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| Version 2 | Version 3 |
|---|---|
| Councils meet over Iceland crisis | Councils meet over Iceland crisis |
| (about 1 hour later) | |
| Local authority officials will meet ministers later to discuss help for 116 councils affected by the near-collapse of the Icelandic banking system. | Local authority officials will meet ministers later to discuss help for 116 councils affected by the near-collapse of the Icelandic banking system. |
| The Local Government Association says none is in danger of cutting services, but it wants an inquiry into the advice given to councils ahead of the crisis. | The Local Government Association says none is in danger of cutting services, but it wants an inquiry into the advice given to councils ahead of the crisis. |
| The government has already set up a rapid response unit to help any local authorities in severe difficulty. | The government has already set up a rapid response unit to help any local authorities in severe difficulty. |
| Councils and other public bodies have about £1bn invested in Icelandic banks. | Councils and other public bodies have about £1bn invested in Icelandic banks. |
| The country's attractive interest rates had lured many customers from overseas, but last week its biggest banks had to be nationalised. | The country's attractive interest rates had lured many customers from overseas, but last week its biggest banks had to be nationalised. |
| 'First priority' | 'First priority' |
| Funds from councils are now locked up in the banks, along with deposits belonging to individual British savers. | Funds from councils are now locked up in the banks, along with deposits belonging to individual British savers. |
| The UK Treasury has said it is working with the Icelandic government to ensure all depositors get their money back as soon as possible. | The UK Treasury has said it is working with the Icelandic government to ensure all depositors get their money back as soon as possible. |
| On Tuesday, Communities Secretary Hazel Blears defended the government's investment advice to councils, saying it had been "prudent and sensible". | On Tuesday, Communities Secretary Hazel Blears defended the government's investment advice to councils, saying it had been "prudent and sensible". |
| She insisted that getting depositors money back was the government's "first priority" and in the meantime, the rapid response unit would help any councils in trouble. | |
| "We are taking this action to protect council taxpayers, communities and those public services on which the most vulnerable people in our society depend," Ms Blears said. SOME COUNCIL INVESTMENTS Kent County Council - £50mNottingham City Council - £42mNorfolk County Council - £32.5mDorset County Council - £28.1m | |
| Shadow communities secretary Eric Pickles said the government must give more details of which bodies had been affected by the crisis - and how seriously. | Shadow communities secretary Eric Pickles said the government must give more details of which bodies had been affected by the crisis - and how seriously. |
| He said "there is no detailed survey of this exposure". | He said "there is no detailed survey of this exposure". |
| "Local taxpayers have a right to know the threat to their council tax bills and local services." | "Local taxpayers have a right to know the threat to their council tax bills and local services." |
| The LGA is demanding an inquiry into why credit rating agencies continued to rate Icelandic banks relatively highly just days before they collapsed. | The LGA is demanding an inquiry into why credit rating agencies continued to rate Icelandic banks relatively highly just days before they collapsed. |
| Cllr Margaret Eaton, chairwoman of the LGA, said: "No council should rely solely on credit agencies and must use their financial nous. | Cllr Margaret Eaton, chairwoman of the LGA, said: "No council should rely solely on credit agencies and must use their financial nous. |
| "But there must be confidence in credit ratings as councils continue to invest billions of pounds in a whole range of financial institutions." | "But there must be confidence in credit ratings as councils continue to invest billions of pounds in a whole range of financial institutions." |
| Mr Pickles said the government had not updated its guidance for local authorities since 2004. | Mr Pickles said the government had not updated its guidance for local authorities since 2004. |
| "There is a difference between light-touch regulation and neglect," he said. | "There is a difference between light-touch regulation and neglect," he said. |