South Tyneside spending chiefs agree to write-off ‘irrecoverable’ debts worth more than £75,000
Local authority bosses in the borough regularly reviews debt levels, with cabinet approval required to write off anything worth more than £5,000 considered unlikely to be repaid.
The latest batch of debts were related to unpaid business rates and outstanding fees for care services where “no further effective recovery can be taken at this present time”.
According to a report prepared for spending chiefs, at least two cases were recorded in South Shields of unpaid business rates where companies owed a combined total of £22,883.52.
Cllr Joanne Bell, cabinet member for Resources and Innovation, said the paper set out debts “that we consider that it would be uneconomical to pursue further at this present time”.
She added: “The council issues bills for over £30 million per year for business rates and over £11 million in respect of personal contributions towards the cost of adult social care.
“Despite collecting the vast majority of monies owed, regrettably there are some debts which we’re unable to collect.
“The council continues to apply all available legal methods to recover debt, unfortunately current laws restrict our scope to pursue the landlords of commercial properties where there is a tenant in occupation.
“There are circumstances beyond our control where further pursuit of debtors would not be viable, for example where a business has fallen into liquidation.
“Whilst all these debts can be written off within our accounts, further recovery will be undertaken where new circumstances arise.”
In one case, £15,118.33 was left outstanding when a company linked to a pub stopped trading.
Another was linked to the company behind a South Shields nightspot which was dissolved owing £7,765.19.
‘Sundry debts’ linked to outstanding care and accommodation costs also accounted for £53,013.57, with many cases involving balances left outstanding following the death of individuals.
The combined total of both business rate debts and sundry debts in the latest round of write-offs was £75,897.09.
A report prepared for councillors confirmed the cost of writing off debt is “met from the provision for bad debt set aside on the council’s balance sheet”.
It added “future action may be taken to recover these debts dependent upon receipt of new information or a change of circumstances”.