As reported on Pits n Pots 2 weeks ago, Stoke-on-Trent a city self sufficient in low carbon energy?, Stoke-on-Trent City Council yesterday announced that they are one of just six authorities nationwide to make it to the second stage of the ‘Creative Councils’ programme, securing £150,000. The funding will help the council create a trail-blazing local authority power company which will help the city become self-sufficient in low carbon energy – a first under the 2011 Localism Act. Continue reading
The 1.6 million local government employees in England, Wales and Northern Ireland are being informed that in order to protect funding to vital frontline services and reduce further job losses, no pay offer will be made to local government employees for 2012/13.
Sarah Messenger, LGA Head of Workforce, said
This has been a very difficult decision to make but it is the right one for council tax payers and the workforce as a whole. A combination of rising costs and shrinking local government funding means councils were left with little choice. Increasing pay would mean more job losses and cuts to the services people need. Continue reading
Stoke-on-Trent City Council announced today it was one of the 80 councils that has received its first repayment from money owed after the collapse of the Icelandic bank, Landsbanki.
The city council received £1.5m of its £5m owed and is expecting more installments in the future. Stoke-on-Trent City Council lost the money in the Icelandic banking crash after an email, sent by the council’s credit agency, which showed a downward review of Landsbanki’s credit rating, was not acted upon by one of the council’s officers.
Sarah Hill, cabinet member for finance, said this morning
This is excellent news for the city council and a well-deserved success for the Local Government Association (LGA) and its partners in the Supreme Court case. The way in which we have co-ordinated the legal action with the LGA, and other local authorities is an example of our effectiveness as a council, we have minimised legal costs and provided excellent value for money for the taxpayer.
This is very welcomed money for the council, £1.5m is a lot of money but it isn’t new money, it is money we were confident we would get back and is already committed for capital expenditure over the next few years.
So unfortunately it doesn’t change the budget proposals before the council later this week. However it is good that after four years we know for certain we will get most of our money back from Landsbanki.
The legal action was, coordinated by the Local Government Association, to secure priority creditor status for UK local authorities following the winding up of Landsbanki and another bank Glitnir. Local authority funds worth £413m were held by Landsbanki when it collapsed in 2008, and the LGA expects some 98% to be eventually recovered.
LGA chair Sir Merrick Cockell, said
This is the result of four years of hard work on behalf of the sector and we are absolutely delighted that we have been able to help more than 80 local authorities.
By Pits’n’Pots Reporter
Seven English councils have been accused of “negligence” for putting
money into Icelandic banks days before they went bust last October.
The authorities paid nearly £33m into the banks just before they collapsed despite warnings about their solvency.
Spending watchdog The Audit Commission, which itself deposited £10m in the banks, said lessons had to be learnt.
Councils have rejected the criticism, one saying that it was a case of “the kettle calling the pot black”.
The fate of the £954m deposited by more than 100 councils including Stoke on Trent City Council and other public bodies in Icelandic banks remains uncertain.
These investments do not have the same protection as individual deposits in Icelandic banks, guaranteed by British ministers after the meltdown of Iceland’s banking system.
Although the overall amount of money at risk accounts for just 3% of councils’ total
cash reserves, 18 authorities have more tied up in Icelandic banks than in their own reserves.
The Audit Commission said most councils had “heeded warnings” about the declining credit worthiness of
Icelandic banks during 2008 and taken action accordingly.
However, it said that some had ignored the risks while a handful had behaved “negligently”.
It reserves particular criticism for institutions which continued to deposit money after 30 September, when the credit ratings of Glitnir and Landsbanki were downgraded to “adequate” – below that deemed acceptable under guidance to town halls. Just over a week later, the two banks went under.
According to the commission, the South Yorkshire Pensions Authority deposited £10m on 2 October while Kent County Council made two deposits totalling £8.3m on 1 and 2 October.
Alleged mistakes by authorities included the failure, by one, to open an e-mail notifying it of the ratings change,
use of obsolete information and exceeding limits for deposits in a single bank.
One of the councils censored – the London Borough of Havering – said that it “absolutely refuted” claims of negligence.
It said it scrupulously followed the ratings guidance and that it made its final deposit in one of the banks 20 minutes before the news it had been downgraded came through.
Given the fact that the Audit Commission itself lost a substanial amount in the Icelandic fiaso and has admitted it did not follow it’s own procedures, is it right for this organisation to dish out criticism?
Pot & kettle has been mentioned, could there be a clearer case?……