16 October 2008
Wyre Forest District Council in Worcestershire, Uttlesford District Council in Essex and Tamworth Borough Council in Staffordshire have been revealed as the three councils to receive emergency financial help from the government in the wake of the Icelandic banking crisis.
Ministers have admitted that 13 councils are experiencing short-term difficulties with three deemed in need of urgent help from the Treasury and Department for Communities and Local Government officials.
Wyre Forest has a total of £9m invested with three Icelandic banks – Landsbanki, Heritable, Kaupthing, Singer and Friedlander –which is due to mature on October 30.
John Campion, leader of Wyre Forest, said: 'In response to the letter sent to the prime minister last week, we understand that Wyre Forest will be one of the first councils to receive advice if required. The council is always receptive to any advice which will help in recovering the £9m investment in the banks affected.'
He added that there was no immediate threat to services, which will continue to be maintained through current budget provision.
Uttlesford has £2.2m invested in Landsbanki, the only deposit it holds outside the British Isles. It says there is no immediate risk to frontline services.
A spokesman said no help had been requested from central government but officials were due to arrive at the council on October 17.
'We look forward to working with them. Any help we can get will be welcome,' he said.
Tamworth, however, said it had no immediate financial problems and was 'at a loss' as to why it had been singled out for such support. It has £7.5m invested in three of the Icelandic institutions regulated by the Financial Services Authority.
'As the council has said publicly on more than one occasion, there are sufficient resources to cover the council's financial commitments and it will continue to deliver services as normal. It is hoped, however, that this joint initiative will have a positive impact on our future budget deliberations,' a spokesman said.
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