Gerry wrote below: "The case for greater autonomy rests on the fact that we as citizens can keep a keener eye on what is going on when decisions are made locally. The events of the last few months suggest that such a keener eye is needed more than ever."

Exactly.

Residents have so little knowledge about council finances that the mere fact they could be investing millions seemed surprising to them, let alone how and why they fund services in the long term. The first response was "kick 'em, they must be at fault." That's not a good sign.

Local government finances are a foreign country to most people (councillors included). I've written lots of articles and press statements for councils explaining their budgets to residents. It was hard work. There was usually only one or two officers trusted enough to explain things to me.

So perhaps there is an opportunity for councillors to use this crisis to reconnect with residents by being clear about what's coming in and what's going out - and why.

Finally: it gives me no pleasure to see the Audit Commission also caught up in the Icelandic crisis.

OK, I did snigger quite a bit actually.