22 May 2009
By Tash Shifrin
Local authorities could recover a substantial amount of the almost £1bn they invested in Iceland’s failed banks, CIPFA’s Local Authority Accounting Panel has revealed.
The panel has included estimates of how much councils should be able to recoup in its latest guidance on the accounting treatment of Icelandic deposits, published on May 19. Investors in Landsbanki could expect to recover around 90% to 100% of their deposits, while those with money in Glitnir should be able to recover the full amount deposited, it said.
Authorities should be able to recoup up to 80% of sums invested in Heritable Bank and around half the money deposited with Kaupthing Singer and Friedlander.
Kent County Council, which has £50m locked up in Iceland, said it was ‘likely to get over 90% of its total deposits in Icelandic banks returned’. Finance director Lynda McMullan said it was ‘good news’, adding: ‘We have long been confident that we would get most of our deposits back. This has now been confirmed. However, we will continue to fight to get every last penny back.’
Both Kent and the London Borough of Havering have received offers from the Audit Commission to retract its use of the word ‘negligent’ in describing their investment of sums in Iceland after September 30 last year. Negotiations are continuing.