County has £17m with insolvent Icelandic bank and Herts Police Authority has £3m
PUBLISHED: 12:31 09 October 2008 | UPDATED: 13:39 06 May 2010
HERTS County Council has revealed that it has £17 million invested in insolvent Icelandic banks, along with the Herts Police Authority which has deposits of £3 million. The problems with Landsbanki first surfaced on Tuesday when a statement on its intern
HERTS County Council has revealed that it has £17 million invested in insolvent Icelandic banks, along with the Herts Police Authority which has deposits of £3 million.
The problems with Landsbanki first surfaced on Tuesday when a statement on its internet banking subsidiary Icesave's website warned UK customers that they could not move money into or out of their accounts.
Landsbanki, which also owns Hertitable, was then taken over by the Icelandic Government to prevent its collapse but there were fears that British customers would lose out.
Herts County Council has investments in both Landsbanki and Heritable, while all of the police authority's £3 million is deposited with Heritable.
It was also confirmed that the county council has £7 million in Glitnr and £4 million in Kaupthing - other Icelandic banks.
Yesterday (Wednesday) the Chancellor Alistair Darling said all UK savers with the internet bank Icesave would get their money back.
But it wasn't clear if that would apply only to individual personal savers or would also include institutional savers like the county council and council chiefs were seeking a meeting today (Thursday) to urge protection for their funds.
The Liberal Democrat leader on the county council, Cllr Chris White who represents Central St Albans, said: "This is rather grave news. The amount involved is seven per cent of the adult care budget. And who knows what other banks are fundamentally in trouble?"
He is calling for deposits of institutions, including councils and charities, to be protected alongside personal deposits. He said: "It is clear that there needs to be a guarantee for individual people's savings. But council services can be just as vital to many members of our community.
A spokesperson for the county said: "In common with other local authorities, Herts County Council has some deposits in Icelandic banks. The national situation is changing hour by hour and we are seeking the best possible advice.
"We have deposits in banks, including all the major clearing banks in the UK and some foreign banks. We have an income strategy and investment list which is approved and reviewed on a day-to-day basis. It seeks to minimise the risks with regard to any of the assets we have invested."
She added: "We review the risks of any investment we make in order to protect public money."
A spokesperson for Herts Police Authority, which sets the budget for the Constabulary, said: "The Police Authority has £3 million with Heritable Bank and we are seeking clarification at the moment as to their current status. But I would like to emphasise that there is no risk to the high level of police services that we currently provide in Herts. The Constabulary is going to continue to focus on improving policing even further."
St Albans District Council confirmed that it had no deposits with the Icelandic banks.