Finance chiefs play down council’s £6m of bad debt

By Tony Earnshaw
Local Democracy Reporter

KIRKLEES Council wrote off almost £6m of bad debt during the financial year 2018-19 – but finance chiefs have advised it reflects only a tiny percentage of the authority’s revenue.

They have also warned those whose debt has been formally written off that it may still be pursued in future if new information comes to light. The largest write-offs were in council tax (£1,882,304), adult social care (£1,409,686), business rates (£910,652) and finance services (£811,250), which relates mainly to housing benefit overpayment recovery. The cumulative figure of £5.9m was slightly higher than the 2017-18 amount of £5.5m. But as a percentage of debt raised it was 1.2 per cent. In 2016-17, the percentage was higher at 1.4 per cent.

As the fifth-largest council in the country, Kirklees has 187,894 properties liable for council tax (realising £203m in 2018-19) and 16,003 properties for business rates (realising £107m).

The authority achieved a collection rate of 98.55 per cent in council tax and 98.5 per cent in business rates. Whilst council tax arrears increased to £17m, the percentage compared to the overall debit was approximately 0.08 per cent, due to a large increase in the annual debit raised. 

Overall collection of arrears is also rising year on year.

The Conservatives’ deputy leader Coun John Taylor said: “We are hitting a collection rate of 98.55 per cent. This is a good news story.”

James Anderson, senior finance manager for Kirklees Council, told a meeting of the Corporate Governance and Audit Committee that they did not give up on pursuing bad debts.

He commented: “Some debts may be written off if people have left the area or circumstances have changed but we can add them back on. It doesn’t necessarily mean that we have forgotten about it.

“We will endeavour to collect if at all possible. The story doesn’t necessarily stop there.”

Coun Kath Pinnock (Lib Dem, Cleckheaton) said: “We have to recognise that all large organisations in the public or private sector will have debts that they run on.

“Although the figure is large, that doesn’t mean to say that (debts) are not pursued for collection.”

She added: “The only negative comment – or encouragement – I can provide is that if Leeds and Wakefield can manage 0.5 per cent then maybe we do need to try a bit harder. It would be good to get it below one per cent.”

Coun Steve Hall (Lab, Heckmondwike) said Kirklees was performing “pretty well in today’s financial climate”.

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