£60k of business debts written off

FINANCE chiefs look set to write off “irrecoverable” debts worth almost £60,000 from council accounts.

Senior officers at Hartlepool Borough Council say they make every effort to collect cash owed from business rates and invoices.

But once a firm goes bankrupt or into administration, the money can be difficult to claw back.

Options available to the council are limited to submitting a claim in insolvency proceedings.

Finance chiefs say that is rarely successful, so officers are proposing to write the debt out of the accounting system although it could be reinstated if a payment is later received.

Independent councillor Hilary Thompson, cabinet member responsible for performance, is set to meet next week to discuss the issue.

It is proposed to write off the accounts “irrecoverable” sundry debt invoices worth a total of £15,843.84.

It is also proposed to write off business rates debt to the value of £42,360, plus £889.50 costs.

Coun Thompson will consider two reports and council procedure means that any debt above £1,000 can only be written off with the permission of the portfolio holder.

John Morton, assistant chief finance officer, said: “Each year the council issues sundry debtor invoices to the value of £23m and typically over 97 per cent of debt is collected within three months.

“The council as part of business transformation has invested in new payment handling arrangements that are increasingly allowing payment to be taken by debit or credit card at the time of requesting services from the council over the internet or via Hartlepool Connect.

“These arrangements will reduce the need to raise and recover sundry debt invoices in future.”

The report adds that the debts have all been scrutinised by finance officers.

Business rate debts written off have no impact on Hartlepool council tax payers as it is currently collected on behalf of the Government.

Mr Morton added: “The council currently bills and collects on behalf of central Government for a national business rates pool about £27m of business rates each year.

“While every effort is made to collect these sums due for which the council is responsible for collecting, certain debts become irrecoverable, and this report seeks the portfolio holder’s agreement for their write-off.”

Some of the write-offs are debts relating to businesses that have gone into liquidation.

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.

The performance portfolio meeting is due to be held on Wednesday, January 18, at 10am, at the Civic Centre.