Stern words today from the Audit Commission about the 127 councils who stuck £954m in Icelandic banks which subsequently collapsed.
Singled out for the wooden spoon are the seven which put £32.8m in Reykjavik(pictured) in early October – in the week after the ratings agencies had downgraded the Icelandic banks and one, Glitnir, had already been nationalised on September 29.
Here is the role of shame:
London Borough of Havering £2m
Kent County Council £3.3m
Redcar and Cleveland Borough Council £4m
Restormel Borough Council £3m
Bridgnorth District Council £1m
Kent County Council (again) £5m
South Yorkshire Pensions Authority £10m
North East Lincolnshire Council £3m
North East Lincolnshire Council (again) £1.5m
The report says: “In some cases, a contractual agreement to place the deposit may have been made before 30 September.”
In defence of the local authorities, their savings in Icelandic banks did drop from £2bn at the start of 2008 to the £953m when the Reykjavik banks imploded.
For the full report read here.
Regular readers of this column may remember which public finances watchdog was embarrassed by the Icelandic saga because it, too, had £10m placed there. That’s right: the Audit Commission.
In today’s report it says:
“The Audit Commission itself made deposits totalling £10 million in two Icelandic banks. We have reviewed our own approach, identified weaknesses and taken action. The lessons were captured in an internal audit report and an external review which were published on the Commission’s website. The Commission’s own exposure does not compromise our duty to understand what went wrong nor lessen our ability to analyse and comment.“
Jim Pickard
Kiran Stacey