Peterborough City Council could write off £2.3m of debt including council tax arrears and housing overpayment

Peterborough City Council is looking at writing off more than £2million of debt including council tax arrears and housing benefit overpayment as it has “no prospect ” of recovering it. Councillors have been advised to authorise the wiping out £2,350,991 of “irrecoverable debt” following a report from the Budget Corporate Leadership Team.

Council documents state that “all debt recovery action available to the council must be exhausted before outstanding debt can be recommended for write-off”. It added that despite its “best endeavours, it is inevitable that a small percentage of debt will not be collected”.

The write-off will apply to debts from non-domestic business rates, council tax and housing benefit overpayments. Debt can only be written off if it meets certain conditions. These include if the individual/company concerned is being made insolvent/bankrupt, or, if recovery action is attempted but no longer enforceable under the Limitation Act 1980, or the ratepayer is deceased with no further income due from the estate.

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The amount being wiped is only a small portion owed and represents 0.07per cent of the total debt raised over the period. The report said: “The council expects to receive approximately £108m in non-domestic rates annually, £120m for council tax, and in excess of £90m of debt income.

“As a result of activity on this scale, the council recovers millions of pounds every year relating to previous years’ debt, sometimes dating back several years, due to persistent recovery activity. Despite our best endeavours, it is inevitable that a small percentage of debt will remain uncollected and will ultimately have to be written off.

“There are a number of reasons why this happens, with the most common being where a company has gone into liquidation, an individual has been made bankrupt, a debtor has died with no funds available within the estate, or where it has not been possible to trace a debtor. Writing off irrecoverable debt is a necessary management tool, standard practice and recommended as part of good financial management.”

With respect to “sundry debt” the document said 98pc relates to arrangements with the National Health Service (NHS)/ Clinical Commissioning Group (CCG) – which has now become the Integrated Care Board (ICB). It continued: “An agreement was reached with the ICB in respect of disputed debts totalling £7m over a 7-year period. £5.3m was resolved with balances allocated to debts following detailed discussions with the ICB (CCG), leaving £1.7m requiring write-off.

“The reasons for the remaining disputed debts are as follows: Joint Funding assessments between the council’s Adult Social Care service and health services not being properly completed and signed off correctly by the Authorising Officers of both parties; Incorrect record keeping on the council’s Framework (MOSAIC) system with records being entered prior to ratification by the ICB (and erroneous recharges resulting);

“The ICB changing the Continuing Healthcare Joint Funding Tool during the period 2018/2019 to 2019/2020 without advising the council, leading to recharges not being accepted by the ICB.” The document will go before a cabinet meeting on Monday, June 19, at 4pm. Members will vote on whether to approve the recommendations.

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