Councils investing in foreign banks

I am obviously totally naive. I assumed that our council tax was going towards improving the areas in which we live, not being invested in offshore accounts. The news today about the number of councils who have invested in Icelandic banks is especially annoying given the repeated increases in council tax which we have had no choice but to pay each year.

Put it this way; in Ceredigion (where I used to live) the council has invested £5.5 million in Icelandic banks. There are approximately 77,800 residents in Ceredigion with over 30,000 households eligible to pay council tax (according to the Ceredigion County Council Website). Lets say for a moment that there are 32,000 households paying council tax in Ceredigion at the moment. That means that for each household in Ceredigion eligible to pay council tax, the council have invested just short of £171.88 each in an Icelandic bank. And on their website they say that “The County Council has, however, spread its investments in accord with best practice and that sum merely represents the exposure within Icelandic banks“. Well excuse me, but how much do they have invested elsewhere? I am aware that the councils must needs have reserves and can’t be running the fund down to zero every month, but in this investment alone they have two months worth of council tax payments squirrelled away, and by implication this is only one in a series of investments.

Cardiff Council have not, apparently, got any money in Icelandic banks, but who is to say where our council tax is being hoarded while we are facing increases in their fiscal demands year on year? I have found an article on the Cardiff County Council website desccribing why our council tax is rising (a lot of our business rates are taken to pay for the rest of Wales; we are the third lowest government funded authority in the country etc etc) but I can’t seem to find anything describing where the ‘surplus’ or ‘excess’ is hoarded, and to what purpose.

Answers on a postcard please, to the usual address.

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2 Responses

  1. Jennie, that is an excellent post.

    It has always amazed me that so much money is paid in council tax and in return we get such dross.

    Well clearly we now know. Of the 1400+ quid I pay each year, £32.49 goes towards local services, the rest goes to Iceland or some other equally far fetched place.

    I can only imagine that when this country does go completly down the plughole, that our local government leaders will at least be able to adminsiter us from afar with the stashed wads of cash.

    Well yes, unless those other countries have already bailed themselves out with our money!

    Thank you for your kind comment, you are most welcome to return whenever you like – I like people who flatter me! But seriously, since our council tax is such a sizeable chunk of our monthly outgoings (and ever increasing) it does annoy me just how little we seem to actually know about where it goes.

  2. Agreed, and thank you for the invite.

    Every year I get a piece of A4 folded in 3 telling me about the council, police, and pensions, and a very small dodgy looking pie chart.

    While my memory is not everything one would hope for, I am convinced there was nothing about icelandic bank accounts or any other type of account.

    I think our elected leaders take the view that if we don’t know where are money goes we won’t be too upset, and no point upsetting us if it can helped. :/

    I actually went and looked up on the council website the leaflet they sent us this year telling us how our money was spent, and it definitely didn’t include anything about foreign investments! I can only agree with you in assuming that they think what the eye don’t see, the mind don’t worry about. Hmmm.

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