THE head of Hillingdon Council has attempted to stem the tide of criticism following the feared loss of £20 million of tax payers money due to the collapse of the Icelandic banking system.
Council Leader Councillor Ray Puddifoot has issued the following statement as a way of reasurring residents that both the council's finances and service provision are secure.
He said: "As there has been so much media coverage about the financial situation affecting councils, I would like to reassure residents about the position in relation to Hillingdon.
"The council is financially sound and with an annual cashflow of more than £1 billion, the investment in question will not affect our ability to continue to deliver high quality services to our residents.
"Some residents will ask why we invest money in banks at all. All councils invest money to help reduce the level of council tax and to maximise the amount of money we have to deliver services.
"We follow very strict government guidelines and all of the banks we invest in have the highest credit rating. However, in these highly unusual times, these ratings are changing on a daily basis.
"Hillingdon invested £5 million with an Icelandic bank and £15 million in a bank, which is a UK subsidiary of an Icelandic bank. The issue of bank ownership is now a global issue and investors with Abbey National for example, are investing in a subsidiary of a Spanish bank.
"As with people who have invested in banks such as Northern Rock and Bradford and Bingley, this is no reflection on the judgement and skills of those who are investing - it simply shows the serious and rapidly changing position that currently exists across the world.
"More than 100 councils, 30 police forces, Transport for London and a range of charities have all been affected by this particular aspect of the current global financial position and we are expecting the government to support councils and other organisations as they are doing for banks and other financial institutions.
"The financial management and strength of Hillingdon Council means we are well able to deal with this type of unforeseen event."