Call for 'frozen' county cash to be returned

A JOINT letter from West Sussex County Council and Sussex Police Authority is on its way to Chancellor Alistair Darling today, demanding that millions of pounds frozen by the Icelandic banks crisis is returned.

The county council has £12.9m in the UK-licensed Heritable Bank, while Sussex Police Authority have invested £6.8m. Both sums were frozen when Heritable was taken into administration.

The letter is being sent by county council Leader Henry SmithADVERTISEMENT, Louise Goldsmith, Cabinet Member for Finance and Resources, and Lionel Barnard, chairman of Sussex Police Authority.

It says: "We are demanding your assurance that our deposits in Heritable will be underwritten by the Government in exactly the same way as deposits in the equally UK-licensed major banks and institutions that were party to discussions with the Treasury a couple of evenings ago, and are beneficiaries of the recently announced rescue package."

The money is surplus cash balances being held for future use. The joint letter points out that the deposits complied fully with guidelines on how council investments should be spread across a number of banks. It points out that Heritable had the second highest credit rating of any financial institution ? similar to that of the banks and institutions now being underwritten by the Government.

"We understand that the Government is already taking steps to ensure that individual retail depositors will be protected from loss in respect of the cash they have placed with Heritable," the letter continues.

"We can see absolutely no reason why our individual council taxpayers, whose money our deposits are, should be treated any differently from individual the depositors you are already protecting.

"In many cases, our council taxpayers are less able to shoulder the loss than individual depositors"

The letter says both authorities are seeking Mr Darling's immediate assurance that protection will be given to satisfy the understandable concerns of residents.

This article was found on the West Sussex County Times Website publication date was - 10th october 2008