Scottish council spreads its Icelandic losses

Scottish Borders Council is to fund its £1.021m losses in Icelandic banks over five years, by using a borrowing consent scheme launched by the Scottish Government.

This council must account for the losses in its 2010/11 accounts but can spread the cost over the next five years.

Scottish Borders had £10m deposited in Landsbanki and Heritable when collapsed in October 2008 and has faced uncertainty since then over how much if any of the money might be recovered.

But an April decision by the Icelandic courts held that UK councils were preferred creditors.

Heritable is in administration and paying regular dividends. Scottish Borders now anticipates recovery of 95% of the Landsbanki deposit and 85% of that with Heritable.

Neil Calvert, depute (Finance), said: “The offer of consent to borrow from Scottish Government together with the latest decision from the Icelandic court provides us with an opportunity to account for our losses and to minimise any negative impact on our services.”