Headlines: October 16th, 2008

Council leaders have pressed the Icelandic Ambassador to ensure that more than 800 million pounds in local authority deposits in collapsed banks is repaid. The meeting came as the Local Government Association met Government ministers who pledged to continue to work to find a solution to the situation.

Representatives of the LGA met the Ambassador and demanded that taxpayer’s money which had been invested by councils, acting prudently, should be a priority when repayments are made. Meanwhile the British Government has given an assurance that it will continue to work with the LGA, the Icelandic authorities and the administrators handling the affairs of the collapsed banks to find ‘the best and most rapid resolution’ of the problems caused by the collapse of the banks in which local authorities had deposits of 858 million pounds.

The LGA has reported that 13 councils have said that they may face short-term difficulties although there is no risk that wages will not be paid or that services are under threat. Financial experts will be working with three of the authorities and will produce an interim report shortly. In a joint statement, issued after the meeting with the Government, the LGA said in the other 10 councils specialists were establishing contacts, establishing the facts and offering support. They will then report back to the Government and the LGA. The statement added, “We will stay in touch with these councils and experts, and the Government and the LGA stand ready to provide additional expertise if necessary.”