It seems that Kent County Council is unlikely to persuade the Audit Commission that it was wrong to label it negligent over its £50million investments in Icelandic banks.

The council lodged a formal complaint after the Audit Commission said KCC and six other authorities had been “negligent” over their investments.

A copy of a letter sent by Michael O’Higgins, the chairman of the Audit Commission to KCC opposition Labour group leader Mike Eddy I’ve seen makes clear that the Commission is sticking to its guns.

In it, Mr O’Higgins says “we have been surprised by the reaction of KCC to our report as we consider it to be balanced, well-researched and on the whole positive about local authority treasury management and the framework within which it operates. We also consider that we were justified in describing the seven local authorities, including Kent, which placed money on deposit in Iceland in October 2008 as having acted negligently.”

It goes on to say that the report “does not detract from our generally positive view of the way in which the council is run” – something I imagine will be scant consolation to the ruling political administration.

Meanwhile, a cross-party committee of MPs says local councils like KCC should not be baled out by the taxpayer over any money that might be lost as a result of their investments.

The Treasury select committee – whose members include Sevenoaks MP Michael Fallon – says that charities who invested should be compensated but not councils.

The report acknowledges some local authorities would feel "hard done by" but said it would "seem perverse to reward those authorities who failed to protect their investment with yet more money from the taxpayer".

The argument here is that councils were “informed investors” and should have seen Iceland’s collapse coming whereas charities aren’t. I’m not sure councils will feel this is entirely fair.

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Meanwhile, KCC leader Paul Carter has issued a press statement in response to the Taxpayers’ Alliance survey showing chief executive Peter Gilroy’s salary was £255,000 in 2008 and that the council now has 30 staff earning more than £100,000.

Here it is:

"Kent County Council has to compete in a marketplace to attract the very best staff. Kent is the largest local authority in the country with an annual spend of £2.2bn a year, educating 220,000 children, maintaining 5,000 miles of roads and 4,000 miles of pavements, fixing 5,000 street lights a month, getting rid of 800,000 tons of rubbish every year and providing services for many of our 238,600 over 65 population - and these are just a few examples.

"Markets move up and down and we will move with the times to recruit the best possible staff to Kent County Council."

You can read our coverage here

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If you've got a story or issue you would like me to investigate you can email me at pfrancis@thekmgroup.co.uk