Public could lose £16m in Iceland

Public bodies in West Yorkshire have invested £16m of taxpayers' money in failed Icelandic banks, it has emerged.

Wakefield Council said it had deposited £9m in Icelandic banks "when their credit ratings were highly ranked and there was no suggestion of any risk".

Kirklees Council said it had invested £1m in Landsbanki, but expected the money to be repaid in January 2009.

The West Yorkshire Police Authority said it had invested £6m in Iceland and was "assessing the impact on services".

Wakefield council's chief executive Joanne Roney said the authority was working with Wakefield's MPs "to resolve the situation".

She said: "These are exceptional times for the financial sector world-wide and we are currently assessing the impact on services of the recent developments with Icelandic banks.

"These are exceptional times for the financial sector worldwide and we are currently assessing the impact on services of the recent developments with Icelandic banks"
West Yorkshire Police Authority statement

"Wakefield Council has £9m with Icelandic banks which was invested at a time when their credit ratings were highly ranked and there was no suggestion of any risk.

"It is normal practice for the public sector to hold deposits in overseas banks. We are working with the district's MPs to resolve the situation."

Kirklees councillor Andrew Palfreeman, cabinet member for finance, said: "The Icelandic government has said the bank will run as normal, so we expect the investment to be repaid and will be working to secure that."

Local authority leaders are seeking an urgent meeting with the chancellor and asking the UK Government for the protection it has promised to personal savers.

A West Yorkshire Police spokesman said: "We can confirm that West Yorkshire Police Authority has £6m invested in Iceland.

"We have taken care, in accordance with national guidelines, to spread the risk of any investments in accordance with the authority's approved investment strategy which places security above return.

"These are exceptional times for the financial sector worldwide and we are currently assessing the impact on services of the recent developments with Icelandic banks.

"It is not anticipated that this will have an impact on day-to-day policing"

Only last month, the authority, which has an annual budget of £411m, was given the highest rating by external auditors for its financial management.

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