The investigation by the Communities and Local Government Committee follows revelations that more than 100 councils had cash in the banks when they collapsed earlier this month.
The Committee has asked organisations affected to explain why they made the deposits…MPs will look at whether central Government should guarantee local authority assets.
Nottingham officials have argued they were not given adequate warnings by financial advisers or credit-rating agencies. Andrew George MP, a member of the committee, said: “We want to look at what advice councils were given and in particular what the Government was telling them.
There seems to be some contradiction in what different bodies were hearing, which led some to remove money and others not to – we want to get to the bottom of that.”
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