Written by Loretta Vendetta Thursday, 11 June 2009 13:08
Westminster City Council which invested millions with Icelandic banks just before they collapsed has come under fire from MPs along with many other councils.
A report from the Commons' communities and local government select committee says there were several warning signs about the shaky state of the banks, which went under last autumn with nearly £1 billion of funds from scores of British authorities.
Complacency, lack of expertise and inaction contributed to putting taxpayers' money at risk, it is claimed.
The report says that some of the warning signs emerged as far back as 2006. Some councils acted on them and withdrew their money but others did not.
Kent County Council was left facing the biggest shortfall, with £50 million invested with three Icelandic institutions.
It expects to receive 90 per cent back. Havering had £40 million invested and Westminster City Council had £17 million.
The committee will report: "This inquiry has exposed a degree of misunderstanding, misinformation, and complacency on the part of some crucial players, both within local authorities and in the wider financial sector."
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