Thursday, October 09, 2008
Iceland and Wales
A few months ago, the sole surviving Plaid Cymru member of Swansea Council wrote in the South Wales Evening Post that Wales could be equal to Iceland in terms of independence and prosperity. I wonder how he feels now.
The fact the seven Welsh Councils, have millions of pounds of public money tied up in failed Icelandic banks has caused much comment in the media. It was even raised in the Assembly's Finance Committee this morning even though the Welsh Government have no responsibility for this issue.
One member asked the Finance Minister and his Director if the Assembly Government has any money tied up in Icelandic banks. The answer is 'no'. We do not invest money in that way but draw it down from the Treasury as we need it. What was puzzling was that the Director of Finance did not know which bank the Government use to pay its bills, nor did she know which bank Assembly Quangos use or if they have any connections with Iceland. The Committee will be getting a written answer on that.
On Radio Wales this morning, I thought that the presenter was unnecessarily harsh when interviewing the Chief Executive of the Welsh Local Government Association. She seemed to think that the Councils involved should have seen this coming and pulled their money out. Only half an hour earlier she or her colleague had interviewed an ordinary investor who did transfer his money out last weekend, only to have the Icelandic bank cancel the transfer and hold onto the cash.
There was also some incredulity at the idea that local Councils have cash to invest. After all, are they not strapped for cash? The answer is that Councils are multi-million pound businesses who collect their income in large lumps and then spend it over the period of a year. Thus they invest balances until they are needed, generating additional income to pay for services.
Both of the Icelandic Banks were classed as ultra safe by experts and thus there was no reason why the Councils should not have used them. Even Councillors do not have crystal balls and often these investments are time restricted so they could not disinvest even if they wanted to. Unfortunately, the seven Welsh Councils are victims of the credit crunch like many others and the money may well be lost unless the Government intervenes to help them.
The fact the seven Welsh Councils, have millions of pounds of public money tied up in failed Icelandic banks has caused much comment in the media. It was even raised in the Assembly's Finance Committee this morning even though the Welsh Government have no responsibility for this issue.
One member asked the Finance Minister and his Director if the Assembly Government has any money tied up in Icelandic banks. The answer is 'no'. We do not invest money in that way but draw it down from the Treasury as we need it. What was puzzling was that the Director of Finance did not know which bank the Government use to pay its bills, nor did she know which bank Assembly Quangos use or if they have any connections with Iceland. The Committee will be getting a written answer on that.
On Radio Wales this morning, I thought that the presenter was unnecessarily harsh when interviewing the Chief Executive of the Welsh Local Government Association. She seemed to think that the Councils involved should have seen this coming and pulled their money out. Only half an hour earlier she or her colleague had interviewed an ordinary investor who did transfer his money out last weekend, only to have the Icelandic bank cancel the transfer and hold onto the cash.
There was also some incredulity at the idea that local Councils have cash to invest. After all, are they not strapped for cash? The answer is that Councils are multi-million pound businesses who collect their income in large lumps and then spend it over the period of a year. Thus they invest balances until they are needed, generating additional income to pay for services.
Both of the Icelandic Banks were classed as ultra safe by experts and thus there was no reason why the Councils should not have used them. Even Councillors do not have crystal balls and often these investments are time restricted so they could not disinvest even if they wanted to. Unfortunately, the seven Welsh Councils are victims of the credit crunch like many others and the money may well be lost unless the Government intervenes to help them.
Comments:
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'The answer is that Councils are multi-million pound businesses who collect their income in large lumps and then spend it over the period of a year.'
Sorry to disagree Peter, but local councils are NOT multi-million pound businesses, nor indeed are they, or should they be, any other sort of business. I agree that they may behave as though they are businesses, but they are tax-funded service providers, and the ruling group at any time is nothing more than their custodians pro tem.
Sorry to disagree Peter, but local councils are NOT multi-million pound businesses, nor indeed are they, or should they be, any other sort of business. I agree that they may behave as though they are businesses, but they are tax-funded service providers, and the ruling group at any time is nothing more than their custodians pro tem.
# posted by 
: 7:25 PM
: 7:25 PM
Councils are multi-million pound businesses and should be run as such; perhaps the electorate would be a bit more considerate to where they put their "X" if they regarded Councils as businesses there to deliver a service for the whole community, at the best possible price.
# posted by : 10:04 AM
: 10:04 AM
There's surprisingly nothing on the official party sites about this crisis (and I believe we are at, or approaching, a crisis in local government finance), not even on that of the Scottish LibDems. Scotland has apparently been told to go away and sort out its own troubles.
The commentators have been saying Brown needs a 'Falklands' to save his premiership…why don't we invade Iceland?
We could go in there take Kerry Katona out - with something blunt and heavy; take out a nice piece of Sara Lee chocolate gateaux; and we will have the opportunity to see the Aurora Borealis!
Ah Renaissance…
http://uk.youtube.com/watch?v=fgkyroPv7HY
More than that should be over in a week as who have Iceland every fought? A few mangy Russian skiers in the Second World War? My nanna would have seen them off!
I will sign up…who's with me???
We could go in there take Kerry Katona out - with something blunt and heavy; take out a nice piece of Sara Lee chocolate gateaux; and we will have the opportunity to see the Aurora Borealis!
Ah Renaissance…
http://uk.youtube.com/watch?v=fgkyroPv7HY
More than that should be over in a week as who have Iceland every fought? A few mangy Russian skiers in the Second World War? My nanna would have seen them off!
I will sign up…who's with me???
# posted by : 3:21 PM
: 3:21 PM
http://news.bbc.co.uk/1/hi/wales/7663339.stm
Looks like NPTCBC is about to loose £20m of council taxpayers money, the highest council tax in Wales just got higher!
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Looks like NPTCBC is about to loose £20m of council taxpayers money, the highest council tax in Wales just got higher!
# posted by : 6:48 PM
: 6:48 PM<< Home
