Local authority wipes more than £3 million in unpaid debt

East Renfrewshire Council will write-off millions of pounds in unpaid debts '“ just weeks after hiking council tax.

Wednesday, 18th April 2018, 1:10 pm
Updated Wednesday, 18th April 2018, 1:14 pm

Local authority bosses are preparing to accept the loss of £3.363m in historical community charge arrears, dating back more than 20 years.

A further £739,000 of ‘bad debt’, including unpaid council tax and housing benefit overpayments, will also be written-off.

The council has insisted that there is no chance of the debts ever being collected.

But pressure group, the Taxpayers’ Alliance, slammed the write-offs, which come just two weeks after councillors agreed plans to raise council tax by three per cent from April.

James Price, campaign manager at the Taxpayers’ Alliance, said: “The reality of ‘writing-off debt’ means that those taxpayers who do play by the rules will be forced to pay even more than they otherwise would because their council isn’t collecting what they should be.

“If people or businesses can’t afford to pay their tax bills, that suggests that their taxes are far too high and the council should adjust their spending accordingly.

“Those residents who have paid their taxes will be forgiven for being upset that East Renfrewshire Council is also increasing council tax again this year.”

The community charge debts date as far back as 1989. The former Strathclyde Regional Council had the responsibility of collecting the charge but when East Renfrewshire Council was formed in 1996 the arrears caseload was transferred over.

At the same time a £4.8m pot of ‘bad debt provision’ was also transferred over. As the debts are now in excess of 20 years they can no longer be pursued because they are over the legal time limit.

Despite that limitation, the council could still pursue the unpaid council tax debts, which total £198,040. The local authority could also take legal action to try and claim back £122,177 in housing benefits overpayments.

Councillors will be asked to draw a line under £233,567 worth of non-domestic rates and £185,230 of ‘sundry debt’.

Council chiefs have insisted that while legal action is still an option, the debts are irrecoverable.

An East Renfrewshire Council spokesman said: “Maximising the collection of all income streams is of paramount importance to the council. Some of these debts go back more than 20 years and despite our best efforts, they are now deemed irrecoverable or legislation prevents us undertaking further recovery. Only once all appropriate recovery steps have been taken, and there is still no prospect of the debt being collected, would a write-off be considered.”