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Leaders meet over banks collapse Leaders meet over banks collapse
(about 2 hours later)
Scottish council leaders are due to meet in Edinburgh to discuss the impact of the collapse of Iceland's banking system.Scottish council leaders are due to meet in Edinburgh to discuss the impact of the collapse of Iceland's banking system.
Eight councils have more than £45m invested in Icelandic banks.Eight councils have more than £45m invested in Icelandic banks.
And a £120m project to build or refurbish Aberdeen schools is being funded by money from an Icelandic bank.And a £120m project to build or refurbish Aberdeen schools is being funded by money from an Icelandic bank.
Finance Secretary John Swinney has sought assurances from the chancellor that all Scottish council deposits in Icelandic banks will be protected.Finance Secretary John Swinney has sought assurances from the chancellor that all Scottish council deposits in Icelandic banks will be protected.
The UK Government has agreed that no council acted recklessly.The UK Government has agreed that no council acted recklessly.
The eight Scottish local authorities confirmed they had investments in the country's troubled financial institutions including Landsbanki, Heritable and Glitnir.The eight Scottish local authorities confirmed they had investments in the country's troubled financial institutions including Landsbanki, Heritable and Glitnir.
Glasgow City Council has no Icelandic investments, but manages the pension fund for former Strathclyde local authority workers, which has a £4m exposure in Iceland.
However, the council said this is in the context of a £8bn to £9bn pension fund, and said pensioners should not panic.
Strathclyde Fire and Rescue Service also revealed it had £3m invested in Heritable.
A Scottish Government spokesman said: "We are in touch with Cosla to clarify the overall sums involved, but we understand they are very significantly less than the hundreds of millions of pounds that councils in England are reported to have on deposit."A Scottish Government spokesman said: "We are in touch with Cosla to clarify the overall sums involved, but we understand they are very significantly less than the hundreds of millions of pounds that councils in England are reported to have on deposit."
AFFECTED SCOTTISH COUNCILS North Ayrshire: £15m investedScottish Borders: £10m investedSouth Lanarkshire: £7.5m investedEast Ayrshire: "Potential exposure" of between £3m and £5mSouth Ayrshire: £5m of depositsMoray: £2m of depositsPerth and Kinross: £1m of depositsEast Renfrewshire: £1m investedAberdeen City: "Icelandic involvement" in £120m schools project Scottish councils give their reactionWhat happened to Iceland?Icelandic compensation to start Finance Secretary John Swinney has written to the chancellor to seek reassurances that all deposits by local authorities in all banks, based both in the UK and elsewhere, are given the same protection as the UK Government has put in place in relation to certain Icelandic banks and retail accounts.AFFECTED SCOTTISH COUNCILS North Ayrshire: £15m investedScottish Borders: £10m investedSouth Lanarkshire: £7.5m investedEast Ayrshire: "Potential exposure" of between £3m and £5mSouth Ayrshire: £5m of depositsMoray: £2m of depositsPerth and Kinross: £1m of depositsEast Renfrewshire: £1m investedAberdeen City: "Icelandic involvement" in £120m schools project Scottish councils give their reactionWhat happened to Iceland?Icelandic compensation to start Finance Secretary John Swinney has written to the chancellor to seek reassurances that all deposits by local authorities in all banks, based both in the UK and elsewhere, are given the same protection as the UK Government has put in place in relation to certain Icelandic banks and retail accounts.
Mr Swinney told BBC Radio's Good Morning Scotland programme: "Obviously we're in contact with local authorities that are affected and we're still working to ensure that we've got a complete and accurate picture of all that's involved.Mr Swinney told BBC Radio's Good Morning Scotland programme: "Obviously we're in contact with local authorities that are affected and we're still working to ensure that we've got a complete and accurate picture of all that's involved.
"But I think the focus of what we have to do is to ensure that we have the necessary assurance and guarantees in place to support local authorities whose investments are now in some doubt.""But I think the focus of what we have to do is to ensure that we have the necessary assurance and guarantees in place to support local authorities whose investments are now in some doubt."
He said he had seen statements from affected councils saying there would be no impact on services or on the council tax.He said he had seen statements from affected councils saying there would be no impact on services or on the council tax.
Labour finance spokesman Andy Kerr urged the UK Government to offer equal support to all councils across the country.Labour finance spokesman Andy Kerr urged the UK Government to offer equal support to all councils across the country.
He said: "Whatever support is offered I expect assurances from the Treasury that there is no disparity between the way that Scottish local authorities are treated and those in the other parts of the UK."He said: "Whatever support is offered I expect assurances from the Treasury that there is no disparity between the way that Scottish local authorities are treated and those in the other parts of the UK."
Iceland talks
A delegation of Treasury officials is going to Reykjavik to discuss the Icelandic bank crisis and its effect on the UK.
The meetings follow sharp exchanges of words between Prime Minister Gordon Brown and his Icelandic counterpart Geir Haarde.
Chancellor Alistair Darling has announced that all UK savers affected by the Icelandic bank crisis will be protected.
But the government has not yet offered the same for more than £900m known to have been invested in Icelandic banks by UK councils, police and transport authorities.
The Association of Chief Police Officers in Scotland said it did not believe any of the country's eight forces had investments in the collapsed banks.
Spread investmentsSpread investments
Following the collapse of the BCCI bank in 1991, councils were obliged to spread their investments around. In that collapse, the Western Isles Council lost £23m.Following the collapse of the BCCI bank in 1991, councils were obliged to spread their investments around. In that collapse, the Western Isles Council lost £23m.
The Scottish Office bailed the council out and the authority has since repaid all the money.The Scottish Office bailed the council out and the authority has since repaid all the money.
The discussion is now between the Scottish Government which has devolved responsibility for local councils and Westminster which retains responsibility for financial regulation.The discussion is now between the Scottish Government which has devolved responsibility for local councils and Westminster which retains responsibility for financial regulation.
Scottish councils will urge the two to ensure they do not get caught in the middle of a row similar to that over council tax benefit where Westminster said it would withdraw payments if Holyrood scrapped the tax.Scottish councils will urge the two to ensure they do not get caught in the middle of a row similar to that over council tax benefit where Westminster said it would withdraw payments if Holyrood scrapped the tax.
Voluntary organisationsVoluntary organisations
There is also concern elsewhere about the impact of the collapse of Iceland's banks in the UK.There is also concern elsewhere about the impact of the collapse of Iceland's banks in the UK.
The umbrella body for voluntary organisations in Scotland, the Scottish Council for Voluntary Organisations (SCVO), said it was trying to assess how many members have been affected.The umbrella body for voluntary organisations in Scotland, the Scottish Council for Voluntary Organisations (SCVO), said it was trying to assess how many members have been affected.
Lucy McTiernan the deputy head of the SCVO said: "We do know that it's very, very worrying because individual voluntary organisations can have their reserves completely wiped out by this crisis, which means they will really struggle to continue into the future."
The SCVO has asked to meet the Scottish secretary, Jim Murphy, to discuss ways of protecting the voluntary sector from the wider effects of the financial crisis.The SCVO has asked to meet the Scottish secretary, Jim Murphy, to discuss ways of protecting the voluntary sector from the wider effects of the financial crisis.