Debts written off by council

Councillor Hilary Thompson
Councillor Hilary Thompson
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IRRECOVERABLE debts worth almost £60,000 owed to a council have been “reluctantly” written off.

Finance officers at Hartlepool Borough Council will write-off sundry debt invoices worth £15,843.84 and business rates debt to the value of £42,360, along with £889.50 costs

Independent councillor Hilary Thompson, portfolio holder for performance, said it was “unfortunate” but agreed to wipe off the debts at a recent meeting,

The Elwick representative stressed that any money written off has an impact on the budget, which can affect jobs and services.

Coun Thompson said: “It is unfortunate that I have to reluctantly agree to this.

“I hope that it is clear to all debtors, in these austere times, what these debts can mean to the council.

“It may not seem a lot, but it would certainly help towards the council’s budget.”

The council has to slash £15m from its £90m budget over the next three years.

Assistant chief finance officer John Morton said the local authority makes every effort to collect cash owed from business rates and invoices.

But once a firm goes bankrupt, into administration or liquidation, the money can be difficult to claw back with options limited to submitting a claim in insolvency proceedings.

That is rarely successful, so officers wanted permission to write the debt out of the accounting system.

It can, however, be reinstated if a payment is later received.

The council also traces absconders using a national database and utility companies in case people register at an address outside of Hartlepool.

Each year the council issues sundry debtor invoices to the value of £23m, and figures show more than 97 per cent of debt is collected within three months.

Meanwhile, the council currently bills and collects on behalf of central Government for a national business rates pool about £27m of business rates each year.

In 2010-11 out of 326 councils, Hartlepool was among the top performing 25 per cent in terms of amount collected.

Mr Morton said: “The £42,000 is not a lot in the context of the £27m that we collect each year.

“There are very sound reasons for each debt written out.”

He added in future it will be even more important to collect as much business rate as possible as authorities are set to be handed back control.

Under the changes councils would keep all the business rates they collect.

Currently they are paid into a central pool and redistributed in grants by the Treasury.

Coun Thompson added: “I note the excellent track record for debt recovery.

“We fare much better than most other local authorities.”

Those debts accrued from businesses in administration are not written out of the system immediately, as the council is required to seek payment from the administrators.

Mr Morton added that more and more people were paying invoices by debit or credit card which he hoped would reduce the amount written-off in future.

Council procedure means any debt above £1,000 can only be written off with the permission of the portfolio holder.

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