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Two councils have taken on the Audit Commission after being branded ‘negligent' in the report on the Icelandic banks fiasco. Kent CC and Havering LBC – two of the seven authorities ‘named and shamed' by the commission – have called on the watchdog to withdraw the negligent tag. The report, Risk and return, claimed the councils had failed in their duty to taxpayers after investing in the banks after their ratings were downgraded. But the two councils have hit back and demanded the commission withdraw the wording. Havering LBC has also written to commission chairman, Michael O'Higgins, demanding a retraction and an apology over the ‘unwarranted slur', and threatening legal action unless it is amended. Havering leader, Michael White, said he was ‘astonished' at the commission's choice of words. ‘As well as doing huge damage to the standing of the seven councils which were named, I believe this saga has further tarnished the reputation of local government.' Havering claims it was informed the Icelandic banks had been downgraded 15 minutes after it made its final investment. The council and commission are discussing amending the report to describe Havering as ‘unfortunate' rather than negligent. Kent CC chief executive, Peter Gilroy, revealed its negotiations in a full council meeting. He said he was ‘encouraged' by the direction of the negotiations, but said they were ‘continuing'. The plan for Kent is the commission would drop the word negligent and say the authority ‘has accepted its policy was breached... it claims that there was a human error and its actions can properly be described as carelessness'. The Audit Commission told The MJ: ‘No agreement has been reached and it would be inappropriate to comment at the moment.'

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WHITEHALL

Councils want commission

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