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Local Government: Bank Services

Volume 492: debated on Tuesday 12 May 2009

To ask the Secretary of State for Communities and Local Government what plans she has to amend her Department's (a) investment advice to local authorities and (b) procedures for transmitting warnings about the risk profile of investments identified by the Financial Services Authority to local authorities in light of the Icelandic banking collapse. (273214)

Under the Local Government Act 2003, local authorities are responsible for their own investment decisions. My officials are working with the Audit Commission, CIPFA and the local authority associations to assess how the Department's investment guidance might be refined in light of the report of the Audit Commission on local authorities and Icelandic banks, and the forthcoming report from the CLG Select Committee. The Department's guidance on local government investments is available at:

http://www.local.communities.gov.uk/finance/capital/data/lginvest2.pdf

The Financial Services Authority have, for good reasons, a policy of not commenting publicly on individual institutions.