CHESHIRE County Council has unanimouslyŠagreed a temporaryŠchange to its investment policy to help cope with the financialŠturmoil in the world money markets.
The authority, which has £8.5m deposited with Heritable - a UK subsidiary ofŠLandbanski -ŠhasŠcarried out a full review of treasury management and investment strategies.
Members expressed full confidence in finance officers who invested the cash with Heritable at least a week before its credit ratings began to fall on September 30.
Said council Leader Paul Findlow: “The Local Government Association has confirmed that councils that investedŠbefore September 30 in accordance with DCLG guidelines acted prudently. There can be no criticism of that decision.
“We were, of course, not alone and the long list of investors has been well publicised. Indeed we believe that the Audit Commission – the body responsible for scrutinising public expenditure - hadŠ£5m with Heritable and £5m with Landbanski!”
Added Councillor Findlow: “There appears to be hopeful signs that we will get at least some of our money back. Our council taxpayers can rest assured that we will be monitoring events very closely indeed.”
In a report before membersŠCounty Finance Officer Bill Tunnicliffe stresses that the authority’s approach has always been to prioritise security over rate of return.
But current increasingly difficult conditions called for amendments enabling money to be placed with finance institution supported by the UK and Irish Governments.
These included six Irish Banks covered by Dail Eireann, and UK banks and Building Societies that have secured capital investment from Whitehall like HBOS, RBSŠand Lloyds TSB.
It will alsoŠmean more frequent use of the highly credit rated money market funds and the UK GovernmentŠ Debt Management Account Deposit Facility – considered to be “of the highest quality and extremely secure”.