Decision details

The report of the Head of Treasury Services was submitted, updating Members on the latest financial position in respect of the money deposited with the Icelandic banks and the implications that this has on the Council’s overall revenue budget.

The Head of Treasury Services informed Executive that the legal challenge regarding the refusal of the Winding-Up Board of Glitnir bank to grant preferential creditor status was continuing and the outcome was unlikely to be known for a further 12 months.  The Council was continuing to work with other interested parties to challenge the decision of Communities and Local Government not to allow capitalisation of potential losses.

Scrutiny Committee – Resources considered the report at its meeting of 24 March 2010 and the comments and support of Members were noted.

Councillor Martin attended the meeting and spoke on this item under Standing Order 44. He supported the measures proposed in the report to address the position.

Members endorsed the importance of maintaining the Council’s balances at a healthy level, particularly in view of the transition to Unitary status. They supported the measures proposed to address the position including the capitalisation of statutory redundancy payments.   They were pleased to note that a significant refund was likely to be received from HMRC in respect of VAT and that it was anticipated that further budget savings might be identified on the closure of accounts for last year. 

Noting the options available and for the reasons stated in the report, Executive recommended to Council that:-

(1)        the Council capitalises its statutory redundancy payments for 2009/10 and 2010/11; and

(2)        if a positive decision on capitalising the Icelandic impairment is not forthcoming then further measures to reduce the revenue budget outlined in the report be adopted.