As the Icelandic scandal begins to unravel, the spotlight now falls on council leader Mike Freer and his colleagues on the Cabinet Resources Committee.
After months of lies, the council finally admitted last week to knowingly breaking its own investment rules. With £27.4 million (plus interest) at risk this is not a mere technicality.
Mike Freer says that officers repeatedly told him verbally and in writing that the investments were in line with official policy. But when did he ask them for confirmation? Was it only after the Iceland banking collapse?
Did he ever ask any such questions previously? It seems not.
Cllr Freer told the Cabinet Overview & Scrutiny Committee last November that he had no recollection of discussing the council’s investments with officers until news about Iceland broke. But the Council’s Constitution (Financial Regulations, Part 1 Section 7) states:
- Cabinet Resources Committee will create and maintain a Treasury Management Policy Statement…
- Cabinet Resources Committee will receive reports on its treasury management policies, practices and activities…
If Cllr Freer genuinely didn’t know about the council’s investments, this suggests that the Cabinet Resources Committee failed to do the job for which its Members were handsomely paid. Did they not bother reading the reports given to them? Or were they content chasing higher interest rates whilst turning a blind eye?
Mike Freer now claims that he was misled. This is a very serious accusation and, if true, then arguably the officers involved should face criminal investigation. Presumably, Cllr Freer can produce the written statements he refers to above as proof.
But Cllr Duncan Macdonald states on his blog:
"On the 28th October last year a report was produced called ‘Council deposits in Icelandic banks – Supplementary report’. The report was a report of the Leader and Cabinet member for resources who is of course Mike Freer. The report is exempt which means that I cannot tell you what is in it. However I can tell you that it was the information contained in this report that alerted the working party on Icelandic banks that the treasury team had not followed their own strategy."So, according to Cllr Macdonald, who sits on the scrutiny committee investigating the Icelandic investments, Mike Freer had sufficient information before him last October to know that the council was not following its own rules. But for months he has been telling us something quite different.
The public are entitled to know whether they have been misled by Cllr Freer as to what he knew and when he knew it, or whether he and the Cabinet Resources Committee simply failed to bother doing their job properly.