COMMENT ON AUDIT COMMISSION REPORT ON RESTORMEL FINANCIAL PRACTICES

2.00.00pm GMT Thu 22nd Jan 2009

Commenting on the news that Restormel Borough Council broke two of its own investment rules when depositing £3million of local tax-payers money into Iceland's Landsbanki last October, Stephen Gilbert, the prospective MP for St Austell & Newquay, said: "I think people will be shocked that officers at Restormel thought it was okay to break their own investment rules when dealing with such a large amount of public money."

He added: "Although the officers were acting under the advice of the Council's external investment experts they should still have stuck to the rules, and I would expect the Council to take disciplinary action against those responsible."

"Questions also need to be asked about why the so-called experts were happy to advise Restormel that Iceland was still a good investment opportunity just hours before the country's financial system collapsed. I will be very interested to hear what they have to say for themselves when they are quizzed by Parliament."

"With around a total of almost a billion pounds of public money tied up in Iceland from almost a hundred local Councils, this is a major national problem. In Restormel's case it would seem bad advice was made worse by bad decision making. The important thing is that every effort is now made to get the money back."