Council avoids bank crisis hit

Telford & Wrekin Council has avoided a £6 million hole in its finances after withdrawing money from one of the Icelandic banks swept up in the fallout from the credit crunch, it emerged today.

It comes as Prime Minister Gordon Brown announced yesterday a £50 billion rescue package for British banks.

Mr Brown declared war on city fat cats saying the days of “big bonuses” for banking bosses were over as London’s leading share exchange held steady following the announcement of the bailout.

“One of the conditions of us helping the banks is that we will have to reach an agreement about their executive remuneration,” he said.

Today a string of local councils were waiting to hear if their money was safe after deposits in Landsbanki and other Icelandic banks were put at risk following a banking collapse there.

But Telford & Wrekin Council was not a victim after its finance bosses moved the money elsewhere a number of weeks ago.


Attracted by a high interest rate and strong credit rating, the council had invested the money on a short-term basis but withdrew it before Landsbanki became the latest victim of the economic slump.

Council leader Andrew Eade said today: “Telford & Wrekin Council had £6 million with this Icelandic bank – equivalent to around four per cent of the cashable investment that the council makes and has to pay for its day-to-day operation and the 700 services we provide.

“Rather than simply leaving this money in a bank earning little or no interest, the council has actively managed this cashable investment money to provide extra income for the council.”

Smart thinking by the council.But by removing the cash from the Icelandic bank the council has confirmed the long term fact that condiderable amounts of money is stashed overseas. For years the New Labour bunch denied this. Keith Austin vigorously rebutted my evidence on this in a radio debate.

Naturally Shropshire radio accepted what he said. The Tories have trumpeted their ,or their officers acumen in acting swiftly to avoid disaster.If this had not been necessary they would probably be denying the cash existed. So out of darkness cometh light

Yep it's suprising how many rats and unknown things start to show their heads when a ship starts to sink....