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Educational Institutions: Bank Services

Volume 481: debated on Monday 20 October 2008

To ask the Secretary of State for Innovation, Universities and Skills what estimate he has made of the financial exposure of further and higher education institutions in terms of deposits and investments in Icelandic banks and financial institutions. (227794)

I refer the hon. Member to the written statement, 'Universities - Deposits in Icelandic Banks', made by the Secretary of State for Innovation, Universities and Skills on 14 October. My right hon. Friend told the House that the Higher Education Funding Council for England had identified 12 universities which held deposits with Icelandic banks that have recently entered into administration. The total amount deposited was around £77 million. We will, of course, update the House if there are any significant changes to this figure.

Officials from HM Treasury are engaging with the affected universities and HEFCE about their concerns. However, it should be noted that 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.

The Learning and Skills Council has been in contact with further education colleges to ascertain deposit and investment exposure to Icelandic financial institutions.

Information received to date suggests that two further education colleges have some limited exposure but that there is no immediate impact on the solvency position of further education colleges. The LSC is continuing to keep the situation under review and keeping Ministers informed of the implications.