'Little risk' over Iceland assets

Councils across the UK had funds invested in Icelandic banks

A Surrey council has said it will carry on with "business as usual" in the short term, despite having �15m frozen in collapsed Icelandic banks.

It follows an assessment of Reigate and Banstead Borough Council's finances by the government's Rapid Action Team.

The council called the team in after Glitnir and Landsbanki collapsed in October, leaving local authorities all over the UK out of pocket.

It concluded there was little risk of cashflow problems in the short term.

A report by the Rapid Action Team concludes: "[The council] has sufficient revenue balances to manage its budget this year and, together with appropriate management action, should be able to balance its revenue budget for 2009/2010."

Impact on services

To help balance the books, the council has been told it can immediately reduce the amount it passes to the government from business rates it collects in the borough.

Normally, the council estimates the amount due and claims back overpayment at the end of the year.

But the council said that if it did not recover the �15.5m there may be an impact on services, jobs or council tax in the longer term.

And the authority called on the government to help it retrieve its investments.

"That money belongs to our residents and we want it back," said Councillor Joan Spiers.

"By requesting a visit by the Rapid Action Team we have started a dialogue with the government which has put us in a much better position to negotiate getting our money back."

Gordon Brown has said he will do "everything in his power" to see local authorities' money is returned.