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Claims council may lose £29m dismissed

PUBLISHED: 12:28 24 March 2009 | UPDATED: 13:27 03 July 2010

COUNTY Hall leaders yesterday dismissed as speculation claims they might lose around £29m from the Icelandic banking collapse.

Norfolk County Council has £32.

COUNTY Hall leaders yesterday dismissed as speculation claims they might lose around £29m from the Icelandic banking collapse.

Norfolk County Council has £32.5m tied up in the three banks Glitinir, Kaupthing and Landsbank, while Breckland Council has £12m tied up and Yarmouth has £2m.

The county council, which is already expecting to lose £2.1m in lost interest payments, has since vowed to “bank British” in the aftermath of the banking collapse, which affected 116 authorities.

Lib Dem leader Paul Morse said recent reports suggested councils would be forced to write off 90pc of their investments in Iceland, around £29.25m for the county council.

“That would actually mean a 9.75pc increase in council tax, or £100 across Band D,” he said. “What are your planning assumptions for what we would get back from Iceland?”

He also aimed a political pot shot at the Tory-run authority, asking if it was planning to sue advisers Butlers, which is run by party treasurer Michael Spencer, over the issue.

Council deputy leader Harry Humphrey said it was impossible at this stage to say what would happen.

“The process of administration is ongoing and we can't really anticipate exactly what's going to go on,” he said. “There's no indication yet as to the extent of payment, but 90pc is speculation.”

Mr Humphrey said Butlers had provided a mix of both investment advice and information, but it was officers who made the final decisions, and there were no plans to take any action against the firm.

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