'You're Not Getting Your Money Back'

Council admit little chance Icelandic bank cash recovery

Hopes that the £2 million deposited in failed Icelandic bank Glitnir may be recovered were dealt a blow when the Councillor who is charge of the borough's finances admitted that the prospect was unlikely.

Cllr David Scott told the Council meeting on Tuesday night that the latest communication from Glitnir Bank suggests that the process of restructuring the organisation will be a long drawn out process. With private depositors ahead of the Council in the queue for funds the chances of even a small proportion of the money being repaid is slim. The cash was money held by the Council to meet its day to day needs.

The Leader of the Council, Jason Stacey reportedly denied claims that the Council tried to mislead residents over the issue. When members of the local press initially contacted the Council they were told that Ealing Borough had no deposits in two of the Icelandic banks that had been in the news because of their financial difficulties. The Council claim that because they were not specifically asked about Glitnir Bank they did not feel it was necessary to mention the £2 million that had been deposited there.

The Council claim that if the borough's cash had been deposited in treasury bonds as suggested by Labour's Julian Bell a 4% increase in Council Tax would have been necessary. The Conservatives on the Council say he back-tracked on his suggestion when told of the possible impact.

Cllr Jason Stacey said, “Cllr Bell’s ignorance on financial matters is embarrassing and deeply worrying. His lack of knowledge on has not stopped him attacking the sound investment policies of Council officers, yet he clearly has no idea about how to balance risk himself. Cllr Bell’s willingness to chop and change direction in the blink of an eye shows he puts opportunistic politics above serious financial management.”

After the Council admitted to the Glitnir loss they carried a headline on the Council web site which said that no losses had been made in two of the Icelandic banks in trouble but made no mention of the deposits and likely loss in Glitnir Bank.

October 24, 2008