Council's £40m fund 'as safe as it can be'
HUNTINGDONSHIRE S £40million reserves are as safe as they can be, senior officers at the district council have assured Council Tax payers. The Hunts Post contacted the local authority following the collapse of Icelandic banks and the impact the failure of
HUNTINGDONSHIRE'S £40million reserves are as safe as they can be, senior officers at the district council have assured Council Tax payers.
The Hunts Post contacted the local authority following the collapse of Icelandic banks and the impact the failure of the banking system was having on some British county and district councils.
The HDC reserves, most of which are what remains of the £80million raised by the sale of the housing stock to what is now the Luminus Group in 2000, generate interest income that helps to fund services and moderate tax increases.
"After the action that has been taken [by the Government], I'm reasonably confident that there will not be a significant collapse," said Terry Parker, HDC's director of commerce and technology.
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"We have spread our money as best we can, but we are in the hands of the banking system."
The money is invested across 11 banks and building societies in the UK and Republic of Ireland, mostly on fairly short-term cash-based deposit with interest rates currently between a little over five per cent and 6.77625 per cent. "When you have £2million at that rate, even the 0.00025 per cent is worth having," Mr Parker added.
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"They are with what one hopes are reputable banks and building societies. We don't have a concentration with any one bank or with anybody who has got into trouble."
Until last year, HDC's reserves were managed by three City brokers which all delivered returns above the sector average. The number of dealers was gradually reduced to one but, when the council realised its own officers were delivering even better returns on the part of the reserves they were handling directly, it took management of the entire portfolio back in-house.
Like HDC, Cambridgeshire County Council has no exposure in the Icelandic banking system, a spokesman confirmed.
Huntingdon's Town Clerk, Karen Cameron, said the council's reserves were held in its bank account with Barclays. St Ives's clerk, Alison Melnyczuk, said Lloyds TSB had her council's reserves.