Memorandum by the District Councils Chief
executive Network (LAI 45)
I am writing to you in your capacity as chair
of the Commons Communities and Local Government select committee.
On behalf of the District Councils Chief Executive Network, (a
national network representing all District Council Chief Executives).
I wish to bring to your attention some key points arising from
the CLG statistical release titled "Local Authority Icelandic
Bank Investments as at 31 December 2008" published on
5 March 2009, which was a digest of investments made by local
authorities in Icelandic institutions.
I have taken the opportunity to summarise the
key findings from that report, which I have reproduced in the
table below. It sets out the classes of authority which had investments
in Iceland. For example there are 34 Shire Counties 15 of
whom had investments in Iceland. The average value of those 15 authorities
exposure was £18 million.
|
| Counties | % of type of Authority
with Icelandic
Investments
| Average
Investment
Exposure
|
|
| Shire Counties | 44% | £18m
|
| London Boroughs | 33% | £13.9m
|
| Unitary | 25% | £6.3m
|
| Shire Districts | 24% | £3.9m
|
|
Table 1 based on DCLG Statistical Release (5 March 2009) Local Authority Icelandic Bank Investments as at 31 December 2008.
| | |
Often the first comment made in almost any situation is that
smaller authorities (districts) have a particular problem due
to "capacity". I fear that sentiment has also circulated
around the issue of Icelandic loans. The evidence shows that the
smaller authorities (districts) far from having a question over
capacity would seem to have proven themselves to be the type of
authority least likely to have been caught out.
The table does not support the notion that large specialist
units are necessarily the best strategy. Being light on ones feet
and flexible is what is needed in changing markets.
These however have been quite exceptional market conditions.
Governments; the city itself; even the Audit Commission were caught
out.
I would be grateful if you could please note these findings
as I want to dispel the notion that Shire Districts have the biggest
problem resulting from investments in Icelandic institutions.
25 March 2009
| 
