Powys' £4 million Icelandic Investment under threat

12.00.00am GMT Thu 9th Oct 2008

Following the news that Powys County Council has £4 million cash invested with Landsbanki and Glitnir - two of Iceland's collapsing banks - Kirsty Williams AM and Roger Williams MP are seeking an urgent meeting with Powys County Council.

The sum makes up approximately 6% of Powys' cash investments. Due to the attractive interest rates offered on savings accounts in the Icelandic Banks Powys County Council is one of 5 local authorities in Wales to have made such investments.

Kirsty Williams, AM for Brecon and Radnorshire commented:" This is clearly very worrying news. We still do not know what the ramifications will be and whilst it may only be a comparatively small part of the council's overall budget I am concerned that it must not mean the threat of cuts to frontline services or the raising of council tax.

"Alistair Darling has not yet made it clear whether Local Authorities' money will be guaranteed in the same way that individual savers have been protected. This is tax payers' money and is essential for the running of local services.

"We are seeking an urgent meeting with Powys' Head of Finance to discuss the options and the best way forward to ensure funds are protected.

Roger Williams MP for Brecon and Radnorshire said: "I believe that the local authority has acted in accordance with the Treasury guidelines on this issue by spreading their deposits into a number of financial institutions.

"I have written to the Chancellor of the Exchequer, Alistair Darling, about this matter to ask the government to provide assistance. If the Government do not support local authorities affected by this it will have a serious effect on the level of council tax or will mean a serious cut in the level of local services."