Borough leaders fight for £5m

TOWN chiefs have today moved to allay fears over the potential loss of £5million in tax payers' money tied up in a troubled Icelandic bank.

TOWN chiefs have today moved to allay fears over the potential loss of £5million in tax payers' money tied up in a troubled Icelandic bank.

Ipswich Borough Council is working with government in a bid to get guarantees on the safety of the investment with Landsbanki and a UK subsidiary after the collapse of the Iceland's banking sector left councils and charities in Britain facing losses of up to £1 billion.

Leader of Ipswich Borough Council, Liz Harsant, described it as “a very serious situation” for both the authority and tax payers but moved to reassure people that council services will not be affected.

“We have got to have a certain amount of optimism that we can resolve this situation.

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“I'm not saying it will be easy but I would like to assure people in the meantime services are not going to be cut and invoices will still be paid in the normal way.

“As far as council tax is concerned, I cannot give an absolute guarantee this won't affect council tax but in my heart of hearts we will do our utmost to make sure we don't have to increase it as a result of this crisis.”

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The £5million of council cash invested in Iceland makes up around 12 per cent of the council's entire investment portfolio of around £40million.

Interest from the savings is used to keep council tax down and funds various projects.

Labour opponents of the Tory administration are calling for an urgent investigation into the circumstances surrounding the situation.

The group's finance spokesperson, Martin Cook said: “This is a huge amount of money for the council to lose, equivalent to £125 per band D property.

“Ipswich council tax payers need to be reassured that procedures were followed correctly and that everything possible is being done to eliminate the potential for similar losses in future."

Treasury officials were yesterday in Iceland for urgent talks.

The crisis sparked a furious war of words between London and Reykjavik, with Prime Minister Gordon Brown denouncing the "totally unacceptable" failure of the Icelandic authorities to guarantee UK depositors would get their money back.

Icelandic Prime Minister Geir Haarde in turn blamed Britain for the collapse of his country's third largest bank, Kaupthing, after the government used anti-terrorism laws to freeze Icelandic assets in the UK.

Are you concerned about the at-risk £5million? Write to Your Letters, Evening Star, 30 Lower Brook Street, Ipswich, IP4 1AN or e-mail

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