Pub absconder among reasons as South Tyneside Council writes-off £100,000 in 'irrecoverable debts'
South Tyneside Council bosses have agreed to write off “irrecoverable debts” worth nearly £100,000.
The local authority regularly reviews debt levels, with cabinet approval required to write off any individual debt above £5,000.
This week, a new report was presented to council chiefs setting out debts where “no further effective recovery can be taken at this present time.”
Unpaid debts related to business rates from companies/ individuals and outstanding fees for care services.
Councillor Joanne Bell, cabinet member for resources and innovation, introduced the report at a cabinet meeting on Wednesday, October 6.
She explained the policy and gave a summary of the situation at the meeting.
“The proposed write-offs reflect those debts exceeding £5,000 where further recovery action is not possible,” she said.
“Failure to write-off debts where no effective recovery action can be taken, will mean that the council does not reflect a reasonable view of the recoverable debts within its accounts.
“The constitution states that any sum exceeding £5,000 which is considered to be irrecoverable, can only be written off with the authority of the cabinet.
“The cost of writing-off debt is met from the provision for bad debt set aside on the council’s balance sheet.”
According to a report prepared for councillors, there were three cases in South Shields with a combined total of £70,115.81 owed in unpaid business rates.
In one case, £25,108 was left outstanding when a ratepayer linked to a pub “ceased trading and absconded” with High Court enforcement officers “unable to confirm the whereabouts of the debtor.”
A further case was linked to another licensed premises, with a company ceasing trade and being liquidated leaving a debt of £39,877.48.
Another case saw around £5,130.33 linked to a liability dispute, where it was confirmed the lease was in individual names, rather than that of a registered company.
However, a council report states that “attempts to trace the debtor have proved unsuccessful.”
Around £23,265.58 was also listed for ‘sundry debts’ linked to outstanding costs for care services.
The figure applied to three separate cases where balances were outstanding following the death of individuals – with debts of £11,690.21, £5,426.08 and £6,149.29.
In total, the unpaid business rates and sundry debts written off by South Tyneside Council’s cabinet were around £93,381.
During this week’s cabinet meeting, councillor Jim Foreman, cabinet member for housing and transport, raised concerns about some business rate debts being “irretrievable.”
“I would hate to think that we’re going to get these people back into the business world in South Tyneside and whether they’re going to do the same things,” he said.
Cllr Bell responded to the point. She said the council had “exhausted every avenue possible and every avenue available” and that continuing recovery efforts would “just add extra costs to our resources.”
A report prepared for cabinet confirmed “future action may be taken to recover these debts dependent upon receipt of new information or a change of circumstances.”
It added that other “legal avenues” are being explored to “maximise future debt recovery.”