South Tyneside Council writes off £60,000 in debts - and warns pandemic could push figure even higher

Town hall chiefs have had to write off debts worth more than £60,000 – and warned the impact of coronavirus could see that figure rise even higher.

Tuesday, 18th August 2020, 6:00 am
Updated Tuesday, 18th August 2020, 10:32 am

A combination of debtors dying while still owing money and companies collapsing into insolvency is to blame for bosses at South Tyneside Council finding themselves short.

But they insist only a small fraction of cash owed is ever considered irrecoverable.

“Despite collecting over 98p in every pound, regrettably there are some debts we are unable to collect,” said Ed Malcolm, cabinet member for Resources and Innovation.

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South Shields town hall

“The council continues to apply all available legal methods to recover debt.

“However, there are circumstances beyond our control where further pursuit of debtors would not be viable.

“For example, where a business has fallen into liquidation, or where a debtor is deceased and there is no estate.

“Due to the very challenging economic circumstances arising from the COVID-19 pandemic, the level of irrecoverable debts will increase in the coming months.”

Cllr Malcolm was speaking at a meeting of the council’s ruling cabinet, which was held by videolink and broadcast via YouTube.

Council rules state any debt worth more than £5,000 must have the cabinet’s approval to be written off.

According to a report for councillors, four properties in South Shields owe a combined total of £33,608.92 in unpaid business rates, with all options to claw the cash back now ‘exhausted’.

One of these was a nightspot, which ceased trading with debts worth almost £8,000.

A further £15,964.36 was left outstanding by two people who died after receiving residential care.

And, in a final case, more than £43,000 was still owed when one person died after receiving ‘homecare support’ for almost two years.

Following negotiations due to the ‘complexity of the case’ a settlement was proposed in which £13,750 of this would be written off, with the rest to be repaid.

However, if a final deal cannot be agreed council chiefs have said the total £43,750.00 will be ‘pursued through the courts’.

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