Uncollected debt worth £4.6 million has been written off by Peterborough City Council, with the vast majority due to companies going into administration or individuals becoming bankrupt.
The sum includes uncollected council tax, business rates, housing benefit overpayments and miscellaneous debts. All of the debts were £10,000 or more, with the aggregate total coming to just over £4.6 million.
In a report outlining why the debt will never be collected, the council said: “All cases requested for write-off follow a lengthy process to recover the outstanding money, sometimes dating back many years.
“Only once all avenues have been exhausted will the council consider writing off debt.”
The largest type of debt raised each year is business rates at approximately £100 million, followed by council tax at approximately £80 million per year.
The amount of money being written off is less than 0.3 per cent of the total debt over the period when it was due to be received. That figure rises fractionally to 0.38 per cent when debts less than £10,000 are included in the total.
The council said it is “committed to taking all appropriate action necessary before considering a debt for write off. This includes multiple written reminder letters early in the recovery process, telephone call follow ups, senior management dialogue with counterparts and, where necessary, court and enforcement agent action.”
It added: “The council recovers millions of pounds every year in unpaid debt, sometimes dating back years, due to being persistent in recovery activity. For example, in 2015/16 the council collected £1.1 million in council tax which was owed to it for the previous financial year and a further £889,000 from 2013/14 and before.”
Other reasons for non-payment of debt includes the person who owes the money dying, with no further income due from their estate, or the council being unable to trace the debtor following “extensive enquiries.”