Icelandic cash comes back to Norfolk

More than �3m of taxpayers' money which had been stuck in Iceland after the collapse of three of the country's banks has been returned to the coffers of Norfolk County Council.

The county council, which had �32.5m invested in three Icelandic banks which collapsed in October 2008, was one of four councils involved in a test case last autumn –supported by the Local Government Association – to recover the cash.

The council had �15m in Landsbanki, �10m in Kaupthing and �7.5m in Glitnir when they were taken into administration.

Last October, Iceland's Supreme Court upheld a ruling made earlier this year that British councils which had cash in Landsbanki and Glitnir should be given priority over other creditors.

That means the county council is likely to get back about 98pc from Landsbanki by 2018 and full recovery from Glitnir.

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The first �1.5m of Landsbanki money was recovered by the county council in December and this month a further �3m of the cash came back to Norfolk.

The county council had already got about �6.5m back from Kaupthing, which should rise to about �8.4m.

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And, following a creditors meeting at the end of January, the Glitnir Winding-up Board are proposing to make a payment to the county council before the end of the financial year on March 31.

Ian Mackie, Norfolk County Council's deputy leader and cabinet member for finance and performance, said: 'This is a very important step forward and shows Norfolk was right to be part of the original depositors who took the claim to the Supreme Court. A third of the original deposit has been returned and we are confident further money will follow which will return money to the general balances.'

Mr Mackie stressed that the money was not a windfall, but had been accounted for in the budget the council set earlier this month and the return of it had enabled �2.5m more to be put into adult social services.

Mr Mackie added that the council had suspended investment in Money Market Funds for 12 months. He said: 'We are taking a very risk averse approach to our investment strategies. We want to maximise income, which goes back into services, but with the state of the global economy and with the Eurozone in troubled waters, we have suspended investment in the money market funds.'

Breckland Council, which had �12m tied up in Icelandic banks and Great Yarmouth Borough Council, which had �2m. are expecting to get cash back too,

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