It has been revealed that Durham is one of twelve UK universities that have assets frozen in Iceland’s troubled banks.

Durham has £2,500,000 invested in Heritable, a UK-based branch of Landsbanki, which has entered administration following the complete breakdown of the Icelandic banking system caused by the global credit crisis.

The government estimates that the total funds belonging to universities, police forces, charities and over 100 local councils now exceeds £1.165 billion, leaving many organisations in financial crisis as they are unable to withdraw funds from their accounts.

Chris Higgins, Vice-Chancellor of the University, is reassuring university suppliers, staff and students that the frozen funds will have no serious impact on the operations of the university.

Chris Higgins

“Staff and suppliers will continue to be paid as normal and there will be no impact on students. Endowment funds are unaffected. The fact we cannot currently access these funds will have no effect on our day-to-day operations.

“It is important to emphasise that the funds are not lost but simply frozen. We are working to secure the safe return of these funds.”

The £2.5 million in the frozen Icelandic account represents just 1.47% of the University’s annual expenditure, based upon the latest available figures.

Universities are free to make their own banking and investment decisions, however HEFCE is responsible for reviewing the financial health of higher education institutions that receive public funding.

In total around £77 million of university funds are currently deposited in Icelandic banks that have gone into administration. Oxford University has up to £30m frozen, the University of Cambridge has £11m, Manchester Metropolitan University £10m, and the Open University £6.5m.

In a parliamentary statement John Denham, The Secretary of State for Innovation, Universities and Skills, stated that:

John Denham MP

“HEFCE has concluded that no university is at risk as a result of its exposure to Icelandic banks. Certainly no university faces a level of exposure that would raise questions about its continuing solvency.

“Students, businesses, charities and others may deal with universities with exactly the same level of confidence as before.”

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