In the wake of the Icelandic bank collapse and the financial crisis local government finds itself in, LGC hears from Norfolk CC who kept their advisers and Hillindon LBC who changed their’s.
Stick: ‘We kept our advisers’
We’ve worked closely with Butlers for several years now. In this time, we have been impressed with the quality of the service they provide us and the expert advice that has helped us make informed choices about our investments. Smart investing has enabled us to boost our income by millions of pounds a year, which makes a big difference to our budgets and ultimately the services we provide to the taxpayer.
When the Icelandic banks collapsed last year, our members asked whether we were receiving sound investment advice. We were able to provide substantial evidence that we were. Our councillors were and remain satisfied that our relationship with Butlers should be continued.
The Audit Commission’s report into UK investments in Iceland also found that we, along with many other councils, acted responsibly and followed the best advice available at the time.
Our current three-year contract runs out in August 2011 and we will look at other alternative providers then.
Glenn Cossey, Investment Manager at Norfolk CC
Twist: ‘We changed our advisers’
To ensure we remain one of the most efficient councils in the country we are always reviewing the way we work. So we would have been looking for a change in the service we required from our treasury management advisers irrespective of whether we had money in Iceland or not.
After Iceland and the wider banking crisis, the whole treasury management environment became much more challenging, so we wanted our advisers to offer a more tailored approach to assist us in managing our portfolio of debt and cash deposits.
Debt refinancing or investment opportunities sometimes only exist for a day and then they disappear. We therefore needed to work with our advisers on a daily basis to take advantage of such opportunities.
We didn’t end our relationship with Sector because they were incumbent at the time of Iceland. When we re-tendered the contract in February, we had an open mind but Arlingclose convinced us that they were best placed to meet our needs.
Paul Whaymand, deputy director of finance Hillingdon LBC
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