Why we put cash in bank’
LEADERS of Uttlesford District Council have written an open letter about the council s current financial situation. In it they say: Following the collapse of the Icelandic Banks the leaders of all groups on Uttlesford District Council thought it would be
LEADERS of Uttlesford District Council have written an open letter about the council's current financial situation.
In it they say: "Following the collapse of the Icelandic Banks the leaders of all groups on Uttlesford District Council thought it would be useful to give the reasons that local authorities have invested in the money market and that they did so in accordance with Government guidelines to maximise returns.
"Throughout the year the council has available monies to invest. These funds include advance receipts from council tax, business rates and other funds. Uttlesford collects the council tax on behalf of the county council, fire and police authorities; and business rates which are subsequently passed to Government. The council currently has an investment portfolio of £14.6 million.
"The council's Treasury Management Strategy complies with regulations issued under the Local Government Act 2003, and obtains advice from a segregated and independently managed consultancy company specialising in treasury advice to the public sector.
"The investment of £2.2 million with Landsbanki was originally placed in October 2006 for a 364 day period and renewed for a similar period in October 2007. At the time all of the investments were placed, the advice from the brokers and the credit ratings of the banks indicated that they were appropriate institutions in which to invest.
"The council has consistently sought to ensure it has invested in a diverse range of institutions to spread risk and minimise, as far as possible, the impact of problems in the financial markets. As at October 13 2008, with the exception of the £2.2 million in Landsbanki, all other investments are with British Isles institutions and those investments with building societies are all fixed term deposits.
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"At present, in addition to the investment of £2.2 million the council is awaiting news on the £135k of interest the investment is due on October 15 2008 when the capital was to be repaid.
"It is important to note that the sums of money on deposit are not reserves but are the council's working capital, balances and sums which are to be paid over in due course to other local authorities or the Government.
"Uttlesford District Council is being supported by the Local Government Association which is in talks with both the British and Icelandic Governments with the intention of achieving a positive and quick outcome to this matter."
The letter is signed by Cllr Jim Ketteridge, Leader of the Conservative Group and Leader of the Council, Cllr Peter Wilcock, Leader of the Liberal Democrat Group and Cllr Elizabeth Godwin, Leader of the Independent Group.