Welsh Assembly forced to clarify Iceland risk

15 Oct 2008

The Assembly Government in Wales has been forced to clarify how much public money is at risk following the Icelandic banking collapse after it got the figures wrong.

Finance minister Andrew Davies said the Welsh public sector had about £74 million exposed in the crisis, mainly due to deposits by eight local councils.

But officials later had to correct his statement after it was pointed out that nine councils had said they were involved, with about £60 million invested.

Added to that, three police authorities have invested a combined £10 million and three universities put in £8.1 million collectively, bringing the tally to £78 million.

Mr Davies said Welsh ministers are working closely with the UK Government to release money stuck in frozen accounts, adding that compensation from his department is "not an option".

Welsh NHS bodies and further education colleges were not involved and "few" voluntary sector bodies are likely to be affected, he said.

Most voluntary bodies would be covered by the Financial Services Compensation Scheme, which guarantees £50,000 in bank accounts, Mr Davies said.

He said: "I would expect a prudently managed organisation to be able to navigate its way through the current difficulty - as indeed very much looks to be the case."

<http://new.wales.gov.uk/splash> (Welsh Assembly)