Letter to Local Newspapers from Julia Goldsworthy MP
October 13, 2008 10:55 AM
Originally published by South East Region Liberal Democrats
Originally published by South East Region Liberal Democrats
With reports that one in four local councils have millions of pounds of taxpayers' money each in collapsed and frozen Icelandic banks, the Government must explain why it is trying to wash its hands of the issue.
The response so far has been a pathetic attempt to back away from the problem. Anyone who uses local services or pays Council Tax will know that the loss of millions of pounds from local budgets will hit ordinary families hard.
Much of this money, such as business rates, is collected by councils on behalf of the Government. The Government must not simply duck the issue. It must consider relaxing the deadline for councils to pay business rates to the Treasury.
If the worst happens and the money invested in Iceland is lost, the Government must surely allow councils to spread these debts over several years to protect local people from massive Council Tax rises and service cuts.
However, the answer isn't for the Government to promise to guarantee these loans. That would simply pass the buck from council tax payers to income tax payers, which is hardly much comfort to those already struggling to pay their bills.
The first priority must be for the Government to back councils in aggressively pursuing Icelandic banks to make good on council loans. When it comes to budget time, and if funds have not materialised, it is crucial that ministers allow councils to spread the debt over several years avoiding the massive damage caused by emergency service cuts.
There may be more bad news to come. There is a risk that large PFI schemes to build new schools, hospitals and transport links have funding tied to Icelandic banks. The Government must stop dithering on this issue and urgently assess the scale of the problem to ensure local services are protected.
Yours sincerely,
Liberal Democrat Shadow Communities and Local Government Secretary
House of Commons
London SW1A 0AA
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