It seems that at least eight London Councils have - or had - investments in Icelandic banks. According to the Telegraph those "exposed" include Havering (£12.5 million), Sutton (£5.5 million), Brent (£15 million), Barnet (£27 million) and Westminster (£17 million). The Local Government Association is asking the Treasury to cover authorities' losses in the same way as it has the deposits of individuals. After all, the government encouraged them to stick their surpluses into high-yield locations.
With the prospect of cuts and council tax hikes looming, the political battles have already begun. "There must be total transparency in the Council's financial situation," demands Westminster's Labour Group leader Paul Dimoldenberg, "so that important decisions can be made on future spending. In these difficult times it is vital that services to the young, elderly and vulnerable are given priority. Cosmestic schemes to spruce up Bond Street and Oxford Street must take second place to front line services."
Oooh, vicious! And it can only get uglier.
