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Local councils could lose £700m of funding

As the local council funding saga moves on, it has been revealed that we have now reached a figure of £700 million and counting, with regard to funds held by public authorities with failed Icelandic banks. It has also been confirmed that everyone from local councils to polices forces to public transport companies had funds held with Icelandic banks, or branches thereof.

The various local councils are today holding a meeting to discuss their next move and have a discussion with the Treasury planned for this evening. However, it turns out that the Icelandic government looks set to cut adrift overseas savers with the array of banks which hit trouble instead promising to bailout Icelandic nationals. While the UK authorities have pledged to sue for the return of the funds it seems a lost cause as the banks in question were not authorities by the FSA.

The main concern of the government now must be the fact that tax payers may have to foot the bill even though they had no hand in the management of the funds in question. There is also a concern that any cuts in funding might lead to further industrial action among council workers.

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