Somerset County Council to get Icelandic bank cash back

Somerset County Council says it expects to get back the bulk of the £25m it invested in Icelandic banks following a victory in Iceland's Supreme Court.

It had deposited the money in two of the banks which collapsed in 2008.

The court ruled last week that UK councils with money in Landsbanki and Glitnir banks were to be given priority creditor status.

The Conservative-controlled council said it hoped to get 100% from Glitnir and 98% back from Landsbanki.

'Huge loss'

Under Icelandic law, preferred creditors should receive a full payout before any other creditors are paid.

David Huxtable, who is a cabinet member for resources, said: "We were expecting to have to write off between two and 12 million pounds - now we expect that to be about £2.5m.

"That's still a huge loss for the people of Somerset."

Asked if it would mean whether some of the recent cutbacks would be reversed Mr Huxtable said the cash would mean there would be no new spending.

"Just slightly less savings going forward," he added.

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