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Memorandum from District Councils Chief Executive Network (LAI 45)
Icelandic Investments
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
Table 1 based on DCLG Statistical Release (05 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.
April 2009 |