Press Release

LGA response to CLG Select Committee report on Icelandic investments

11 June 2009

In response to the CLG Select Committee report on council investments and the Icelandic banking collapse, Cllr Richard Kemp, Vice Chair of the Local Government Association, said:

"Failings across the entire system have affected not just councils but also other parts of the public sector as well as charities, businesses and individual savers. This report clearly shows that councils were largely let down by the organisations that they were relying on to provide up-to-date and accurate advice.

"Councils have led the way in retrieving the money and have already done much of what the committee recommends. The LGA, working with councils, currently expects to get up to 90% of this money back through the administration process. Many local authorities have already overhauled the way that they invest.

"Councils accept that things need to be done differently in the future, but these investments have generated hundreds of millions of pounds every year that go towards keeping council tax down and frontline services in place. Councils will wholeheartedly agree with the recommendation that they maintain independence over where they put their money. It is in everyone’s interests that councils continue to invest and ensure that they are doing so prudently."