The National Association of Local Councils (NALC) warmly welcomes that its ongoing campaign to protect local (parish and town) councils’ investments and savings has finally succeeded.
Local councils’ investments and deposits are now to be protected under the Financial Services Compensation Scheme where previously it had not been.
This is great news for hard working tax payers who are paying for services and representation by their respective local councils, who rightly in turn look to save and invest these taxes for the long term benefit of local people. This development acts as a safety net in case any financial services firms experience any difficulties and local council investors and savers need compensation for their saving and investment of local taxpayers hard earned money.
The Prudential Regulation Authority (PRA) of the Bank of England announced a change in policy to extend the protection afforded under the Scheme to “Small Local Authorities” (SMAs). These Authorities are defined as Local Authorities with “an annual budget of up to 500,000 Euros”.
The scheme changes are that SMAs are protected in the same way as other protected investors i.e. for deposits/investments up to £75,000 with any UK bank, building society and credit union as well as with overseas firms PRA deposit-taking permission and UK branches of European Economic Area (EEA) credit institutions.
Cllr Ken Browse, chair of NALC, said: “It is brilliant as new and returning councillors have taken office recently around the country with local government finance being one of the most pressing issues they face that their councils’ saving and investment are now protected under the Financial Services Compensation Scheme. It has been a long time campaign to persuade the Bank of England to change their mind on this. But they have now and this is to be welcomed.”