Yahoo News The Lancashire area writing off eye-watering sums of overpaid benefits and unpaid council tax
Blackburn with Darwen Council has written off more than £2.5million of bad debts as irrecoverable. The figure is revealed in a report by the authority’s finance director Dean Langton to councillors.
It includes £1,263,614 in unpaid council tax, £456,817 in outstanding business rates, £52,158 in overpaid housing benefits and other debts amounting to £824,821. Mr Langton’s report says: “The amount for write off detailed in this report is £2,597,409.
“The total amount of write off is provided for under the council’s bad debt provision.” Conservative group leader Cllr Jon Slater said the scale of the write off was due to the ‘rank and sheer incompetence’ of the council’s Labour leadership.
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Cllr Mustafa Desai, leader of the authority’s main 4BwD opposition group said it was ‘immensely concerning’. Mr Langton’s report on the write off of irrecoverable debts under £50,000 dating back to 1995 reveals that there were 1,632 council tax debts of less than £10,000 written of totalling £606,161.10.
They included 649 worth £423,809.90 where the debtor has absconded or gone away, 86 where the householder has died, 124 bankruptcies, and two totalling £689.06 due to local authority error.
There were three debts of more than £10,000 totalling £34,222.19 – one of £10,730.44 due to insolvency, one of £12,870.78 where the householder was deceased and one of £10,620.97 deemed ‘irrecoverable’. There were 53 cases of business rate debts of less than £10,000 worth £134,239.62 and 19 of more than £10,000 worth £322,577.37 written off.
All were due to insolvency.
The ‘sundry debts’ for services provided by the council such as trade waste collection and adult social care charges included 1,155 of under £10,000 totalling £524,629.20 of which 39 followed deaths, three resulted from abscondments, nine followed bankruptcies, 1,033 totalling £249,382.35 were out of time or statute barred and 105, totalling £200,819.16. were deemed irrecoverable.
For the 16 such debts of more than £10,000 totalling £300,191.36 two followed deaths and two were out of time or statute barred. The remaining 12 – totalling £224,194.56 – were deemed irrecoverable.
Local authority errors were the cause of 20 housing benefit overpayments of £23,138.49 and one of £15,160.07 all of which had to be written off. Other such overpayments also written off were one of £4,770.00 due to bankruptcy, four totalling £1,498.20 due to exceptional circumstances, two totalling £3,119.71 owing to deaths, four totalling £260.51 where recovery options had been exhausted and two amounting to £4,210.64 where the debtor had ‘gone away.
Cllr Slater said: “This debt write off is a sign of Blackburn with Darwen Council’s Labour leadership’s rank and sheer incompetence. The amount of debt they are writing off is huge.
“This is one of the reasons they have to increase the council tax by the maximum every year.” Cllr Mustafa Desai, leader of the main opposition 4BwD group, said: “It is immensely concerning that in the current financial climate the council is having to write off this level of debt.
“Unpaid business rates in the over £10,000 bracket appears to be a significant contributor; I’m certain sustained efforts will have been made to recover the debts.
“Bankruptcy, insolvency, abscondment and deaths would continue to present significant challenges going forward. Debts arising from “local authority errors” although not hugely significant in the grand scheme would benefit from process reviews to ensure robust systems are implemented to minimise them.”
Mr Langton said: “Income collected by the council is crucial for us to deliver the range of services that people need and writing off debts is only ever a last resort. This sum of money refers to hundreds of individual debts, some of which date back to 1995.
“It is also worth pointing out that over that period of time, the council has successfully collected hundreds of millions of pounds. There has also been just close to £50,000 in previously written off debts recovered.
“We follow nationally recognised accounting guidance on this and our collection rates are comparable to councils similar to ours.”
