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Taxpayers assured over Iceland cash

PUBLISHED: 17:08 22 October 2008 | UPDATED: 10:12 23 August 2010

TAXPAYERS are being assured the £50 million of council money invested in collapsed Icelandic banks will not impact on services. Bosses at Kent County Council (KCC) also said there is a good chance the money will be recovered with news of a $6 billion r

TAXPAYERS are being assured the £50 million of council money invested in collapsed Icelandic banks will not impact on services.

Bosses at Kent County Council (KCC) also said there is a 'good chance' the money will be recovered with news of a $6 billion rescue package to stabilise Iceland's economy.

Last week the Reporter revealed that KCC was among 100 local authorities in the UK to have deposits in the collapsed Icelandic banking system.

Leader Paul Carter said: "I would like to reassure you that KCC does not have a liquidity problem and that there will be no adverse impact on our, which include salaries and pensions."

A total of £50 million of the council's £2.6 billion budget was invested in three banks: £15million with Glitnir, £17million Landsbanki and £18million

with Heritable.

Glitnir and Landsbanki have been taken over by the Icelandic government and Heritable, which is Icelandic-owned but based in the UK, has gone into receivership. KCC also invested £11.1 million of Kent Police Authority funds in Icelandic banks.

On Monday a $6 billion rescue package led by the International Monetary Fund (IMF), an international organisation that oversees the global financial system, was being put together to help stabilise the Icelandic economy after its banking system collapsed earlier this month.

The IMF has demanded a review of Iceland's banking legislation to ensure it complies with international best practise. The remainder of KCC's deposits are spread across 31 different banking institutions. Both Dartford and Gravesham council were unaffected by the collapse because they had no deposits in Icelandic banks.

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