Major disgrace remains despite Iceland cash payback pledge

So judges in the Icelandic supreme court have delivered a ruling which means council taxpayers in the Borders will get back “almost all” of the money our feckless local government officials used as gambling chips in a decidedly dodgy bank.

And if you read last week’s article in the Southern Reporter (“SBC’s Icelandic misadventure takes a turn for the better”) you will have noticed that Councillor Neil Calvert hailed the court judgement as “a major victory”. I hardly think so.

Scottish Borders Council (SBC), along with dozens of other reckless UK local authorities, deposited tens of millions of pounds in Landsbanki and other Icelandic banks before 2008, when virtually the entire network of financial institutions in that country collapsed under the weight of massive debts they could not honour.

A damning report for the Icelandic Government revealed that Landsbanki had been lending huge sums of money to companies owned by the father and son who controlled the bank. So can we have details of the credit checks made on Landsbanki by our highly-paid council officials before they started transferring money collected from us to pay for local services?

SBC has already had to factor into its accounts the loss of more than £1million of our money, and does not expect to recover all of the rest of our missing cash until (perhaps) 2018. Then, of course, SBC will also have to pay its share of the Local Government Association’s legal costs in the lengthy Icelandic litigation. How much? Some major victory!

As far as I am aware, not one official in any of the councils who embarked on this speculative venture has been sacked or even disciplined. Many of our elected members were blissfully unaware our council tax payments were being invested offshore, and the Scottish Government is not interested in holding an inquiry to determine who should be held responsible.

John Swinney, the Scottish finance supremo, told me in a letter to my MSP that these were matters for local authorities alone.

They were, he said, independent of government, so it would not be appropriate for the executive to intervene. Their independent status did not seem to matter much when he recently tramped all over Edinburgh City Council and ordered a U-turn on the ill-fated trams project.

The judges in Reykjavik may have brought the curtain down on an unsavoury chapter in UK local government history. But the conduct of those councils gullible enough to risk other people’s money in unstable Icelandic banks remains a national and local disgrace.

Bill Chisholm