Exposure
Well you didn't think council Finance Directors kept the millions they get from the Assembly Government in a bucket under the bed, did you?
They didn't. Some - and we know already of five Welsh councils - were attracted by investment opportunities in Icelandic banks, like Landsbanki's promise of "Creative, positive, sustainable" plans to invest their money and better interest rates than they were offered elsewhere you assume. Now they're wishing they'd put in a bucket under the bed.
How much are we talking about? The exposure, to use the word of the moment, is around £12 million, not a lot perhaps when you hear that some of England's largest councils are sweating over £40million and more.
But hang on. Powys County Council have just been discussing a controversial plan to switch off street lamps which would save them all of a quarter of a million. The extra money they've got coming to them in this spending round is somewhere in the region of £2.5million. The £4million they handed over to Landsbanki and Glitnir amounts to 6% of their investment portfolio and is going to hurt if it doesn't make it back to the schools and old people of Powys.
Gordon Brown's office said yesterday that they weren't getting "much or any information out of the Icelandic authorities". Try again is the advice from the Welsh Local Government Association or better still give us "the necessary cover for public sector investments which have been undertaken in accord with normal practice".
They add that "until very recently these banks were rated as creditworthy by the leading credit rating agencies".
If I lived in Powys, Flintshire, Rhondda Cynon Taf, Monmouthsire and Ceredigion I think I'd like, at the very least, to know just how recently?
I'm Betsan Powys, BBC Wales' political editor. I'll be blogging the inside track on 
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The recovery of "investments"made by the welsh local authorities does not look good if the position as explained by our Chancellor of Exchequor yesterday is maintained. Mr. Darling stated that HMG were going to repay investments made by individuals as they perhaps did not understand the "technical"position of Icelandic Banks operating in UK. The position of LA's was different in that they were controlled by "experts" and that the English LA's mentioned on Channel 4 would be left to whistle. The position of Lib/Dems as explained by Vince Cable was to support the government in its decision. I would imagine that all LA's in the UK operate under the same public sector rules and the welsh ones will be whisltling "dixie". I suppose the WAG could increase grant to those affected LA's,however the budget is not healthy and what about everybody else. The WAG has benefited from "fantastic" increases in public expenditure over past 10 years which was based upon large public "surpluses" in the treasury when TB/GB took over in 1997. The position if you read and listen to experts such as Jeff Randall in Telegraph and on SKY is that the cupboard is completely bare. There aint the money to fund the completely overblown and wasteful public sector in Wales and thats a fact. We live in interesting times.
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The whole issue of Local Authority funding needs looking at in Wales. Its a mess, based on inadequate central government grants and the iniquitous council tax. Remember the council tax revaluation which only took place in Wales, but was scrapped in England because too many people had their bands increased?
That's why we need a real Parliament, not the pretend devolution we have at present. The actual power lies at Westminster. When Cameron is elected then that will become really apparent.
Its true that the general population were unaware of Icesave's regulatory position in the UK. How is it that they were not, if the information was available to the local authorities and others? What else don't we peasants know about? That in itself is a scandal. Those banks should have been put under an obligation to inform all potential investors, private or otherwise, of the nature of the guarantees which would apply in case of failure. The blame for that must lie with Brown and Darling, as well as for the fact that much of the banking crisis here is due to lack of regulation over 10 years.
Its also disturbing that the Treasury is bailing out individual UK depositors in this Icelandic bank to the tune of 100%, when only fifty thousand pounds is guaranteed in other banks. We cannot be sure, should large banks fail here, that there will be enough in the pot to meet the guarantees, even, let alone cover 100% losses. This may be because of the piecemeal approach taken by this dithering and useless government.
Its interesting that Scottish local authorities appear not to be involved according to the published list. Might there be a reason for this?
I don't think the problem with the six local authorities in Wales should be landed on the WAG, its a Treasury problem.
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