Thursday, 9 October 2008

Is that why smart mums – and councils - shop at Iceland?

Forgive the blatant ‘steal’ of the recent Iceland frozen food company’s TV ad tag-line, but I just couldn’t help myself….

You can’t have failed to notice that there’s a bit of panic out there in the financial world (and there’s a fair bit of consternation here at ‘Cobblers Towers’ too), but the most recent twist has brought an altogether different meaning to the old phrase ‘frozen assets’….

More than £40m of taxpayers money has been invested in collapsed Icelandic banks by North-East local authorities. (Taxpayers: that’s your money – and mine)

Council chiefs were today seeking urgent guarantees from the Government after finance officers revealed the deposits this morning.

Four authorities in the region - Redcar and Cleveland, Derwentside, Gateshead and Northumberland – are at risk of losing their money.

Derwenstide District Council has £7m invested in three Icelandic banks - Landsbanki, Kaupthing Singer and Friedlander and Glitnir Bank.

Council leader Coun Alex Watson said: "We think we will get the £7m back, but we might still lose £350,000 in interest.”

“It won’t affect council tax or services – we’ve still got a revenue balance of £4m - and its not going to cripple us, but we appreciate it's a lot of money."

I’m sorry to be such a miserable and pernickety old git, Alex, but your words above (as quoted in the local media so they’re bound to be accurate) don’t exactly fill me with confidence.

We THINK we will get the £7m back? How can you be sure? Is this ‘pint half-full’ philosophy you’re giving us here derived from some sage at the Treasury? Or is it a question of fingers crossed and let’s hope it doesn’t all go pear-shaped?

And as for ‘we appreciate it’s a lot of money’ – top marks for that revelation. Of course it’s a lot of money!

As far as this crotchety old scribe understands the situation, it is this:

So far, HM Treasury has declined to say that it will guarantee councils’ investments in Icelandic banks (unlike the guarantee given to individuals). The councils are desperately trying to pin down Alistair, darling – sorry that should be Alistair Darling – in the hope he might come to their rescue.

Financial experts (mind you, can we really trust these so-called ‘experts’ anyway?) think that, for smaller councils with limited budgets there could be a pretty severe impact on front-line services.

It will be interesting to see exactly what effect this latest development has on the services Derwentside District Council provides to its’ citizens

Still, not to worry: Alex Watson seems to be doing a good impression Dads Army’s Cpl Jones: “Don’t panic, Mr Mainwaring, don’t panic!”

Hope you’re right Mr Watson – I really DO hope you’re right!

(And finally….returning to my Iceland TV ad theme: If I remember rightly, Kerry Katona, who fronted those ads recently went bust. Exposure to Iceland didn’t do her much good either it would seem!)

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