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Taxpayers avoid the Iceland banking crash
Money belonging to council tax payers was moved from an Icelandic bank 18 months ago because a local authority realised their cash may not be safe.
Prudent financial officers at East Northamptonshire Council put cash into an Icelandic bank two-and-a-half years ago because they were attracted by the high rate of interest they could earn.
However, they became worried about the security of the bank and pulled out when they realised the risk of losing taxpayers' cash was too high.
Council leader Andy Mercer said: "We had money in the Icelandic banks and got high interest for a long period of time.
"However, we did prepare a risk management assessment of what was going on.
"That means we didn't lose any money and we now have considerable revenue in reserves."
The move helped the council build reserves to help it fund council services in the future.
Earlier this week it was able to keep its commitment to fund free bus services for over-60s even though there was a 73,000 shortfall in Government funding.
Had the council not had the reserves, the local authority might have had to consider other, more drastic, options such as cutting services or raising the cost of services to foot the bill.
Other councils in the north of the county have reassured taxpayers that none of their money was in Icelandic banks.
The only local authority in the county to have money in an Icelandic bank was Daventry Council, which lost 8m of funds invested.
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Weather for Kettering
Sunday 27 May 2012
Today
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Temperature: 10 C to 25 C
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