Peterborough city councillors refuse to rubber stamp 'vague' report writing off £4.7m in debt

Peterborough City Council (PCC) wrote off £1.6m of irrecoverable debt between 2020-21 according to an internal report, over a third of the £4.7m written off in its history.

Of this £1.6m, around £707,000 was because companies that owed the council money went bankrupt or into administration – a particularly high figure because of the impacts of the Covid pandemic.

But the reason a further £887,000 was written off was because of “service transfers/ commercial agreement/ negotiation”, a unique justification not listed for any other year.

The debts PCC writes off are made up of unpaid council tax, unpaid business rates and overpaid housing benefits.

These sometimes can’t be collected from individuals because they have died or can’t be traced.

In other instances, the statute of limitations for collection action has been reached or a company has gone under.

PCC provides for these irrecoverable debts each year, meaning they don’t generally impact its budget, the report says: in fact, just £3,637 is currently unaccounted for.

But who or what is behind each of the council's irrecoverable debts and why have they been written off?

These private details haven't been made public – but even councillors tasked with scrutinising the decision haven't seen the report containing them.

'How can we audit what’s happened in this process if we don’t actually see the information?'

Speaking at an audit committee meeting, Cllr Nick Sandford (Liberal Democrats) asked: “How can we audit what’s happened in this process if we don’t actually see the information?"

"Because, just reading the report, it just gives you some vague, general information as to what these items are," he continued.

“To be able to fulfil the role of an audit committee you would, at least, need to have on a confidential basis access to the report, so that we can check that a proper process has been gone through.

“This council has been criticised for not having proper audit procedures, so for us to just take note of a report that is authorising the writing off of £4.7m without actually seeing the information would be not good audit practice.”

Cllr Sandford also asked whether the council’s cabinet, which has already approved the report, was able to see the confidential details, but did not receive a response to this during the meeting.

Other councillors also took issue with the report, with Cllr Imtiaz Ali (Greens) pointing out that some of the debts listed as written off are under £10K, despite the agenda item being named “irrecoverable debts in excess of £10,000”.

Committee chair Chris Brook added that "when I read the report, I didn't actually know what I was reading.

"I didn't really know what the write-offs were and whether it was good or bad."

PCC's finance chief Cecilie Booth, who was involved in preparing the report, responded that “there’s no good or bad or indifferent level” as some write-offs are simply inevitable and that the council’s collection rates are generally “very good”.

But she conceded that it “would help” members’ understanding if they could see the details.

These will now be sought for them, subject to legal approval.

The audit committee agreed to revisit the report at the next meeting rather than endorsing it without seeing the details.