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Government to decide on fate of Icelandic charity deposits this week

Finance | Vibeka Mair | 17 Jun 2009

Charities fighting to recover deposits lost in the Icelandic banking crash will find out whether the government will compensate them on Friday.

The government has been urged to recompense all charities that lost money in Iceland by the Treasury Select Committee in a report on the banking crisis. The Treasury’s response to this and the Committee’s call for charities to have a separate depositor class will be released at the end of the week.

It is believed that around 99 UK charities lost £230m when Icelandic bank Kaupthing Singer and Friedlander (KSF) collapsed last October.

Few charities have publically admitted to being affected, however Cats Protection and Naomi House have led a campaign group called Save our Savings (SOS) representing 30 charities that lost £50m collectively and Christie’s charity has led its own public campaign to retrieve funds.

Call for consistent approach

Christie’s received good news last week, after NHS North West covered the £6.5m the charity lost in Iceland. It has now dropped plans to seek a judicial review. However, the funding injection has concerned the leader of SOS who has called for a consistent approach to all charities.

Dominic Sullivan,director of legal services for Cats Protection, said: “We are pleased to hear that The Christie, which was part of the SOS coalition, is to be fully compensated but feel very strongly that there should be a consistent approach to all the charities suffering from the collapse of Kaupthing, Singer and Friedlander.

Could set a precedent

“It does appear to set a precedent for dealing with charities and we hope the Treasury takes this into account when it publishes its response to the Treasury Select Committee’s unequivocal recommendation that all charities be compensated. The Treasury is due to respond at the end of next week.

“There have been numerous enquiries and reports on the Banking Crisis blaming failure of regulation and supervision and if the Treasury does not follow the Committee's recommendation the clear message will be that charities are regarded as acceptable collateral damage for failures of regulation and supervision.”

Louise Hadley, head of Christie's, said: "“We are very grateful to our strategic health authority for their support and delighted that they have been able to help. They have stepped in so that we can progress vital new developments for cancer patients. Our priority is and will always be to our patients and that’s where all our focus needs to be.

“It’s been a difficult and worrying time and we really feel for the other charities who are still waiting for the return of their funds. We hope that they receive their money as soon as possible, so that like us, they can get back to the day job without this terrible concern.”

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