Published: 14:04, 30 April 2009
by political editor Paul Francis
The Audit Commission says it is prepared to drop a claimwas negligent over its £50million deposited in Icelandic banks.
The spending watchdog has come under pressure from the authority since publishing a report that said KCC and six other authorities were negligent over the deposits made in the banks.
The council had threatened to take the Commission to court to force it to retract the charge.
That prospect appears to have receded after the Commission offered to remove the charge of negligence. It has now indicated in a letter it is prepared to accept KCC's argument its actions over the deposits should be described as "carelessness".
However, the Commission says it maintains KCC missed important warning signs about the state of the Icelandic economy that others had spotted and acted on.
In a proposed amendment to its original report, the Commission states: "There is no escaping the simple fact that £32.8million of public money is now at risk and it would not be if those authorities had not missed the warning signals, which in the Commission's view, they should have seen."
In relation to KCC, the Commission has proposed the new report will now drop the word negligenct and say: "[it] has accepted its policy was breached...it claims there was a human error and its actions can properly be described as carelessness."
Cllr Nick Chard (Con), KCC's cabinet member for finance, said: "I am pleased it has agreed to change the word 'negligent'.
"We thought it was inappropriate and had legal connotations we considered unfair. We made our views known and it agrees with our position."
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