Keeping cool over bank’s £2m

Newark and Sherwood District Council has £2m invested in an Icelandic bank, but says it is safe at the moment.

The money is in a one-year fixed term account with the bank, Glitnir. The account was opened in January.

The council’s chief executive, Mr Andrew Muter, said that at the time of the investment the bank had a strong credit rating.

He said: “We would like to reiterate that no money has been lost at this moment, and the crisis will not impact on council tax levels.”

There are concerns that more than 20 councils in England and Wales that have money deposited with another Icelandic bank, Landsbanki, which collapsed this week, could lose their money.

The Government has said that individuals who had money in the bank will get it back but that does not apply to local councils.

The Local Government Association’s call for that to be changed is being backed by Newark and Sherwood District Council.

The council’s head of finance and information systems, Mr David Dickinson, said that all its investments were deposited according to the Chartered Institute of Public Finance and Accountancy’s code of practice.

The money is part of the council’s reserves which come from the sale of council houses and other capital receipts and is deposited with a range of financial institutions.