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No sign of lost Iceland money

Solihull Council is no closer to recovered the £3m that was lost following the collapse of three Icelandic banks.

Solihull Council is no closer to recovered the £3m that was lost following the collapse of three Icelandic banks.

The authority was one of several to have invested money in the country and subsequently lost millions when the banks failed. Following the news two months ago, council officials were confident that the cash could be replaced fairly quickly.

But next, week Councillor Ken Hawkins, cabinet member for resources, will tell his fellow councillors that the earliest the assets can be returned is next spring, and there is no guarantee it will happen even by then.

The council invested £1 million each in Landbanski and Kauthing, both of which have been nationalised by the Icelandic government, and a further million in Glitnir, now part-nationalised.

It has pointed out that when the investments were made, the three banks had a triple A credit rating and were considered extremely safe.

But local authorities, together with other public bodies and charities, lost hundreds of millions of pounds in the crash.

Cllr Hawkins said representatives of Kent County Council - which lost £50 million - and the London Borough of Barnet were negotiating with the banks on behalf of local authorities.

“It’s a very complicated matter and will take some time to sort out but I am still confident the negotiations will be successful and our money will be refunded eventually. However, it will be without interest.

“At any one time, the council has more than £100 million invested in banks and building societies, so three million represents a relatively small proportion of our funds. But it is still a lot of money to us and could be used to pay for local services and help keep council tax down. We want it back.”

Solihull was the only one of the seven West Midlands metropolitan councils which lost money in the Icelandic meltdown.. It currently has deposits spread around some 20 financial institutions, mostly in the UK.

 

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