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If the Iceland crisis is not affecting local services why was £858 million on deposit?

As news continues to seep out about the £858 million which UK local councils held on deposit with Icelandic banks, we are moving into a rather bizarre situation with regard to local council funding. If, as the vast majority of councils claim, the loss of this collective £858 million will not affect local services and future funding, why was it not used to reduce council tax bills?

It seems as though both the government and the local councils have shot themselves in the foot with claims that the loss of this money will have no material impact upon services. Quite how they can apparently write off the figure as irrelevant is a complete mystery but one which the councils are refusing to answer.

For years now we have seen councils pleading hard up each time the council tax renewal comes around with the good old tax payer always forced to foot the bill. Did they tell us about this £858 million on deposit? Did they look to reduce our bills? No, they continued to milk the UK tax payer for all they could at a time when money has never been tighter.

While some argue these are 'reserves' for a rainy day, for many tax payers in the UK it has been pouring down for months!

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