Haringey Council and Icelandic bank account

So – the world saviour is enjoying his moment in the sun. Lord knows it’s been a pretty frozen existence for the rest of Gordon Brown’s first year or so. However, the recriminations over the financial meltdowns have kicked off big time and it was him stirring the financial pot and writing the recipes over the last ten years.

Here in sunny Haringey we feel a cold wind blowing in from Iceland – and up until now have been relatively restrained in blaming Labour for what has happened with £37 million of local reserves caught in the Icelandic net of bankruptcy. However, at last night’s full council it was revealed that Haringey Council was moving money into Icleandic accounts as late as the 29th September – way way after the warnings were there. Why on earth were the Labour councillors in charge not screaming at the finance officers to move the money once the ratings had dropped?

Quite rightly, Robert Gorrie (leader of the Liberal Democrat opposition on Haringey Council) has called for an independent investigation.

This is what he said: “What is clear is that Haringey Council has been caught up in a financial storm that has uncovered real failings in the Council’s economic leadership. Haringey Council was typically slow to reassure residents and are still drip feeding the bare minimum of information out to the public. Repeated suggestions that losing £37 million will not impact future spending plans are simply ludicrous. This loss is almost 10 per cent of Haringey Council’s annual expenditure on services or more than 30 per cent of the Council’s own annual capital expenditure. Something will not get done as a result of this loss and the Council need to be honest with residents where and when that cut will fall.

“We must now have a full and independent investigation to get to the bottom of the decisions made to invest in these banks so the responsible parties can be properly held to account. Every pound needs to be accounted for and all residents’ worries need to be put to rest.”

Too bloody right!

0 thoughts on “Haringey Council and Icelandic bank account

  1. Amazing how the Labour council managed to keep this out of the news for so long – might this have something to do with last week’s Alexandra ward election? When the times published it’s list of councils which had invested in icesave ours was conspicuously absent. I was quite relieved to think that we’d only have the normal kind of tax increase this year. Oh well!By the way, congratulations on one addition to the LibDem team in Harringey. I’m glad to see that Alexandra was won by a very significant margin.

  2. Lynne, best not to get too uptight about this as your own Sutton Council was doing exactly the same thing. Let’ s just accept councils of all parties got it wrong, shall we?!

  3. Iain – I totally agree that councils of all parties are in this situation. However, with each council having different processes and rules in terms of their investments – it must be right in each individual council for the opposition (and one would hope the administration too) to ask serious questions relating to the investment in Icelandic banks. In fact it would be wrong to just put heads down just because all parties are involved. It wasn’t treasury guidelines as has been suggested – and calling for an investigation has to be right when Haringey invested as recently as 29th September – long after ratings had been downgraded. It may also be the case that Haringey’s rules allow investment in say an ‘A’ rated bank – which would and should, in my view, then beget the question as to how such a poor rating was acceptable. It may be that was simply the advice from the advisers – in which case – sack them! And then you would have to look at the instructions given to the advisers and see if Haringey’s instructions to them was sound. If that were the case, and this is only one tiny example of why investigation and questioning is necessary, it would be important to agitate for that rule to be tightened. So – whilst it’s true all parties are involved – some will have acted appropriately and some will not. It’s important to find out which in each case.

  4. With the possibility that a Council’s instructions to advisers was wrong, we come to the general problem of consultants having a professional code of conduct and a duty of care – if the instructions were wrong and the Council would not correct them when asked to, the advisers should not have taken the contract. If the financial advisers failed to warn the Council on the basis of all of the evidence (which evidence was warning about Iceland banks a long time ago), then not only sack them but also sue them for any financial loss to the Council. I have for some years been accumulating evidence of bad advice from quite large consultancies advising central govt in all of the UK, and have recently been pleased that the Information Commissioner intervened in one case to overturn the bad advice – but that govt dept has not sacked those advisers.

  5. And Sutton came clean straight away as did ‘most everybody else. Haringey were unique in thinking they could keep this quiet.

  6. The key is in the pension fund investments over 8 years and failed PFI/regeneration initiatives.They used the bank to ‘disappear’ money that was already gone!