Kent County Council investment woes will hit services

Kent County Council has investments of over £50 million in three Icelandic financial institutions. The Government is suggesting it will not compensate local councils for any losses incurred as a result of such investments (1).

Stuart Jeffery, Kent’s Green Party’s Campaigns Officer, comments:

“Kent County Council should have been more careful. The £50 million in investments in three Icelandic financial institutions is the largest exposure of all the UK local councils and other public bodies which invested in Iceland’s collapsing banks. Unfortunately, Kent council tax payers may now have to suffer for the County Council’s mistakes, since the Government may not be willing to cover all of the shortfall. Bearing in mind, Conservative pledges not to increase council taxes, taxpayers are likely to suffer through severe cuts to services. Kent’s people may lose out even further as the financial crisis continues to impact upon spending and employment. To move quickly away from recession, we need a ‘Green New Deal.’(2) This would require:

• Massive investment in renewable energy and wider environmental transformation in the UK, leading to,
• The creation of thousands of new ‘green collar’ jobs
• Reining in reckless aspects of the finance sector but making low-cost capital available to fund the UK’s green economic shift
• Building a new alliance between environmentalists, industry, agriculture, and unions to put the interests of the real economy ahead of those of footloose finance.

“Kent County Council needs to clean up its investments in general. It is still investing in tobacco and arms sales. A sustainable investment programme based on the Green New Deal ideas must include a commitment to ethical investment for the long-term.”

Ends

Notes:

1. KCC, according to the Guardian, have investments in three Icelandic financial institutions of £50 million in total making them the most exposed of only 20 local councils to have Iceland-based funds.
See also Times: http://www.timesonline.co.uk/tol/news/politics/article4910126.ece
which notes: Kent County Council said that it had £50 million deposited in Icelandic banks £15 million with Glitnir Bank, £17 million with Landsbanki and just over £18 million in its British subsidiary, Heritable.
ditto the Telegraph: http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3162204/Financial-crisis-Turmoil-in-Iceland-puts-councils-funds-at-risk.html
2. Caroline Lucas MEP participated in the team which created the Green New Deal report, available at the New Economics Foundation website: http://www.neweconomics.org/gen/