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Icelandic bank cash 'written off'

PUBLISHED: 16:28 09 December 2009 | UPDATED: 11:18 23 August 2010

COUNCIL bosses have written off chances of recouping £2.7 million invested in Icelandic banks. John Simmonds, cabinet member for finance at Kent County Council, admitted that he does not expect the council to be repaid this money, lost in October last ye

COUNCIL bosses have written off chances of recouping £2.7 million invested in Icelandic banks.

John Simmonds, cabinet member for finance at Kent County Council, admitted that he does not expect the council to be repaid this money, lost in October last year.

He said: "We expect to get about 90 to 92 per cent back. The loss, on the scale of the KCC budget is quite small, but I accept that it is still a serious sum of money."

In total, more than £30 million of taxpayers' money was lost when banks Landisbanki, Glitnir, and Heritable all collapsed, as well as a further £16 million from the council pension fund, and £1 million from the fire service.

Since then, the council has fought hard to recuperate funds, specifically campaigning to ensure it remained a preferential creditor - meaning it would be first to receive any repayment. He added: "At the moment we are still regarded as a preferential creditor, which is of absolute importance. No doubt there has been a lot of pressure applied by some large corporations to change that and we have had to fight hard to maintain our position."

He also revealed the council has only invested in UK-based banking groups since the collapse, but said they would not ignore foreign opportunities.

Cllr Simmonds added: "We also had money invested with Royal Bank of Scotland. If it wasn't for a huge government bailout, RBS would have been in the same position as those in Iceland."

The next repayment is due before the end of the year and he hopes to have all but the £2.7 million by the end of 2011.

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