That's Why Councils Go To Iceland

The list of Welsh Councils who have money stuck in Icelandic bank account continues to grow, with Caerffili announcing that they have £15m deposited in the island's troubled institutions. They join Ceredigion (£5.5m), Powys (£4m), Gwynedd (£4m), Fflint (£3.7m), Rhondda Cynon Taf (£3m), Mynwy (£1.2m) and Gwent's Police Authority(£1m) in sweating on the fate of their deposited millions. (Neath Port Tabot is still checking!)

Update: Neath Port Talbot have confirmed they have £20m in Icelandic banks, putting them squarely at the top of the "Welsh Councils Crapping Themselves" list, South Wales Police have £7m in jeopardy while Dyfed-Powys Police complete the list with nother £2m and and bringing the total of Welsh publc money at risk to £66.4m.

Plaid AM Chris Franks said today:

"When I was a councillor I met with local authority treasurers, my first question was always 'are you sure the money is invested in a safe haven rather than in accounts that paid the top interest rates'. I would hope members of local authorities in Wales would have asked similar questions."

If that was meant to be a political dig towards Rhondda's Labour controlled council, as Vaughan suggests it was, then it's a stupidly misguided one. Until a week or two ago the Icelandic banks were considered totally secure and no amount of questioning his local authority treasurers would have suggested otherwise. That's why Kent Council has £50m there, why Transport for London have £40m there and why Welsh Councils have more than £36m there, £19m of which, and take note Chris, was put there by Plaid Cymru controlled councils.

Franks isn't the only one to speak nonsense on this issue. The Taxpayer's Alliance also seems to totally misunderstand how the world works. Their spokesman stated:

"People will be shocked that the councils had this money stashed away in the first place. Every year we hear that councils don’t have enough money and need to raise taxes but it seems they have had sufficient excess tax to salt tens of millions of pounds away. The fact that they have invested this money and seem to have lost it is even more shocking and is sadly yet another reminder of the poor financial management in local councils. In short, they should not have stashed this money in the first place and they simply weren’t equipped to try to be clever in the markets with it.”

Council get their funding in blocks from the Assembly, what does the Taxpayer's Alliance think they should do with it through the year, stash it under the mattress?