How Pendle Council is handling bad debts

The Executive will be making a decision about which debts it writes off, for example, because the people concerned have disappeared.

Some debts are also in the hands of administrators because of companies which have gone bankrupt and may be paid at a much later date.

The amount of debt the Executive will be asked to write off for unpaid council tax is £260,372 and £318,401 for business rates.

This is because all avenues for collecting these sums have, at present, been exhausted.

Councillor Linda Crossley, who oversees finance for the Executive explained:

"There does come a time when chasing a debt is no longer economically viable.

"But we do keep these debts on the system and when we get new information we pursue them again," she stressed.

For example, since April last year over £54,000 of debt which was written off is now written back on and we are actively pursuing payment from people who owe the Council money.

This is thanks to various tracing methods including a special database which tracks people who owe us money, when they apply for a loan, mortgage or for credit.

Dean Langton, our Chief Finance Officer said:

"To put it in perspective, Pendle Council collects over 97% of its debts and we are recommending that councillors agree to write off just 0.77%.

"In fact, local authorities perform really well when it comes to the collection of taxes. 

"For example, if you compare our 97% collection to the mid-70% that the Inland Revenue collects.

"We give local residents advice on paying council tax, for example, helping them to spread the cost by using direct debit.

"When people get into debt to the Council, we act quickly to try and sort the situation out.

"We take a fair and consistent approach to recover unpaid debts, taking into account people's ability to pay and their circumstances.

"But it's important that the small number of people who are deliberately trying to avoid paying what they owe the Council aren't allowed to get away with it.

"We only use bailiffs or the courts if we have to," he explained.

Councillor Linda Crossley added,:

"It's important that Pendle people get the benefits they are entitled to and we run advice sessions to help people.

"But it's equally important that people pay their council tax.

 "In addition to existing ways of collecting council tax, the Council is looking at the possibility of using text messages to send reminders to mobile phones when people's payments are over-due", added Dean.

"This would reduce costs and improve our collection rates even more," he said.