Tuesday, 10 March 2009
Statement from Mike Freer, Leader of the Council
Mike Freer, Leader of Barnet Council has just issued the following statement:
Despite previous assurances from Barnet Council Officers that correct treasury management controls were applied to Icelandic deposits, it has now come to light that in fact this was not the case. On Monday 9th March I was presented with a scrutiny working group report which makes clear that officers did not in fact follow the correct procedures despite having repeatedly told me both verbally and in writing that they had done so.
The lead officer responsible for this failure resigned his post prior to the scrutiny meeting on Monday 9th March and I have now written formally to the Chief Executive asking for a full investigation into how I as Leader of the Council was misled by officers in this matter.
An external investigation will be carried out to identify why our external auditors did not pick up these issues in their previous audit work. I would like however to reassure residents that at this point the Icelandic deposits remain frozen by the administrators of the two banks involved and discussions around the return of this money remain positive and ongoing.
Last month, I asked the council if they would conduct an independent review of their treasury management policies. They responded that they had no plans to do so. Now we know why!
I welcome the Leader’s decision to commission an external investigation, provided that it is completely thorough, however embarrassing it may prove to be, and that it reports its findings publicly.
The Leader claims that he was misled. But the treasury team sent confidential reports about the investments to the Cabinet so we need to know, as a matter of urgency, precisely what was said in those reports.
In short, the investigation must discover who knew what, and when did they first know it? The officer who has resigned is Mr Patrick Towey, Treasury Manager. It is inconceivable that he was acting alone or that Chief Financial Officer, Clive Medlam, did not know what was going on. Medlam is the officer who signed the reports authorising the council to borrow all the money that was subsequently invested in Iceland.