Ipswich: £1.7m debt written off by Ipswich Borough Council as council tax bills and business rates left unpaid
- Credit: Archant
Debts of more than £1.7m have been written off by borough chiefs after they failed to claw back dodged council tax bills and business rates.
Campaigners have accused Ipswich Borough Council (IBC) of being “blasé” after it emerged bailiffs and debt collectors failed to trace £1,754,828 in 2012/13, a surge of 88% from the £932,229 written off in 2011/12.
Martin Cook, IBC portfolio holder for resources, rubbished claims the borough was not hunting down every penny, insisting 99% of all debt was recovered in the last financial year.
The decision to write off the debt was given the green light at a borough council Overview and Scrutiny Committee meeting on Thursday.
Documents showed £611,096 in uncollected council tax was written off, nearly double the previous year’s total of £372,291 and the highest amount for five years.
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And business rates arrears written off soared from £114,736 in 2011/12 to £837,574 in 2012/13 - more than the previous four years combined.
Eleanor McGrath, campaign manager of the TaxPayers’ Alliance, warned the council could “ill afford” to leave these debts uncollected.
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“Local residents will be astonished at just how blasé Ipswich Borough Council appears to have been about collecting the money it is owed,” she said.
“After a decade of council tax hikes and hefty business rates, it is no wonder some are having trouble paying their bills and it is important that the council differentiates between those struggling to pay and those who are simply refusing to pay what is due.
“Tough action should be taken to deal with those who refuse to pay, while support should be available for these people to make it easier to pay, such as allowing direct debit payments spread across 12 months of the year.”
However, Mr Cook said the £1.7m written off represented just 1% of the £170m the council successfully collected in 2012/13.
“And the 1% written off will still be chased afterwards. It has got to be seen in context,” he added. He pointed out the total of standard write-offs had risen by less than £35k in a year to £693,771 in 2012/13, while the total of bankruptcy and liquidation write-offs had spiralled from £272,453 to £1,061,057.
“We have no control over bankruptcy and liquidation,” Mr Cook added.
“When the financial crisis broke in 2008 the council was expecting that bad debt would increase as a result of the bankruptcy and liquidation, so we were surprised there has been a lag.
“But we cannot collect the debt and have to write it off. But we aim to collect the full amount and if you take out the bankruptcy and liquidation we collected 99.6% of all debts last year.”