Monday 23 February 2009

No guarantee over Barnet’s Icelandic cash

I have just returned from a pleasant few days at the sea-side. The local newspaper was the highly informative Kent Messenger.

Worryingly, the newspaper carried a warning story that councils which had deposited money in Iceland might not get their money back. Kent County Council tops the list of local authorities with £50 million on deposit. Barnet has £27.4 million invested, excluding unpaid interest.

The new Icelandic Business Minister, Mr Gylfi Magnusson (pictured left), told interviewers: “They [the councils], as all other creditors of the collapsed Icelandic banks, will unfortunately have to wait until we have sold the assets of the collapsed banks. Unfortunately this takes time and a lot of creditors will not be paid back in full.”

He went on to warn: “There simply aren’t the assets left in the collapsed banks that would be sufficient to pay all creditors.”

Kent and Barnet Councils sent officers to Iceland last year representing all local authorities with funds at risk. They urgently need to ascertain from the Administrator the value of the banks’ assets and the level of liabilities so that we can begin to estimate the likely shortfall. We have a right to know how much of the £27.4 million we will ever see again.

It is simply unacceptable for the council to bury its head in the ice hoping that everything will turn out OK. When a senior government Minister says that there are insufficient funds to pay creditors, it is time for councillors to sit up and take notice and to stop trying to pass the buck. Or Krona.

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