Help for Bristol after Icelandic cash fiasco

             

Bristol residents will be protected by the Government from their own council to stop them making potential service cuts and council tax increases.

 

This action is as result from disastrous local authority investments in Icelandic Banks.

 

Local authorities will have to postpone any possible budgetary impact that would hit council tax and services until 2010 to 2011.

 

New statistics published today show that at the end of 2008, 125 local authorities in England had outstanding investments of more than £900 million in Icelandic banks. Bristol, and many councils across the South West were included in this figure.

 

Local Government minister John Healey said: “Following the failure of Icelandic banks last year the Government – with the Local Government Association – acted immediately to ensure no local authority faced serious short term difficulty as a result. We continue to work closely with the banks and Icelandic authorities to help local authorities and other creditors recover their money.

 

“This money isn’t lost but it is at risk so under normal financial rules this risk would need to be taken into account in their budgets. I was concerned about the possible, and potentially unnecessary, effect this could have on services and council tax. That’s why I am taking this exceptional step that gives authorities some breathing space that should allow them to be clearer what sums, if any, are still at risk. Meanwhile the Government will continue its efforts to ensure that investors recover as much as possible from the banks.”