Iceland cash set to be recovered

Front of the queue: Chief executive of council, Mike Nuttall
Front of the queue: Chief executive of council, Mike Nuttall
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Millions of pounds of taxpayers’ cash deposited in failed Icelandic banks looks set to be recovered.

South Ribble Borough Council invested £5m in the banks before their collapse in 2008 and have faced an anxious wait to see how much of that amount they will get back.

A total of £3m was invested in a long-term loan with Landsbanki, and £2m in short-term investments with their English arm Heritable.

The authority has so far received more than £830,000 back, and now courts in Iceland have ruled that UK authorities will be preferred creditors in getting their cash back.

The council was one of 123 local authorities in the UK affected by the meltdown of Iceland’s economy brought about by the failure of all three of its major banks in October 2008.

Mike Nuttall, chief executive of South Ribble Borough Council, said: “It is excellent news that the judges in Iceland have heard the arguments on both sides and found in favour of South Ribble Borough Council and the other affected local authorities in the UK.

“This judgment means that our claims have been recognised as deposits with priority status over other creditors’ claims, meaning we will be at the front of the queue when it comes to getting our money back following the collapse of the failed Icelandic banks.

“We hope that our opponents will accept this clear verdict. The way in which we have co-ordinated the legal action in this matter with the Local Government Association and other local authorities has minimised legal costs for all the parties involved and provided value for money for taxpayers.

“If there is any further legal challenge, we will continue to co-ordinate our response with other organisations.”