UNTIL this week, for most people, Iceland was either Kerry Katona's 'buy one, get one free' supermarket or the answer to the quiz question "Which country's capital is Reykjavik?"

But as we're finding out, a week is an eternity in today's financial crisis, throwing up countless mind-boggling surprises.

Before I get going I have to declare an interest. I was one of the 250 odd thousand British people seduced by the high rate of interest on offer from Icesave and placed not an inconsiderable proportion of my children's inheritance in their trust.

Alastair Darling suddenly became a more popular politician than anyone in history when he guaranteed we'd get all our cash returned. Gladstone, Disraeli, Churchill, Thatcher, Blair … pah, lightweights the lot of them. Give me the silver fox, 'money-back' Darling any day of the week!

Anyway, for 24 hours there was genuine, unadulterated stress in our house, the kind of stress that provokes arguments about the most trivial of things.

It never crossed my mind 12 months ago that putting my hard earned savings into a bank would be a risk. The stock market, as a vehicle to place money has always made me nervous, I have an innate distrust of it. But a bank, whether it be from a small frozen country up north or somewhere even more exotic, well – it's as safe as houses isn't it? (And there's an old truism that now needs reworking) I should also point out at this stage that you must ignore any financial advice I ever put your way, as it comes with a very, very large health warning. One reason among many is that I remain the only person in living memory to sell a luxury flat overlooking the Clifton Suspension Bridge at a huge loss!

So, while destination Iceland didn't surprise me because I was in it up to my neck and I presumed many others were too. I wasn't however, expecting those others to be councils, police authorities, charities and the like.

In the West alone, councils have either invested in, or loaned to, Icelandic banks a total of more than £100 million. Of course I'm in no position to criticise anyone for chasing a decent rate of return in the frozen North but what I really want to know is where these authorities get all this money from in the first place and why aren't they spending it on our behalf, here and now?

Bristol City Council for example are small investors in Iceland, just £8 million. They proudly revealed this week that this was a relatively tiny percentage of their £200 million pounds investment portfolio. Yes you read that right – £200 MILLION. Now correct me if I'm wrong, haven't we just had a 3.5 per cent council tax rise that itself followed several above inflation hikes?

Aren't we constantly told that they can't afford this and they can't afford that? You know, there's no money available for improved street lighting, better rubbish collection, more bobbies on the beat, a bigger investment in public transport etc. etc. But here they are with £200 million, of our money, being invested all over the place. Why? And why isn't it being spent on all of the above right now?