Decision Maker: Cabinet Member for Resources
Decision status: Recommendations Approved
Is Key decision?: Yes
Is subject to call in?: Yes
The Cabinet Member authorised the write off of the debt shown as outstanding in respect of non-domestic rates, council tax, housing benefit overpayments and accounts receivable (sundry debt) accounts included in the Appendix 1. This details the financial year and the category for the write off request.
In all cases included in this Cabinet Member Decision Notice the authorisation for write-off is requested due to one of the following scenarios:
· a company being placed into administration of liquidation;
· the ratepayer is an individual being made bankrupt;
· the ratepayer is deceased with no further income due from the estate; or
· following extensive enquiries being made it has not been possible to trace the debtor and therefore collect payment.
It should be noted that approximately £4.0m of the debt being written off is in relation to companies that have gone into administration/ individuals being made bankrupt. In all appropriate cases, proof of debt has been lodged with the Administrators or Liquidators and either it has been confirmed that no dividend is payable or a final dividend payment has been received. Recovery action has therefore been exhausted and there is no further action that can be taken to obtain any further payments in relation to the debt. Table 2 in Appendix 1 summarises the rationale for the different reasons for write off decisions by year and by value.
All of the aged debt outlined in Appendix 1 has been fully provided for in the council’s debt provisions in accordance with the council’s debt provision policies, local accounting procedures and statutory accounting regulations. As a result, there has been no adverse impact on the Council’s revenue position as a result of this write off exercise and no adverse financial impact as a result of not writing these debts off sooner. All debt recovery actions available to the council must be exhausted before outstanding debt can be recommended for write-off.
To further strengthen its debt collection procedures, the Council is currently reviewing all aspects of its accounts receivable processes to see whether any changes need to be made. This includes ensuring that all future debt write off exercises take place on a quarterly basis.
The alternative option is to not write off this debt but this would result in an uncollectable debt continuing to be shown as outstanding and a bad debt provision for this debt. Once a debt is no longer collectable it should be written off in the Council’s accounts and the debt provision adjusted accordingly.
All other alternative options available to the Council to collect the debt have already been undertaken before making a decision to recommend a debt for write off.
Appendix 1 - Debt Write-Offs With A Value Over £10,000
Appendix 2 - Debt Write-Offs With A Value Under £10,000
Publication date: 06/02/2018
Date of decision: 05/02/2018
Effective from: 10/02/2018