Authorities fight to unfreeze Icelandic investments

A total of 15 police authorities have money invested in various subsidiaries of Icelandic bank Landisbanki, putting £95.72 million of funding at risk.

Forces impacted by the collapse of the Icelandic banks have said that operational frontline policing will not be affected, but calls are being made for authorities to receive the same financial security as personal savers.

The Metropolitan Police Authority (MPA) has £30 million invested with the banks.

A spokesperson for the MPA said: “Local authorities and police authorities are obliged to invest responsibly and deposit money in a wide range of banks and other financial institutions, after independent advice and within strict guidelines, to make sure that any risk is spread and there is no impact on the taxpayer.

“The MPA is by statute constituted as a local authority and as part of the Local Government Association (LGA) family the Association of Police Authorities (APA) will be urging the Government to guarantee local authorities and police authorities against any potential losses.

“The MPA fully supports the LGA’s call to the Government to extend to local authorities and police authorities the same assurances as given to the public that money invested in accordance with the law, and the Government`s own guidance, will be fully protected.”

Dorset Police Authority and Sussex Police Authority have also been affected, investing £7 million and £6.8 million respectively. Dorset Police Authority has warned there will be budget implications if the money is not recovered but it will not suffer in the short term.

Like other authorities, Dorset is expecting repayments on December 2 this year and has not yet been informed that the bank will default on this.

Treasurer of the authority, Paul Kent, said: “The authority has followed government guidelines and deposited its cash balances with a range of banks to ensure that any risk is minimised.

“We will continue to press the Government to protect our investment and take every possible step to recover this money.”

A spokesman added that it was “too early to know exactly what the financial implications are, it should be noted that the balances invested were earmarked for future capital projects”.

South Wales Police Authority also has £7 million invested, with £3 million in Landsbanki and £4 million in its subsidiary Heritable. Each authority invested with independent guidance that these were secure places of investment and a spokesperson for South Wales added that “by no means is this money lost”.

Humberside Police Authority has an investment of £5.57 million; with £4.57 million in Heritable and £1 million in subsidiary Kaupthing.

In a statement the authority said: “We can confirm that Humberside Police Authority, alongside many public sector organisations, has investments of £5.57 million in the Icelandic banking system.

“The money represents part of the authority’s long-term reserves and we can confirm that there will be no immediate impact on frontline policing activities.”

Hertfordshire has investments of £3 million in the UK arm of the failed banks while Lancashire and Gwent Police Authorities each have £1 million invested.

Assurance is being sought from the Government by Lancashire on three key areas:

•That long-term finance for policing will not be affected due to the recent financial crisis involving Icelandic banks.
•Confirmation that police authority assets invested with Landisbanki Islands bank will receive Government protection following the recent financial crisis.
•A commitment from the Government that police authority assets, which is recognised as tax-payers money, will be protected for the future.

Council Leaders of the Local Government Authority (LGA) have met with Ministers and “appropriate” help has been promised on a “case-by-case basis”.

The department of Communities and Local Government earlier this week announced that task forces would be created to atte