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Solihull Council still waiting over frozen Iceland cash

TWO months after losing £3 million in the Icelandic bank collapse, there is no sign yet of Solihull Council getting its money back.

TWO months after losing s3 million in the Icelandic bank collapse, there is no sign yet of Solihull Council getting its money back.

Following the crash, council officials said they were confident that between them, the Local Government Association and Treasury would succeed in securing the release of the funds quite quickly.

But Councillor Ken Hawkins, cabinet member for resources, will tell full council next Tuesday 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 s1 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 s50 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 s100 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 but also in Ireland and Australia.



Cathrina Hulse
Multimedia Journalist
Annette Belcher
Multimedia Journalist
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