Salford Council have written off £860,000 of debts – after clawing back less than 1%.
The ‘irrecoverable debts’, relating to council tax, business rates, benefit overpayments and tenant arrears, were shelved in a low-key council meeting Tuesday afternoon.
Assistant City Mayor for Finance and Support Services, councillor Bill Hinds, wrote off the historic debts alongside Assistant City Mayor for Technology, councillor John Mullen.
Karen Garrido, Conservative councillor for Worsley, told MM: “The thing about this is that this has been going on for ages and ages and we’ve just been writing debts off.
“I don’t think it’s good enough.
“I mean, we’re told that they try very hard to get this debt, but we need to make sure that this is actually happening, because it seems a lot of money to be writing off when we’re very stretched for money.”
But councillor Hinds, Salford City Council’s Assistant Mayor for Finance and Support Services, defended the approach.
He said: “We do all we can legally to peruse the debts but in some circumstances it is not possible or financially viable to pursue the debt – if somebody has died, or left the country, for example.
“The decision to write off a debt is only ever taken as a last resort when all of our investigations have been exhausted or where it would no longer be cost effective for the council to peruse the case.
“This is good accounting practice across all organisations and the Audit Commission’s Use of Resources Score highlights that we manage our resources well.”
Limited information is known about the breakdown of the debts – as an exemption has been applied by the council preventing disclosure to the public – but itemisation into four categories has been supplied to MM.
The council were able to claw back some of the money owed to them, council tax debts amounting to £5512,71 and business rates debts totalling £1831,84.
But combined, these only equal less than 0.8% of the overall written-off arrears.
|
Council tax |
£208,745,14 |
|
Business rates |
£512,983,64 |
|
Benefit overpayment |
£35,166,34 |
|
Salix Homes tenant arrears |
£103,276,00 |
|
Total |
£860,171,12 |
The report says that due to ‘bad debt provisions, the liabilities mentioned in the report for write-off are irrecoverable’.
“Options considered and rejected were to leave outstanding amounts on the accounts for a further period,” the report said.
Councillor Iain Lindley, the Conservative representative for Walkden South ward, highlighted the extent of the arrears on his Twitter account this morning after the report’s publication.
Yesterday Salford Council wrote off around £860,000 of money owed to it.
— Iain Lindley (@cllrilindley) October 22, 2014
Fellow councillor, Karen Garrido, Leader of the Conservative Group in Salford, spoke to MM about her frustration.
“There’s a lot of money outstanding, a lot of money owing to Salford,” she said.
“I think that the City Mayor should be doing a bit more to try and retrieve this money back.”
She called for greater effort to be made by the council to work on putting payment plans in place to encourage struggling debtors to manage their arrears.
“Before it gets to the state where people are behind, we need to be making it easier for them to come and talk to us so that we can put some payment schemes in place,” she said.
“You know, it’s far easier to actually come to us and say, ‘look, I’m not going to be able to pay this in this time, can I have some kind of payment plan?’
“That’s far easier than allowing people to bury their head in the sand and forget about it.”
As for the people of Salford managing to pay their debts, Ms. Garrido says the council should be doing more to praise them.
“We need to be more on the ball,” she said. “And also we need to make it fair for people who are struggling, some people are struggling, but they do pay their council tax.
“We need to be saying to them that we appreciate what you’re doing and we are going to look after you and make sure that we get the rest of the money from people who have decided that they’re not going to pay it.”
The news comes alongside an announcement that the volunteer-staffed Salford City Radio is to have £15,000 cut from its annual budget.
The report stated: ‘An agreement to a decrease in funding will encourage Salford City Radio to become more self sufficient and should help to provide a more sustainable business model whilst also providing a saving to the Council.”
Paul Barber, Station Manager told MM: “We understand the Council have to make cuts because of the loss of funds from central Govt.
“We regret this of course and will need to deal with the cuts as best we can.”
Mr Barber made the controversial decision last month to start charging volunteers at the Swinton-based station.
The fee of around £26, or 50p per week, will be implemented at the start of next year.
Set up in 2007 with support from the then Eccles MP Ian Stewart, now City Mayor, the station has a licence to broadcast until 2017.
But the council have now determined that in addition to advertising revenue and fundraising, an extra £2000 must be found through the introduction of ‘service user fees’.
“Those who volunteer with us love what they do for the community and their own development in terms of media skills,” said Mr Barber.
“Their individual contributions, in conjunction with general fundraising ventures, will assist in ensuring we have a continued quality service broadcasting to over 30,000 people every month.”
Image courtesy of Andre Lee 1967, with thanks.
