13 October 2008
Responding to media speculation this weekend, claiming that hundreds of council workers in Wales will not get paid as a result of councils’ investments in Icelandic banks, Steve Thomas, WLGA Chief Executive said:
“We can assure all council employees across Wales’ 22 local authorities that the global financial crisis and the problems encountered by the banking sector will not have an impact on local government payroll services.”
“The WLGA has been in touch with all 22 local authorities over the weekend and, despite councils’ ongoing concerns over their investments in Icelandic banks, this will have no impact on their individual payroll services.”
“The WLGA held urgent talks last week with the Secretary of State for Wales, Paul Murphy, and Welsh Assembly Government Ministers to ensure that the Welsh dimension of this financial crisis is fully understood by the Treasury. The Association has also been working with the LGA who, in turn are in discussions with both the UK and Icelandic governments in an effort to resolve these problems. The local government associations around the UK have made direct approaches to the Treasury and to the Icelandic Bank Authority to provide the necessary cover for public sector investments.”
“In conclusion, it should be emphasised that all Welsh local authorities comply with CIPFA's Code of Treasury Management in the Public Services. Authorities also consult the leading credit rating agencies on all their investments and, up until very recently, these banks were given a “triple-A” credit rating by the leading credit rating agencies such as Fitch, Moody's and Standard & Poor. Authorities are unable to withdraw their investments from these banks until the time of their maturity and therefore cannot respond to changes on a daily basis.”
For more information contact: Natasha Weeks