Finance Teams at KCC and Canterbury City Council have questions to answer (Canterbury & Whitstable Liberal Democrats)

Canterbury & Whitstable Liberal Democrats <info@cantlibdem.org.uk>

Finance Teams at KCC and Canterbury City Council have questions to answer

October 13, 2008 10:52 AM

"Questions must be answered by finance teams at Kent County Council and Canterbury City Council", says Guy Voizey, prospective parliamentary candidate for Canterbury and Whitstable Liberal Democrats, in the light of news that KCC has £50 million and CCC has £6 million of taxpayers tied up in Icelandic banks.

There are two immediate issues. The first is the retrieval of any funds invested with the Icelandic banks. From a council perspective, this is largely in the hands of the government. However, the second, the need to try to prevent similar situations arising again, is something which councils can take steps to address now. In the event of a similar bank failure, councils risk losing taxpayers' money. Our councils' treasury teams need to place greater emphasis on security of principal when investing. This involves learning the lessons from this situation. In particular, which procedures were followed when KCC decided to withdraw cash from Northern Rock and other banks? Were these same procedures followed when analysing the investments with the Icelandic banks?

In the longer term, there are other questions which need to be answered:

1 - what is the role of, and how do the councils rely upon, external treasury advisers?

2 - what advice has central government been giving councils on investment policy? If central government has told councils to make funds work better for them, then this borders on negligence.