No compensation for north hospice

Half the money invested in KSF may be paid back over the next four years

A service offering care to adults with incurable diseases expects to lose half of the £658,832 it had invested with a failed bank.

The Treasury has decided not to compensate charities - including the Highland Hospice - for funds lost in the collapse of Icelandic banks.

Hospice chief executive Maria MacGill said frontline services would not be affected.

However, some projects it planned to launch have been delayed.

The charity had funds held by KSF, a UK bank owned by the Icelandic bank Kaupthing.

Outreach team

Hopes of compensation were raised in April following a call from MPs for the UK Government to bail out charities which lost out when the Icelandic banking system collapsed.

Highland Hospice is the only service of its kind in the Highlands.

It provides a 10-bed in-patient unit in Inverness and a day hospice on the same site.

The bank's administrators have told the charity that 50% of the money it invested with KSF may be repaid over the next three to four years.

Ms MacGill said: "Frontline services and ongoing services at the hospice and developed across the Highlands are safe."

She added: "An outreach team which has been recruited is about to start work."

The Highland Hospice is not alone in losing funds.

Naomi House, a Hampshire children's hospice, had £5.7m invested with KSF.