Iceland woe costs £1.5 million (From Braintree and Witham Times)

Iceland woe costs £1.5 million

10:50am Saturday 6th February 2010

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Braintree Council is more than £1.5 million out of pocket due to the collapse of three Icelandic banks.

On Monday night it was confirmed that the Government will not grant Braintree Council permission to write off £1.585 million as a capital loss.

It means the money will have to be found from the authority’s balances to avoid council taxes being raised.

Trevor Wilson, Head of Finance at the council, said he hopes the council’s balances will cover the loss but he said the figure could change.

“It’s a difficult situation,” he said. “In another few days we might know a bit more about the winding up of the banks and the figures could all change.”

Braintree council had £5 million tied up in the three troubled Icelandic banks.

Landsbanki is expected to return £2.49 million out of £3 million the council had invested, plus another £270,000 in interest and costs.

Glitnir bank is likely to return £250,000 from a £1 million deposit, plus £19,000 for interest and costs and Kaupthing Singer and Friedlander has already repaid £300,000 of a £1 million investment, plus £8,600 of interest.

Graham Butland, Council Leader, said the fact the Government had refused permission for Braintree Council to claim the £1.585 million as a capital loss was a backhanded compliment to the way the authority’s finances are handled.

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