"You Couldn't Make It Up": Kent County Council invested £3m in Iceland banks AFTER warning (Shepway Liberal Democrats)

"You Couldn't Make It Up": Kent County Council invested £3m in Iceland banks AFTER warning

December 17, 2008 11:05 AM

Kent County Council deposited £3m in an Icelandic bank a day after being warned against it, a report by Price Waterhouse Cooper has revealed. An e-mail was sent by a financial advisor at 3pm on 30 September to an officer at the council, who did not read and act on the information.

Kent Council had £17m invested in Landsbanki, a further £18.35m in its UK subsidiary Heritable, and £15m in Glitnir Bank. All three banks collapsed in October.

Commenting, Shepway Liberal Democrat Councillor Tim Prater said:

"You couldn't make it up: the processes in place at Kent were so weak that the right people did not receive crucial investment information at the right time. For information from advisers as important as the advice that Heritable Bank was no longer a sound investment to be passed to just one person is incredible. It shows huge weaknesses in the communication strategy at the Council.

"Kent can try to get off the hook as much as they like but it just doesn't wash. Others had been raising questions about the safety of Icelandic banks - even in Parliament - months before the collapse. Other authorities had not invested in Iceland as they deemed the investment to be too high in risk.

"Kent''s investment decisions have left millions of pounds at big risk, which unless it is recovered soon will have a big impact on future budgets and Council tax levels."

Shepway Liberal Democrats