their bodies’ bear.
... the banks in Iceland are a bit iffy too. For some reason some Welsh councils thought it a good idea to keep money in them. Welsh money 'mark you'.
Glyn .You really need to find out who were advising Powys. In April Fitch announced that the three Icelandic banks were being put on negative rate watch. There were down gradings in May, September and October. In July the cost of insuring Iceland's banks against default rose to 10% of debt levels compared to 0.3% the year before.Kent and Norfolk CC which have huge losses did not make any further investments in Icelandic banks after the first warnings in March/April. No one can blame the UK government because the warnings were there for anyone who bought a copy of the FT. Those responsible are the officers/members who continued to invest as late as September when it was clear to anyone with even an elementary understanding of banking that all of Iceland's banks were in trouble. Investment decisions as the Bank of England Non Investment Products Code makes quite clear are the responsibilty of each individual council. Some authorities have adopted a cautious approach to investments whilst others have gone for the biggest potential returns and had their fingers burnt in the process. Local democracy requires those responsible for decisions to accept the consequences of those decisions. It is for this reason that I would argue that there should be no bail out from central government funds for any of the councils involved.
Jeff - I will post your comment as a seperate post - in the despairing hope that at least one County Councillor will read it and start asking some b***** questions.
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