BREAKING NEWS- Exeter City Council has lost £5 million in Icelandic bank collapse
PUBLISHED: 14:34 09 October 2008 | UPDATED: 09:46 10 June 2010
THURSDAY, OCTOBER 9 - Exeter City Council has denied that services in Topsham will be affected despite losing £5 million of its reserves in the credit crunch.
EXETER City Council has denied that services in Topsham will be affected despite losing £5 million of its reserves in the credit crunch.
The council is one of 20 local authorities to have lost millions after the Icelandic banks Landsbanki and Glitnir collapsed this week.
The country's government seized control of the banks but has not guaranteed the city council's deposits will be safeguarded.
The council said its £28 million reserves are deposited in a number of financial institutions in order to spread the risk - it had £3 million invested in the Landsbanki bank and £2 million in Glitnir Bank.
Exeter City Council has reassured people that there is no short term risk to council services.
They are also supporting the Local Government Association, which represents over 400 councils in Britain, is persuading the British government to find a way of resolving this situation.
Council Chief Executive Philip Bostock, said: "We have followed government advice and best practice in the way we invest our funds and clearly many authorities across the country find themselves in the same financial situation."
The Local Government Association (LGA) is calling on the British government to fully protect the city council's deposits which has been estimated at £550 million.
Councillor Margaret Eaton, Chairman of the LGA, said: "In the short term, these councils are confident that they will have sufficient funds to tide them over for a considerable period of time.
"Whilst this may affect some councils financially, we do not expect it to have any impact on local services.