Cost cutting council writes off £80k debt sum after approval from cabinet members

Cash strapped Redcar and Cleveland Council has written off more than £80,000 worth of debt.

The debt write-offs, which total £86,834, required approval from its cabinet because of the sums involved, which was given at a recent meeting. Six debts related to adult social care, either in the shape of residential care or care and support provided in the community, a financial update report revealed.

In each instance the person receiving the care had passed away without the debt being settled. In most cases they also had no savings, assets or property to be drawn upon with the council stating it had exhausted all options to pursue the debts.

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The total sum also included £10,893 owed in business rates by a company, Skerne Leisure Management, relating to the Lord Elgin bar in Redcar High Street. The report said the company had not paid the balance in business rates owed since the end of the 2019/20 financial year.

It said the debt had started to accumulate that year when covid-19 restrictions prevented pubs from being open to members of the public, although rates relief provided by the Government to retailers during the pandemic had subsequently been given. The council had obtained liability orders for the debt through the courts, but it had remained unpaid and the company was dissolved in December last year.

The report said: “Business rate debts that exist in respect of insolvent companies are considered to be irrecoverable and need to be written off in accordance with Government guidance in terms of the administration of business rates debts.”

The same report revealed that the council was predicted to have achieved 90% of planned so-called ‘driving change’ efficiency savings in the 2023/24 financial year, some £5.7m. It said savings worth £411,000 were in progress with £267,000 outstanding, adding: “The residual outstanding driving change savings relate to the timing of planned redesign of library services, the low take-up for voluntary unpaid leave and identifying external funding contributions for the costs of Christmas decorations.”

The council has committed to making a further £2.4m of driving change savings in 2024/25 to address the “very significant” financial challenges it is facing.

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