Business as usual for council

It’s business as usual. That’s the message from Hertsmere Borough Council following the news of a £1m investment in an Icelandic bank which faces collapse.

Cllr Morris Bright, Leader of the Council, said: "We will not let the international problems affect day-to-day running of our services locally.
 
“Hertsmere is in a strong financial position. While £1m is a lot of money, because of investments elsewhere we are set to earn more than £1.5m in interest this year overall. There will be no loss of services in Hertsmere and no pulling back on community projects and funding - such as the community theatre in Borehamwood and the improvements to our historic Rose Garden in Bushey.
 
“And let me assure residents that we will not allow the national and international difficulties that we hear and read about daily, affect how our council tax rates are set.”
 
Hertsmere has been liaising with the Local Government Association in the wake of the news. The LGA has now called for a Government inquiry, led by the Financial Services Authority, into how credit ratings agencies continued to give Icelandic banks high credit ratings right up until a matter of days before they went into administration or receivership.
 
Cllr Bright continued: “We have strict rules and regulations around our financial management and we know that we acted in accordance with the Government guidelines around our investments.
 
“Nevertheless we are keen to recover any monies wherever possible and will be working closely with the LGA and administrators to achieve this. Every pound lost is one pound too many.”
 
Cllr Margaret Eaton, Chairman of the LGA, commented: ”The good news for council taxpayers is that discussions with the administrators have been hugely encouraging. The administrators considered that the book value of the assets of each business appeared to be of the same order of magnitude as the liabilities, although it is too early to give exact figures.
 
“The evidence shows that, overwhelmingly, town halls have acted prudently and within strict guidelines to get the best rates of interest on savings whilst investing in institutions deemed to be strong.”