Saturday, 9 May 2009


Liberal Democrat members of Redcar & Cleveland Council's Audit Committee are concerned that the Labour Council is failing to address the serious issues raised by their investment of £4 millions in Icelandic banks last October. Public money was deposited in an Iceland bank ignoring warnings about its poor financial standing.

The Council's claimed investigation was far from independent. It was merely a report from a finance officer to the Audit Committee. Until a more independent enquiry takes place, the only judgment that can be seen as impartial is that of the Audit Commission.

It was only Labour members of the Council's Audit Committee who voted to dispute Government inspectors' judgment of negligence on the Council's £4 million investment.

Councillor Glyn Nightingale said: "The Labour Council has a duty to take care of the public's money. This was breached when they ignored clear warnings about Icelandic banks. The writing was on the wall months earlier. In May 2008 the outlook of Icelandic banks was rated as "negative". Labour has damaged the Council's financial position with the potential loss of £4 million of public money and the actual loss of interest earnings.

If Labour believe this is not negligence, what is it? It is far from prudent. Local people would be right not to trust Labour with their money. They will pay for Labour's mistakes and mismanagement."

Councillor Mary Ovens said: "For the sake of losing interest they rushed to plough a massive amount of money into a bank which they should have known was on the brink. Common sense should have told them not to go ahead in what Council officers admit were 'turbulent' times."

Lib Dem Prospective Parliamentary Candidate Ian Swales said: "We can hardly be surprised that Labour Councillors have decided that they were not negligent in their handling of Icelandic bank deposits. This latest judgement by them means little and until a full independent enquiry takes place the Audit Commission judgement of "negligent" must be the most accurate assessment."

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