Services 'unaffected' by collapse of Icelandic banks

PUBLISHED: 16:23 16 October 2008 | UPDATED: 09:48 10 June 2010

EXETER City Council has denied that services in Topsham will be affected, despite the risk of losing £5 million of its reserves in the Icelandic banking crisis. The council is one of around 100 local authorities to have lost millions after the Icelandic b

EXETER City Council has denied that services in Topsham will be affected, despite the risk of losing £5 million of its reserves in the Icelandic banking crisis.The council is one of around 100 local authorities to have lost millions after the Icelandic banks Landsbanki and Glitnir collapsed last 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 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 (LGA), which represents more than 400 councils in Britain, in its efforts to persuade the British government to find a way of resolving the situation.It was due to meet with ministers on Wednesday to discuss the 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."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.

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