Landsbanki bank deposits paid back to councils

Two West Midlands councils have received the first payments of money owed to them after the collapse of the Icelandic bank Landsbanki.

Stoke-on-Trent City Council said it has received £1.5m of the £5m it is owed.

Wyre Forest District Council in Worcestershire has been paid over £930,000 of the £3m it had deposited with the failed bank.

The Local Government Association (LGA) has been co-ordinating a legal action on behalf of 80 councils owed money.

Cuts continue

Sarah Hill, from Stoke-on-Trent City Council said: "£1.5m is a lot of money but it isn't new money, it is money we were confident we would get back and is already committed."

She said the payment would not change the budget being considered by the Labour-controlled council later this week.

John Campion, leader of Wyre Forest District Council, said the payment was "fantastic news" for the council and the residents it serves.

The Conservative-controlled council is considering cuts of 7% in its budget for 2012-13 next week.

The LGA said it has received £100m, the first instalment of the £413 million in local authority funds held by Landsbanki when the bank collapsed in 2008.

It expects as much as 98% of the total to be recovered.

LGA Chairman, Sir Merrick Cockell, said: "We will continue to work with the bank's winding up board on behalf of our members to expedite the remaining payments."

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