Council gets more money back after Iceland bank crisis

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DAVENTRY District Council (DDC) could get nearly half of the £8 million it lost in the Icelandic banking crisis.

A report presented to the authority’s scrutiny and improvement committee on Tuesday said the council should receive £1.987 million by the end of the next financial year. This is in addition to the £1.5 million already recouped.

Cllr Catherine Lomax, who sits on the committee, said: “It has been a lot of hard work to get this money back, but it has been very encouraging news.

“It was a substantial hit to our reserves at the time so what we can get back is going to be good to hear.

“It is also a positive news given that our finances are facing severe difficult as a result of the cuts made by central government. Any news such as this at a time when we are facing these pressures has to be welcomed.”

DDC deposited some of its reserves into four Icelandic banks which later collapsed in October 2008.

The extra money comes after two of the banks, Landsbanki and Glitnir, gave preferred creditor status to the 123 local authorities in England which had lost out in the crisis following work from the Local Government Association.

However, this decision could be overturned as an appeal from other interested parties is likely.

Cllr Lomax added: “If we do not get the preferred creditor status, then we will not get as much money back as we would hope to have done.”

Other committee members were more optimistic in getting the money back.

Chairman Cllr Alan Chantler said: “We are as well placed as any other authority to get money back from Icelandic banks.

“Our view is that we are optimistic at being able to recover substantial amount of money.”

A DDC spokesman has said the authority expects to recover the majority of the £8 million but warned this could take several more years.