Financial Crisis Fallout Contined to Hit South West: SW Councils £110 in the Red!

south west | transport | news report Friday October 10, 2008 14:00 by MoneyWatch - SouthWestWatch

SouthWestWatch - A clear becon of facts in a muddy fog of newsfiltch

Local councils accross the region have been hit had by the financial collapse - why what about the bailout? Why do the banks get the cash and the rest get the rash? MoneyWatch from SouthWestWatch investigates...

The ever-reliable Bristol Blogger has bagged another great story, as it emerges that Bristol City Council is one of a number in the region to have invested money in failed banks;

"Finally full details are emerging of the parting shot from Carew Reynell, Bristol City Council’s idea of a financial guru...Reynell, who appears to have been taking home a six figure sum to run the city’s finances in to the ground for some years now, has recently taken voluntary retirement after being offered a massive pay-off...Now fast forward to 2008 and what’s this we discover? Why it seems Mr Reynell has been playing the money markets and loaning a bit of our money to international banks. £8m of our money to be precise. To Icelandic banks would you believe?"
http://thebristolblogger.wordpress.com/2008/10/09/a-rey...gain/

Not good news at all. We also know that Somerset County Council has £25m invested Icelandic banks while North Somerset Council said it had £3m in one. Dorset County is out by £28m. Gloucestershire County Council £12m. Cheltenham Borough £11m. Plymouth £13m. Cornwall County £5m. Exeter City Council £5m. Total: £110 Million quid.

Not good news at all. Now we come to the bailout. The first major news-event bailout was the US bailout, endorsed by our own money-'Guru' Gordon Brown. Just to give you an idea of the great minds that came together to design this emergency package, here is how they arrived at the stellar figure of $700 billion;

“It’s not based on any particular data point,” a Treasury spokeswoman told Forbes.com Tuesday. “We just wanted to choose a really large number.”

That does not fill us with confidence. These people really know what they are doing. (We hope.) But that is not all. There are some who think this bailout is both not a good idea and an easy ride for the rich. Take AIG. Just one week receiving an $85 billion bailout, AIG executives went on a retreat to a luxury resort, spending nearly $500,000 on manicures, facials, pedicures, and massages, among other things. That does not fill us with confidence.

So how come the money local councils have invested (tax payers money - our money) is not covered by any bailout (by central government - our money also) but Banks (private corporations) are? To the tune of £500 billion quid. (We know they are supposed to pay it back...but will they?) Here is what the government says;

While the British government has not given a guarantee that the councils' money is safe, a spokesman for Prime Minister Gordon Brown said on Thursday: "As the Treasury have been making clear we do stand ready to discuss this particular issue with local authorities to see if we can find a way through."
http://www.reuters.com/article/euDealsNews/idUSTRE4987C...81009

But we have to ask - where is the money for all this coming from? Us. We're 'loaning' out £500 billion;

This is just the tip of the iceberg—and there is no guarantee that it will work. Working people thus face wage cuts and tax hikes to preserve the grotesque wealth accrued by the financial oligarchy under conditions in which tens of thousands have already been thrown out of work across Europe. Unemployment stood at 7.5 percent in August and there are predictions that millions more could lose their jobs by the end of the year.
http://www.ukwatch.net/article/eu_paralysed_in_face_of_...rmoil

More SouthWestWatch articles;

The Ongoing Decline in Local Media: ITV Cuts
http://bristol.indymedia.org/article/688980

South West Repossessions Rise Above National Average
http://www.bristol.indymedia.org/article/689002