£600,000 of council debt has been written off in Somerset
Following this quarter's reports, Sedgemoor District Council has writen off more than £600,000 in uncollected council tax, business rates and other related local debts from the past year.
The local authority regularly reports how much revenue it has collected or failed to collect from ratepayers and business, publishing its totals each quarter. It has attributed the high figure of uncollected rates to the fact that ‘the legal cost of pursuing the debt is higher than the debt itself’.
Uncollected rates
The total amount uncollected is equivalent to around 0.5% of the council’s sum collected revenue and was largely earmarked to fund front-line services.
The council signed off £217,183.51 of debt in the last three months of financial year 2017/18. The largest proportions of debt came from unpaid council tax and unpaid rent. This is in contrast to the money owed in the last three months of financial year 2016/17 (an amount of £116.103.16) which was largely down to unpaid council tax.
Interim revenues manager Donna Griffin noted, "We collect more than £139million each year, made up of £69.7million in council tax, £42.4million in business rates, £15.3million in rents and £12.5million of sundry debts."
"We take prompt and effective action where debts are unpaid, but it is inevitable that there will be an element of bad debt."
Why can council debts be written off?
In certain cases, local authorities cannot or will not attempt to recover debts. Individuals debts of £4,000 and upwards can only be written off upon approval from local authorities, while amounts lower than this can be written off by a delegated local officer.
Five reasons why debts may be written off:
The debtor can no longer be traced due to a lack of forwarding address.
The debtor is now deceased.
The cost of recovering the debt is higher than the debt itself.
The debtor is insolvent or bankrupt.
There is disputed evidence of the debtor having insufficient assets that can be satisfactorily explained to the local authority.
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