Councils in Kent that invested millions of pounds in Iceland have received only a fraction of their money back one year on from the banking crisis that hit the country.

The full story is in this week's Kent Messenger, but here, KM political editor Paul Francis answers the key questions on what is happening with the Icelandic cash.

Question: Why is it taking so long for councils to get their money back?

The process of winding up any business is always lengthy. The delay is partly because it is still unclear whether councils will be treated as preferential creditors - meaning that they will be given priority when it comes to sharing out the banks’ remaining assets. Councils with investments with the Heritable Bank have been luckier because it was a UK-based subsidiary.

Question: When will councils get the money?

None will get all their money back in one go. More probable is that payments will be phased over several years, with some not being returned until 2012. Money from the Heritable Bank is likely to come back much more quickly, with another tranche due in December.

Question: Will councils have to write off any of the money?

Probably. It may not be not as much as first feared but some losses are inevitable. The Chartered Institute of Public Finance Accountancy (Cipfa) recently estimated councils will get 100 per cent of the money invested in Glitnir; 95 per cent from Landsbanki and about 80 per cent from Heritable. Question: Will councils have to cut services to make up for any losses?

Not at this stage. The Government has allowed to use accountancy rules to effectively delay any impact of Icelandic losses until next year. A more signficant factor may be that since the crisis, most councils have opted to invested their money with the Treasury. This may be a safer option, but the rate of interest is much lower, meaning councils have seen far poorer returns on investments.