Review by £50m bank crash council

Cabinet member for finance, Nick Chard, was questioned at County Hall

A local authority which invested £50m in failed Icelandic banks has said a full review of its investments around the world is under way.

Kent County Council (KCC) invested more than any other local authority in England, Scotland and Wales in Iceland.

Nick Chard, cabinet member for finance, was questioned on Wednesday by the cabinet scrutiny committee.

But the council's treasury management adviser, Butlers, decided not to accept an invitation to answer questions.

Members seeking reassurance on the state of the county's finances were told PricewaterhouseCoopers (PWC) had been commissioned to produce a report.

"We have asked PWC to look at the treasury management make sure procedures have been adhered to," Mr Chard told BBC Radio Kent.

"I think, quite reasonably, Butlers wanted to wait until that report was published to take part in a debate."

'Very secure'

KCC has £15m tied up with Glitnir Bank, £17m with Landsbanki and just over £18m in Heritable.

Mr Chard said taxpayers' money was now being invested in the government's Debt Management Office.

"The advantage of that is it's very secure. The disadvantage is that it attracts a much lower interest rate than we would ordinarily get from other deposits," he said.

The potential loss in interest over a year was £6m, he said.

"But we have some very good news from Heritable Bank, which is a UK-domiciled bank," said Mr Chard.

"The receivers, Ernst and Young, have said that their assets and liabilities are broadly the same, which is a very good indication we will get all of that money back."

Lynda McMullan, director of finance, told the committee: "We are reviewing where the remaining money is placed and have looked at what guarantees are in place to support those investments."