Has WCC gambled away 50 years of support for the TransWilts?

[Graham Ellis]

I'm not a financial expert, so I'm having trouble appreciating everything that's going on in the tumultuous world of the city, stocks, shares, and so on at the moment - but that doesn't stop me from wanting to learn a little bit and asking questions.

My understanding is that - as a general rule - the higher the potential return from an investment the riskier it is. So by investing 8 Million pounds of money in Iceland to get (as I understand it) a higher return, Wiltshire County Council were to a greater or lesser extend gambling ... and it appears that the gamble may not have come off.  So ...

a) Who in the Council was responsible for taking the gamble?  Was it their chief financial officer, Sandra Schofield?  Was it regarded as a big enough decision for Dr Keith Robinson, the Chief Executive to be involved too?

b) Does the council really have 8 million pounds to risk in this way? They plead poverty when asked to make a contribution of perhaps 1% to 2% of this sum towards providing decent public transport links across the county, and yet they can risk the sum that's equal to 50 years of providing this service.

c) If the money is not returned, will the people who made the decisions to send it there loose their bonuses, and / or have to make any form of other recompense.  If you search around elsewhere on this site, and in local newspaper archives, you'll find that each of them gets a salary that you or I would be rather jealous of ... and that's before extras.

[Graham Ellis]

As I say - I am not a financial expert - so I'm giving you a link to what the WCC site says about this:

http://www.wiltshire.gov.uk/getnewsitem.htm?id=2353

Statement includes:

We are confident this will have no impact on the immediate provision of services to people in Wiltshire. However, if we are unable to recover some or all of these funds we, like many other Councils, will have to review our longer term plans.

So it MAY lead to a loss of services

and

This money is invested until it is needed to ensure we get the best possible income for the people in Wiltshire.

Whilst this may be the intent, at present it appears that what was intended and what has actually happened are direct opposites.

Wiltshire is joining with the Local Government Association in backing their call to Central Government that Council Assets are protected in the same way as individuals savings deposits have been.

"We would like the government to bail us out" ... which I think would just be more taxpayer's money.  I'm presuming that the decisions to invest in Iceland were properly taken by WCC, where there are a number of very well paid experts in matters financial.

My personal opinion: It's one thing asking the government to help "Joe Public" who hadn't realised, perhaps, the risks he was taking, and quite a different matter to ask another Joe Public (who has probably NOT lost anything personally in Iceland) and who works hard to earn a decent salary to bail out the gamblers at County Hall.  However, having screwed up it might in the end be a wise decision to bale 'em out ... and consider a team change?

[Lee]

Wiltshire County Council could get back only a third of the £8m it invested in an Icelandic bank that has collapsed (links below.)
http://www.wiltshiretimes.co.uk/news/latestheadlines/3777573.Council_s_cash_on_ice/

http://www.wiltshiretimes.co.uk/news/latestheadlines/3784102.Council_losing___27k_interest_a_month_/

[tramway]

My understanding is that - as a general rule - the higher the potential return from an investment the riskier it is. So by investing 8 Million pounds of money in Iceland ......

I think it should have been either Lidl or Aldi, at least they are local.