Councils face up to losing £400,000 in debts

Hertsmere and St Albans councils have written off thousands of pounds in outstanding debt.

Hertsmere and St Albans councils have written off thousands of pounds in outstanding debt. - Credit: PA

Two councils in Hertfordshire have had to give up chasing almost £400,000 in debt this year, after admitting it was unlikely to ever be recovered.

Two local councils have reluctantly agreed to write-off significant debts including missed business rates and council tax payments.

The specific details of the payments were discussed in private reports, but Hertsmere Borough Council and St Albans District Council have confirmed the overall cost to each authority during meetings last week.

Both councils said writing off the debts would come from existing provision and reserves, and would not affect its budgets.

In Hertsmere, the Executive is required to approve any write-offs that are more than £5,000. In 2021-22, this amounted to £195,574 on top of £113,966 already written off by officers.

The borough council did note that there were other parties had interest in the debts, and the overall impact to the authority is £90,287. This is funded through an allocated reserve for Bad Debt Provision, and it does not have a direct impact on the council’s day-to-day budgets.

The total included £86,442 written off in business rates after businesses went into liquidation, £22,911 in council tax debts and £77,029 in housing benefits overpayments. There is also £10,625 in sundry debts, including rental income from the council’s assets, that have been written off.

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This figure is in addition to a total of £113,966 in individual amounts lower than £5,000, which could be written off by the head of finance and business services without the executive’s approval.

A report for councillors said: "[The council had] taken all reasonable steps to recover the debts detailed in this report and the possibility of recovery is now considered to be extremely remote. However, if circumstances change and the council becomes able to collect these debts, then they will be written back on.”

In St Albans, the district council’s policy committee is required to approve the write-off of any bad debts over £25,000, which amounted to £89,170.52

This includes £54,503.22 in unpaid rent charges in commercial property, with £34,667.30 in unpaid housing benefit overpayment. No further details are provided, but a report said the debts are considered “legally irrecoverable or now uncollectable.” These write-offs will be against existing bad debt provision, and there will not be a direct extra cost to the district council.