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Millions paid back in Icelandic cash

Kent County Council logo
Kent County Council logo

by political editor Paul Francis

Kent County Council has been repaid £3million of the £50million it deposited with three Icelandic banks.

The money has been refunded from the UK-based Heritable bank, where the county council had a total of £18million deposited.

The authority has not yet received any money back from the £15million it has with Glitnir and £17million with Lansbanki but remains optimistic that it will eventually recoup the bulk of its cash from all three.

Cllr John Simmonds (Con), KCC cabinet member for finance, said he was pleased by the news of the first repayment.

"We are very pleased that the process has started and we have no reason to believe that the forecasts of recovery [for the remaining money] will not be fulfilled. We still remain optimistic and there is nothing that indicates we will not be getting the rest returned," he said.

Administrators for the banks have calculated that KCC and other councils are likely to receive between 80 and 90 per cent of their money, provided they retain their status as preferential creditors, meaning they will be given greater priority.

It is unlikely the remainder of the money will be returned in one go and instead repayments will be staged over a period of years, with full recovery of the cash not expected until 2013.

KCC has estimated that its predicted loss overall, based on current information, could be £3.4million, although that sum could change if the eventual settlements incorporate an element of the interest owed on the deposits.

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