Agenda and minutes

Apologies for absence were submitted on behalf of Councillors Nora Ball, Alan Cain, Anthony Gee, Keith Iddon, June Molyneaux, Joyce Snape and Ralph Snape.

Members are reminded of their responsibility to declare any personal interest in respect of matters contained in this agenda. If the interest arises only as result of your membership of another public body or one to which you have been appointed by the Council then you only need to declare it if you intend to speak.

If the personal interest is a prejudicial interest, you must withdraw from the meeting. Normally you should leave the room before the business starts to be discussed. You do, however, have the same right to speak as a member of the public and may remain in the room to enable you to exercise that right and then leave immediately. In either case you must not seek to improperly influence a decision on the matter.

There were no declarations of interest in the items on the agenda, by any of the Members present.

The Mayor proposed that standing orders be suspended for the duration of the meeting to allow Members to speak without a limit on timing.

RESOLVED  -           That Standing Orders be waived to allow for the main speaker from the Labour and Conservative Groups to speak for an unlimited period, but otherwise the rules of debate remain as for as an ordinary Council meeting.

“In line with the provision within Standing Orders we the undersigned call for an emergency meeting of the full Council in order to discuss the Council’s financial position and investments”

Councillor Peter Wilson

Councillor June Molyneaux

Councillor Laura Lennox

Councillor Anthony Gee

Councillor Marion Lowe

The Mayor announced that this Extraordinary Meeting of the Council had been requested by five Members of the Labour Group (Councillors P Wilson, J Molyneaux, A Gee, L Lennox and M Lowe) who had “called for an emergency meeting of the full Council in order to discuss the Council’s financial position and investments”.

The Executive Member (Resources) provided a statement on the current situation, reporting that the Chief Executive had notified Members by e-mail once the Council’s position was known.  He then outlined the facts in relation to the Council’s position:

         ?       Chorley Council had invested £2m in the Icelandic Bank, Landsbanki on 9 September 2008.  This was due to mature in December 2008.  The Bank was now in receivership and its assets had been frozen.  A number of Councils (116 in total) were in a similar position, having invested in Icelandic Banks which had gone into receivership. This included Lancashire County Council, along with a number of other public bodies including hospitals, universities and charities.

         ?       The Government had indicated that it would do all it could to assist local authorities and the Local Government Association (LGA) has been working with local authorities on our behalf to help recover our  position.

·              Chorley Council made investments in line with the Treasury Management Strategy approved by the Council in February 2008.  The strategy follows best practice in maximising income from investments whilst also spreading and minimising risk.  The Treasury Management Strategy forms part of the budget setting process.

         ?       The Council investments are managed externally by Sector Treasury Services.  Investments can be both short term and long term and decisions on the investments were made using the international credit ratings provided by credit agencies.

         ?       On 9 September when the Council investment of £2m was made, the credit rating for Landsbanki was good and remained so until 30 September.  There is now a Government investigation underway as to how the credit rating agencies continued to show a good rating up until such a late stage prior to the Icelandic Bank going into receivership.

         ?       The administrators dealing with the receivership of Landsbanki cannot say when, or how much this and other Councils and public bodies can recover.

         ?       The decisions on investments are delegated and undertaken by officers.  The Chief Executive has undertaken an investigation into whether the Director of Finance acted appropriately in undertaking this investment.  Her findings have concluded that he acted both appropriately and in the best interests of the Council.

·              As a Council we are also reviewing the Treasury Management risk ratings, seeking to minimise further,  the risk to taxpayer’s money.

Councillor Alistair Bradley asked a series of questions on the period of deposit, the rate of interest on offer, the investment of larger deposits over longer periods of time and the amount of the Councils’ investment abroad.

Councillor Peter Wilson commented on changes to long term interest rates earlier in the year which he felt should have been cause for concern, Treasury advice about security and liquidity, and the fact that  ...  view the full minutes text for item 189.