Council set to reclaim funds frozen in Iceland
PLYMOUTH is on course to be repaid more than £11million of the £13million invested in three collapsed Icelandic banks.
With the addition of an expected £1,673,000 in punitive interest rates, the council will actually recover about £400,000 more than it invested.
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The city council was one of the victims when Iceland's financial system seized up in October last year, leaving around £800 million of British local authority funds frozen.
The council is expecting to get back at least 83p in the pound of the £4million invested with Landsbanki, Cabinet members were told at their meeting yesterday.
A formal claim has been submitted to the Landsbanki creditors committee on behalf of the council, including interest up to April 22 this year, some of it at a penalty rate of 22 per cent.
The council hopes to get back all of the £6million, plus interest, invested with Glitnir, under an agreement reached in September. A formal claim is due to be lodged by the end of this month.
The UK-based Heritable bank had £3million of Plymouth's money. A first dividend of £508,448, equating to 16.3p in the pound plus interest, has been received. Another dividend is expected to be paid before the end of the year.
The repayments will come as a relief to the council, which is on course to overspend its 2009/10 budget by £2.3million, 1.2 per cent of the £196.525million revenue.
The city's financial position is improving: earlier this year the deficit forecast was more than £3.3 million.
An increase in the number of looked-after children is putting pressure on the council coffers.
The service is overspending by £958,000 as it is having to pay for five placements over budget.
The number of children in care has risen from 374 to 389 over the last year. The number who are subject to child protection plans has risen from 189 to 288.
The council has to pick up the tab for placements ordered by the court system.
Lower earnings from car parking have also hit the budget. Earlier this year income fell while the Theatre Royal car park was being refurbished.
Meanwhile, the council is changing the balance of its assets and debts to reduce the risks to the city.
By next March, it is aiming to reduce debt from £405million to £227million and cut investments from £213million to £73million.
Big capital projects have faced a squeeze this year, with the council unlikely to hit its initial target of £100.4million of spending.
By the end of September it had spent £35.7million, and now expects to achieve only £82.478million.
Three projects have been put on hold: the replacement for the council's headquarters at the Civic Centre; Parkside training centre; and a History Centre to house the city's archives.
Earlier this year the council announced that it was cutting 300 posts and making 200 staff redundant.
At the end of September redundancy payments totalling £588,000 had been paid, with another £362,000 in the pipeline.
The council has earmarked £1.133million for redundancies.
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by chaos, hells kitchen
Wednesday, November 11 2009, 11:37PM
“i wonder now the man in black has been proved far more honourable then our city council members will they return his frozen romanian accounts or is it a case of he saved your arses but you still cant be arsed to fight for one of your own local lads ..”
by Mick, Barbican
Wednesday, November 11 2009, 9:58PM
“I didn't know there were any banks in Iceland anyway, just eskimos, penguins and polar bears”
by David Mavin, Eggbuckland
Wednesday, November 11 2009, 9:20PM
“Hard earned money, placed beyond the reach of politicians for future generations but unfortunately not greedy bankers, a high risk strategy that I hope the present elected incumbents have learnt from.
If the report is accurate it seems that the city will have a profit from their investment but a return through luck, more than judgment.”
by VERY ANNOYED, badly run plymouth
Wednesday, November 11 2009, 7:47PM
“This city is a total disgrace. i am no longer proud to say i come from plymouth. We are surrounded by peodo's, violant thugs, druggies who get more benefits than those who really deserve it. The police are no where to be seen. The courts serve no purpose what so ever. Our local government are too busy trying to swindle as much as they can on expenses they seem to forget about us the people who pay there over the top wages. and yet these idiots aree also allowed to gamble our money in high risk banks off shore. Who on earth agrees to this. I did not even know there was that much money in plymouth. So i would like a share of MY interest. Oh yes i forgot we are actually getting back less than we should be. What a surprise. Are these people who make disastrous decisions the same people who designed our roads??? They are the worst. poor working class people stuck in traffic for hours on end. spend those millions we are getting back ripping out these so called traffic calming measures. They cause more accidents than them not being there!!!!!!!!!!!!!!!!!!!!!!!!
Thankyou for listening people.”
by Harpo, Plymouth
Wednesday, November 11 2009, 7:46PM
“Figures show income on Theatre Royal have reduced? The figures for TR car park must be horrendous, given that I had to park on level 9 or 10 most days this time last year. Now? Even levels 5 and 6 are half empty daily. Given that some other car parks are on the point of collaspe (anyone seen Mayflower West lately) parking income must be seriously short to the budget figures they give the cabinet !!!!”