MILLIONS of pounds of Brent Council tax payers' money lost when the Icelandic banks collapsed in 2008 could be recovered.
The authority has announced this week that it is expecting to get back almost all of its £5m deposit, which was held by Icelandic bank Glitnir.
It has campaigned for almost three years to recover the money, and now the council, along with a number of other local authorities, has been recognised as having priority status over other creditors' repayment claims. The revelation comes after a recent ruling by the board which is winding up the financial administration of the failed Iceland bank.
Brent Council now expects to get back almost all of the £5m sum in early 2012. The decision by the board followed a landmark ruling by the Supreme Court of Iceland on October 28 this year on the test case of a county council which had deposited money with the bank.
Brent Council joined 145 local authorities and the Local Government Association to coordinate their legal action against the bank. The collaboration minimised legal costs which so far have been less than one per cent of the amount they expect to recover.
Councillor Muhammed Butt, Brent Council's Deputy Leader and Lead Member for Finance and Corporate Services, said:
"This is a tremendous result for Brent Council and Brent residents. We have worked tirelessly since 2008 to recover our Icelandic Bank deposits. The decision is also an enormous victory for local government and the collaborative approach which enabled us to put across strong legal arguments to secure this result. Had this decision gone against us, there would have been a £5 million hole in our accounts, which would have had serious negative consequences for Brent Council services and the residents we serve."
Brent Council also had a £10 million deposit with the failed Icelandic bank Heritable. To date, Brent Council has got back around £6.5 million and the administrator expects Brent to recover up to 90 per cent of the original deposit in the next two years.
