“A DAMNING report published today says local authorities like Nottingham City Council should have spotted warning signs that Icelandic banks would collapse.
The study by the Audit Commission reports that good council treasury managers saw the risks and took action to decrease deposits.
It goes on to say that other councils missed or underestimated the warnings and – like Nottingham – continued to deposit large sums of cash in the doomed Icelandic institutions.
The city had the second largest amount of cash out of any local authority deposited in Icelandic banks. Its investments – equivalent to 84% of its reserves – amounted to some £41.6m…
Today the Commission’s report details how concerns were first raised about Iceland as early as 2006 and were continually noted through 2007…
The Audit Commission highlighted weaknesses in treasury management policy in affected councils – though not specifically naming Nottingham – claiming they did not lay out how much risk should be taken.
The organisation also highlighted the varying level of qualifications held by officers managing investments – suggesting that booming investment figures were not mirrored by increasing management skills.
Local authorities which had the largest sums at risk tended to have weak governance and scrutiny arrangements, said the report’s authors.”
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