Dorset Police Authority has expressed
its support for the Local Government Association’s (LGA) call for
the Chancellor to protect local authority deposits in Icelandic
banks.
The Police Authority currently has deposits, in the form of
temporary loans to Landsbanki and Heritable, a subsidiary bank,
totalling £7 million.
These loans were made at a time when the two
banks had a high credit rating.
As the sums involved are due for repayment
over the next three months, their freezing by the Icelandic
authorities will not cause the authority any significant cash flow
problems in the short term.
However, there would be budget implications if
this money is not recovered.
Although it is too early to know exactly what
the financial implications are, it should be noted that the
balances invested were earmarked for future capital projects.
As such, there will be no immediate impact on
our delivery of operational policing.
The Treasurer of the Police 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.”
The Police Authority’s cash balances, which
are managed by Dorset County Council, in total, comprise
£24.1million.
The balances are only deposited with banks
with high credit ratings, and at the time these fixed term deposits
were made Landsbanki and Heritable met these strict criteria.
The Authority supports the attempts by the
LGA to urge
the Government to ensure a speedy resolution to this issue.