AFTER ongoing legal disputes over North Somerset Council’s investment in an Icelandic bank, a councillor has spoken of the risks which more overseas investment may pose to taxpayers’ money.

As of September 30, the council had £58.2million invested in banks, deposits and government bonds, according to the treasury management report, which was recently considered by the council’s executive.

Now the council has confirmed it ?will invest £3million with the Overseas Chinese Banking Corporation, in Singapore.

Liberal Democrat councillor Mike Bell voiced his opinion regarding the new investment at a full council meeting last week.

He said: “I am not convinced that we should be investing in any overseas banks. Now must be the time to invest closer to home and investing in Singapore may raise some eyebrows in the public.”

The council’s £58.2million investment in overseas banks includes the £3million invested in the failed Icelandic bank, Landsbanki. This is now subject to legal disputes in the Icelandic courts and eventually the council hopes to get most of it back.

Cllr Bell said: “I know that the council will say investments are only placed with banks with good credit ratings and with countries that are stable, but that is what was said about Iceland.

“I believe most local taxpayers would feel more comfortable knowing that these investments were in the UK where we have greater security and legal backing.”

But Cllr Tony Lake, executive member for finance, said making an investment abroad was not a risk because the bank had been thoroughly researched.

He said: “We do have some money invested with a Far East bank which is triple-A rated. We are very careful especially in view of what happened in Iceland. If it wasn’t triple-A rated we wouldn’t be investing in it.

And he said the £3millon lost in the Iceland banking crisis would soon be returned to the council’s finances.

He said: “The detail is about how and in what form the payment is made, but we are confident we will be receiving a payment in the near future.”

But at the meeting Cllr Bell asked him to consider changing the treasury management policy and not invest taxpayers money in these banks.

He said: “I do not believe that taxpayers’ cash should be gambled abroad in the pursuit of slightly better interest returns, especially at a time when the council budget is tight, it is cutting services and making staff redundant.”

Reproduced from the Weston and Somerset Mercury