Kent Faces £1.5 million loss despite Iceland’s Unfreezing of Kent Cash

Lib Dem Kent Finance Spokesman Tim Prater has welcomed news that Kent county Council should now recover the large majority of money from its investments in Icelandic banks, but has pointed out that losses and costs over recovery of the funds will still have cost Kent CC around £1.5 million.

The Icelandic Courts ruled on 28 October that Kent County Coiuncil and other UK COuncils are "preferred creditors", and as such should shortly see the large majority of funds held in Icelandic banks Landsbanki and Glitnir when they crashed in 2008 starting to be paid back to Kent. A third bank - Heritable - has been making staged payments back to Kent for a year and is expected to pay back at least 85% of the total deposit of £18 million Kent County Council had with them.

Folkestone West County Councillor Tim Prater said:

"Getting the majority of the money back is welcome, and that's about the best news we could have expected from Iceland last week. Some outstanding work has been done by the Kent Finance Team who have worked with other councils to stop this crisis becoming a complete disaster.

"The real kicker though is despite this result, which I'm sure will be much trumpeted by Conservative Kent, the losses and costs of recovery are still likely be around £1.5 million in total, to say nothing of the lost interest on the total £50 million since 2008 until when we actually get the money back.

"Whatever Conservative Councillors try to say, it's clear that in 2008 a number of Kent's investment processes and advice were weak.

"When urgent notifications on the worsening position of banks went to an email box that was not then read until too late, then there is a serious problem.

"When you have paid financial advisers that later deny that they actually give advice, then you have a serious problem.

"If you can't learn and accept the lessons of the past, you are damned to repeat them.

"However, there has to be credit given to officers and members across Parties for their work since 2009 on looking at those processes and making changes and putting checks in place to ensure that the same mistakes are not made again.

"But those past failures have still cost Kent and its taxpayers around £1.5million. Given, for example, that Youth Centre funding across Kent is being cut by around £1 million a year next year, it's clear the impact that sort of money could have had on protecting frontline services."