Debts totalling £5.74m written off by Kirklees Council

A “significant” amount was due to student property owners going bust.

Money lost in 2019-20 included unpaid council tax to the tune of £3,040,106, unpaid business rates totalling £1,289,880 and £509,825 owed to the council’s Housing Revenue Account (HRA).

The £5.74m amounted to 1.16% of overall debt raised and was less than in 2018-19.

Staff have cautioned that the impact of the worsening coronavirus epidemic will see a predicted rise in unrecoverable bad debts next year.

In presenting the annual write-off report to the council’s Corporate Governance and Audit Committee Steve Bird, the head of welfare and exchequer services, said the most recent figure continued the generally downward trend of the last few years.

He added: “However, due to the current climate of Covid-19 and the downturn in the economy we are not expecting that trend to continue in future years.”

Council tax and business rates write-offs were outlined in several categories including cases where people could not be traced or it was not viable to pursue them for payment.

Debts associated with council tax and business rates were mainly due to “significant write-offs” as a result of companies owning student properties going insolvent.

Almost £900,000 in council tax was lost due to people going bust. Other write-offs were made on compassionate grounds or because the individual concerned had died.

The largest amount owed to the HRA – £369,944 – was written off as being not viable to pursue.

The other highest areas of write-off were in the Finance, IT and Transactional Services (£291,139), Adult Social Care (£273,660), and Economy and Skills directorates (£189,690).

Much of the Finance directorate debt was related to housing benefit over-payments.

Coun John Taylor (Con, Kirkburton) described the report as “another good performance” adding, “We are not seeing a vast amount of write-offs.”

The council has a robust collection and recovery policy for council tax and business rates.

All accounts in arrears are pursued through issuing reminders, summonses, obtaining liability orders through the Magistrates Court, if needed, which allow the council to recover debts through using bailiffs, attachments to earnings or benefits, instigating insolvency proceedings, putting charging orders on the properties, or issuing committal to prison proceedings.

Mr Bird said Kirklees Neighbourhood Housing, the arms-length management organisation (ALMO) that runs the council’s properties, will take “all reasonable steps” to recover unpaid money.

Committee chair Coun Will Simpson (Lab, Denby Dale) said bad debt was not necessarily written off forever and that if a non-payer was identified efforts were made to claw money back.