Councillor in dark about £2m

Councillors found out that £2m of Newark and Sherwood taxpayers’ money was in an Icelandic bank’s frozen account via the media.

One district councillor, Mrs Maureen Dobson, said she had met people who asked her when she would be resigning, but she said she did not even know money had been invested with the bank, Glitnir, and that the account had been frozen.

Mrs Dobson said members should have been informed before the news broke so they could deal with the concerns of the electorate.

“I got into a bit of a panic,” she said.

The £2m is in a one-year fixed term account opened in January.

The bank was offering high rates of interest and at the time the deposit was made the bank had a strong credit rating.

In response to Mrs Dobson’s comments the leader of the council, Mr Tony Roberts, said he was made aware himself of the problem only on Thursday morning of last week — when the story began to break and it was too late to withdraw the money.

Mr Roberts said a full report on the situation would be with members by the end of this week.

He said a list of frequently asked questions, and their answers, would be sent out.

At a meeting of the council’s policy, overview and scrutiny committee on Monday, he said: “The one comforting thing is that the money is not lost. In fact, it never left the country.

“It is in the British branch of the bank and the account is frozen.

“I am 98% sure we haven’t lost our money.

“Hindsight is always 20/20 vision.

“More than 100 councils, charities, public bodies and some police authorities were embroiled and that is highly regrettable.

“Iceland tried to set itself up as a Switzerland, Bermuda, Jersey or Lichtenstein with great interest rates and what happened was meltdown.”

The Government has said that individuals with money in the bank will get it back but that does not apply to local councils.

The Local Government Association’s calls for that to be changed is supported by Newark and Sherwood District Council.

The money is part of the council’s reserves that come mainly from the sale of council houses and other capital receipts and are deposited with a range of financial institutions.