The five councils across West Yorkshire have revealed their statements for the tax year ending March 2020. Across Bradford, Kirklees, Leeds, Wakefield and Calderdale the councils statement of accounts show that the councils wrote off a combined £37 million in debt.
The debts were written off after unpaid council tax and unpaid business rates were not collected after all avenues were explored in retrieving the money.
The biggest culprit for financial losses was Wakefield Council who in the financial year to March 2020 wrote off a total of £13.9million.
Wakefield was closely followed by Bradford, who wrote off £11 million, Calderdale with £6.79 million, Kirklees authority writing off £5.74 million and finally Leeds Council who wrote off £357,391
Council tax and business rates write-offs were outlined in several categories including cases where people could not be traced, or it was not viable to pursue them for payment.
Debts associated with council tax and business rates were mainly due to significant write-offs as a result of companies owning student properties going insolvent.
The financial reports indicate that the councils pursued collection of the debt through issuing reminders, summonses, obtaining liability orders through the Magistrates Court.
Its forecast that the financial reports in March 2021 across the West Yorkshire region will see a further increase in debt written off due to the ongoing coronavirus pandemic
The Asian Standard posed the question to the five councils in West Yorkshire as to why they are writing off such figures and what methods they are taking to try and reduce the figure.
Neil Warren, Chief Finance Officer at Wakefield Council said: “In 2019/20, Council Tax of £171.6m was due to be paid in our district and the Council wrote-off bad debt amounting to £0.3m, with the majority of this sum relating to prior year debts.
“In common with all local authorities we record a figure in our accounts for Council Tax debt, which has accumulated over a number of years, and that has the potential to become a ‘bad debt’ which means it may be written off at some stage in the future.
“The process of managing Council Tax debt is long term, and we continue to do everything that we can to recover unpaid amounts, in line with national procedures.
“Council Tax debt relating to years up to and including 2019/20 is £23m and the Council has set aside a provision of £13.9m in the event these debts become bad. In 2018/19 the figure was £12.6m – an increase of less than one percent of the annual Council Tax due.”
Bradford council responded stating: “The Council has set aside an amount in its accounts to insure against non-recovery of trade debtors (a bad debt provision of £11m), so as to ensure prudent budgeting. However, the Council continues to expect and seeks recovery of all amounts owing.
At any point in time, the Council has a financial position in which it is both owed payments from other parties and owes amounts to other parties. As the fourth largest Metropolitan District Council in the country, these financial positions are necessarily large, but this is normal and to be expected.”
Kirklees Council said: “The Council makes every attempt to collect debts and ‘writing them off’ doesn’t mean that we won’t still collect. If the situation surrounding the collectability of the debt changes, then the Council would ‘write the debts back on’ and would collect them.”
Kirklees Cllr John Taylor described the report of only £5.74million as “another good performance” adding, “We are not seeing a vast number of write-offs.”
Calderdale council response to our questions on debt write off with:
“We have established debt recovery procedures agreed with our auditors, and write-off is the last resort when all other recovery processes have been exhausted.”
Leeds City Council, who had the lowest write off debt said:
‘All organisations, public and private, have to account for debts that realistically cannot be recovered. On some occasions it is deemed necessary to write off debts, such as where the debtor has died, disappeared or companies have become insolvent. These decisions are not taken lightly and are made based on a case-by-case basis. If fresh evidence comes to light, we will always pursue.”
The current situation with the coronavirus pandemic has seen record unemployment figures and thousands of people across the region struggling. The hardship they face will be a bitter pill to swallow when their local authorities have written off millions in unpaid tax.
That money that has not been collected, could have gone to improve so many services across the region.
But the questions remain as to if that figure of £37 million will ever make its way into improving the lives of the people of West Yorkshire and with the West Yorkshire Mayoral elections coming up the scrutiny on budgets is no doubt going to be high.