District council writes off �185,000 of bad debt which will hit the ‘public purse’
TAXPAYERS will be hit in the pocket after Uttlesford District Council was this week forced to write-off over �185,000 of bad debt owed to it.
At a meeting of the finance and administration committee, members agreed to follow officers’ advice to waiver “irrecoverable debts” in excess of �5000.
Officers said that “adequate provision for bad debts already exists and there are no budgetary implications”.
Yet the write off of business rates is a charge of almost �170,000 against the debt provision, the cost of which is met by the Collection Fund and affects the amount paid over to the National Non Domestic Rates Pool. Essentially, this affects the total amount of funding available to local government – an indirect future loss to UDC.
A council spokesman said: “Like other councils, Uttlesford makes financial provision for bad debts. This is because write-offs are not put forward until officers are certain that the amounts owed cannot be collected.
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“Amounts owed that are not collected ultimately fall on the public purse.”
The debts have been mounting since 2003. One company in Little Chesterford owed the council �55,000 before going into liquidation in 2003 while another in Stansted owed over �26,000.
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Other debts written off included almost �6000 in outstanding Council Tax payments and over �10,000 sundry debts, met from the council’s general fund budget.
In their recommendations officer’s said that “there is no prospect of recovering the amounts due”.
“This sort of report is standard procedure as debt is written off when it is considered irrecoverable,” added the spokesman.
“Write offs only occur when all other recovery action has been exhausted. Recovery action would typically involve sending reminders, making telephone calls, going to court and sending in the bailiffs.”
He added: “The council is of course concerned when local businesses and residents find it difficult to pay their rates or council tax. Anyone who unfortunately finds themselves in such circumstances should contact the council as early as possible so that every reasonable effort can be made to help them.
“It may be of interest to note that the overall collection rates for business rates and council tax are higher than this time last year.”
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