Cash-strapped Stoke-on-Trent City Council to write off £7.5m of unpaid taxes
MORE than £7.5 million in unpaid council tax and business rates will be written off.
Officers at Stoke-on-Trent City Council say they have no hope of recovering the debts – some of which date back to 1993 – and plan to wipe them from the authority's accounts.
It will reduce the £25 million in unpaid taxes and fees the council is still trying to get back.
The authority blamed the debt mountain on the reluctance of previous regimes to take unpopular decisions to write off money they failed to collect.
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But the move has already been criticised by residents as the council makes citywide cuts of £24 million.
A total of more than £2.3 million now set to be written off is owed by businesses and residents with debts of more than £25,000.
Debts set to be wiped out include:
More than £4,126,852 in business rate debts – many registered to companies which are now bankrupt or liquidated;
Unpaid council tax totalling more than £1 million;
So-called 'sundry debts' for things like room hire, market rent licensing fees totalling £1,734,822.
The council said debts being written off had been pursued by officers and returned as unrecoverable by external debt collection agencies and bailiffs.
It is talking to 13 debt collection firms who are bidding for the chance to reclaim £5 million in unpaid tax.
Cabinet members will approve the measures next week.
Peter Bates, the city council's assistant director of finance, said: "Our collection rate is now very good compared to authorities up and down the country. We're not perfect but we are performing well in the current climate.
"What we have been very poor at doing over the years is taking the brave decision to write unrecoverable debt out of the books of the city council.
"Politically, I've been given clear direction that I must take every single action available to me as an officer to reclaim or collect debt that is due to the council. Only when we've exhausted every avenue will we write it off."
Paul Shotton, below, the authority's deputy leader and cabinet member for finance, said: "It is being totally unrealistic to think we could get 100 per cent of outstanding debts paid.
"I'm happy with collection rates and they are improving. But unfortunately we're in a position where we've got to be responsible and say there is a number of outstanding debts we don't stand any chance of recovering. In some cases the person has died.
"We've taken every measure possible to try to recover this money.
"I've gone through every single significant debt and challenged them with officers to make sure we haven't missed something we could recover."
Jim Gibson, chairman of Chell Heath Residents' Association, said: "It's a massive kick in the face for those people who have lost their jobs and could still lose their jobs.
"What a big difference this money could have made with so many cuts.
"It should have been dealt with many moons ago and never have been allowed to get to this big amount."
Retired resident Margaret McDonald, aged 68, from Tunstall, added: "It just isn't fair on people who have paid taxes all their lives."
Comments
by r_u_shore
Saturday, September 29 2012, 5:44PM
“Well, I should think Regina v. Brentford Justices case law and this would be a good argument for a violation of due-process:
http://tinyurl.com/9y3tfby
"THE COURT AND ITS STAFF SHOULD NOT GIVE THE IMPRESSION THAT THE COUNCIL IS IN CHARGE OF THE PROCESS"
P.S. Thanks for the link Mrs_biggles http://tinyurl.com/cs8lnds”
by pay_up
Saturday, September 29 2012, 5:23PM
“A nice little earner it seems Mrs Biggles....
However, given that the number of these summonses run into thousands at any given hearing, I'd say it was more than reasonable to suspect very serious instances of maladministration.
This interesting case law would suggest so anyway:
Regina v. Brentford Justices, Ex parte Catlin [1975]
"....It must however be remembered that before a summons or warrant is issued the information must be laid before a magistrate and he must go through the judicial exercise of deciding whether a summons or warrant ought to be issued or not. If a magistrate authorises the issue of a summons without having applied his mind to the information then he is guilty of dereliction of duty and if in any particular justices' clerk's office a practice goes on of summonses being issued without information being laid before the magistrate at all, then a very serious instance of maladministration arises which should have the attention of the authorities without delay...."
"A decision by magistrates whether to issue a summons pursuant to information laid involves the exercise of a judicial function, and is not merely administrative."”
by Mrs_biggles
Saturday, September 29 2012, 5:10PM
“truestokie,
Before you go banding about terms like "you moron", you might want to consider the revenue councils bring in because of defaulters, particularly late payers.
First of all bailiffs cost councils nothing, and secondly (the biggest attraction for local authorities) is the revenue due to late payers incurring court costs.
Take Cheshire East Council as an example:
http://tinyurl.com/6qkmqsw
The amount Cheshire East Council charge for issuing each summons is £50.
So, for just one Magistrates' court hearing from November last year (typically held each month)that's 2,300 x £50 = £115,000.
Let's say the council obtains liability orders for around one third of these (£40 liability order costs). That's another £30,663.
Total £145,663
They pay £3 per application to the Magistrates' court.
That's a total £138,763 profit going to Cheshire East Council, while £6,900 will be pocketed by the HMCTS for a signatures of the Clerk to the Justices.
Let's say this happens around 10 times a year.
Cheshire East Council – £1.4 million
HMCTS – £69,000
http://tinyurl.com/cs8lnds”
by WilliamJRead
Sunday, September 23 2012, 9:45PM
“The City Council should considering publishing the details of the largest defaulters, which will be businesses. It may well be that when the list is published in the Sentinel, readers may be able to identify businesses which defaulted, but which have since reopened/relocated elsewhere, and which are perfectly capable of clearing their debts.”
by truestokie
Thursday, September 20 2012, 9:10PM
“Valeplace, spot on.”
by truestokie
Thursday, September 20 2012, 9:09PM
“By the way Terry do you contribute to society?
"What you don't know"?
But Hey don't let the facts get in the way
"bit of an hypocrite aren't you.
Although it is none of your business, yes I do work and yes I pay full poll tax for you bunch of Pervez and Hackney puppets.
I unlike you have no master to serve.”
by kitcrew
Thursday, September 20 2012, 4:35PM
“Why can't they sell the debt on to bailiffs”
by Valeplace
Thursday, September 20 2012, 4:11PM
“You can't get blood out of a stone but,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,which idiot would give a "stone" money in the first place??????????????????????”
by mole10
Thursday, September 20 2012, 3:29PM
“I don't expect you to understand anything that you are talking about, but here goes lesson 1.
1. I have never been a councillor and is much to your amusement.
2. 100 years of Labour rule and you heap the entire blame on 2011.
3. Absolutely amazing to read.”
by LabourLen
Thursday, September 20 2012, 1:47PM
“@mole10 - Shut your nonsense! Labour have been in power in the past and guess what you were a part of their decision making group! So, oh grand one, what did you do in your time to tackle the issue of historical debt?
May I remind you that until 2011, Labour have always been in total power at the civic for years. The previous 3 administrations were coalitions. The City Independents/Conservatives were in charge for a term - what did they do to tackle the issue?
A Lib Dem member (Kieran Clarke) was cabinet member for finance for ages before they were booted out of the chamber. He known known to be against the writing off of this debt because he was worried about the public reaction.
I applaud my party for biting the bullet and taking the responsibility even though they knew idiots like Elsby/Cope would try to spin it.
@truestokie, for you information, the current collection rate stands at 98% which is way better than at any time in the past and is up there with the best in the country. But Hey don't let the facts get in the way of a far-right rant.
By the way Terry do you contribute to society? Or do you and your useless idle mate from Chell Heath sit there all day spouting far right bile all day at our expense?
And then you have the audacity to criticise those who are putting a shift in......”