Clarity Needed on Missing Pounds 1bn; ECONOMIC CRISIS Confusion Is the Key Word in Commons

The Journal (Newcastle, England), January 27, 2009 | Go to article overview

Clarity Needed on Missing Pounds 1bn; ECONOMIC CRISIS Confusion Is the Key Word in Commons


Byline: William Green Political Editor

COUNCIL chiefs last night appeared to admit it was unclear where up to pounds 1bn of taxpayers' money is after being caught in the Icelandic banking collapse.

The Local Government Association (LGA) said it was seeking "clarification" on where the cash was in the financial system and when town halls might get money back in evidence to MPs investigating the fiasco - with pounds 23m invested by Northumberland County Council now potentially lost.

A county council treasury chief also told the Commons local government committee that "diplomatic considerations" between Iceland and Britain were making the situation more complex to resolve.

And in a confusing twist, Northumberland's financial advisers said they did not provide advice on which financial institutions or countries to invest in - although the county council's website appeared to suggest otherwise.

Last night, Northumberland's executive member for corporate services Andrew Tebbutt said: "I think I shall have to have a discussion with our finance director Steven Mason tomorrow. That is quite surprising."

Blyth Valley MP Ronnie Campbell said the situation was a mess, adding: "The county council kept putting in their money when everybody was warned off."

The Labour MP added it reflected the wider chaos within the banking system.

"I find the whole thing staggering. I don't think even Gordon Brown or the great financial advisers know what the hell is going on," he said. David Whelan, managing director of Sector, told MPs his company provided advice on a range of areas and input into investment strategies for councils within national guidelines.

"I would like to make it quite clear that we do not provide advice to local authorities on which financial institutions or sovereign states to place their funds," added Mr Whelan.

He said his company passed on information from credit rating agencies - which judge the strength of banks - when giving evidence to the Commons local government committee.

Mr Whelan said information was passed as soon as it arrived and collated on a monthly report sent out to clients, although problems were not specifically highlighted.

"We don't know where local authorities place their funds. We are not part of that decision-making process," he said.

Evidence submitted by Sector also said cash deposits with Icelandic banks were not lost, although repayment of money and interest earned were "suspended for the foreseeable future". His comments come after Northumberland County Council invested pounds 23m with collapsed Icelandic institutions Glitner Bank, Landesbanki, Kaupthing, Singer and Friendlander (KSF) and Heritable Bank.

In evidence to Commons local government committee, the LGA said it was "too early" to provide a realistic estimate of when and how much money would be returned from Heritable and KSF. In the case of Glitner and Lansbanki, the LGA said it was seeking "clarification" on whether local government deposits had been transferred to new state-owned banks set up following the Icelandic bank collapse and what repayment priority they were being given.

Committee member Clive Betts said councils would have been better to have paid middle-managers to read the financial pages of newspapers, which long warned of problems with Icelandic banks before they affected UK councils.

ICELAND'S COALITION GOVERNMENT COLLAPSES

ICELAND'S coalition government collapsed yesterday, leaving the country in the wake of the financial crisis that wrecked its economy. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Clarity Needed on Missing Pounds 1bn; ECONOMIC CRISIS Confusion Is the Key Word in Commons
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.