UNISON has written to all local councils demanding to know what steps they are taking to recover cash invested in Iceland banks and how they are going to deal with the potential fall-out from the failure of those banks.
Asked what the unions will do if some councils say they don’t have the money to pay wages this week, a UNISON spokeswoman told News Line: ‘We will be asking the government to help and fund payrolls.
‘We can’t have low paid workers going without when big City banks are being bailed out.’
The spokeswoman said the union had not put out a national press statement but had briefed local areas.
In a UNISON south east England statement, regional secretary Phil Wood said: ‘We want to know how much money is invested, what the money was earmarked for, what’s the likely impact and what the council is doing to get the money back.
‘It’s clear that millions of pounds of council taxpayers’ money from across this region are at risk.
‘And that is bound to lead to severe consequences, unless the money is recovered quickly.
‘We want to discuss with councils the impact on services and jobs.’
UNISON has asked councils the following questions:
‘1. Does the council have any monies or investments placed with financial institutions in Iceland whose assets have been seized; that are in default or are otherwise “at risk” as a result of recent events?
‘2. If so, what sums are involved and what was the source (e.g. revenue reserves; capital reserves, collection fund surpluses; monies due to be invested by the LGPS (local government pension scheme); other short, medium or long term investments, and nature of the investment (e.g. overnight; 3 months; 1 year)?
‘3. Does the council have any monies placed with financial institutions elsewhere whose assets have been seized; that are in default or are otherwise now “at risk”: as a result of recent events?
‘4. If so, what sums are involved and what was the source (e.g. revenue reserves; capital reserves; collection fund surpluses; monies due to be invested by the LGPS; other short, medium or long term investments)?
‘5. What steps are the council taking to recover those monies/investments?
‘6. What are the implications for: (a) operational budgets? (b) services? (c) future payroll obligations? (d) the council’s overall financial position?
‘7. What steps are being taken to review the council’s Treasury Management policies to ensure that further potential risks are removed?’
Council bosses’ organisation, the Local Government Association (LGA), has been seeking a meeting with the Iceland ambassador to the UK.
An LGA spokesman told News Line yesterday: ‘We’re still waiting for them to come back to us. If they do not, we will be delivering a letter.’