Blackpool Council writes off £600,000 of debts

Town hall chiefs have been forced to write off £626,000 of debts and uncollected business rates including nearly £100,000 owed by a charity.

Wednesday, 11th January 2017, 9:41 am
Updated Wednesday, 11th January 2017, 9:46 am
Blackpool Council has written off £600k of debt. Pictured is Blackpool Town Hall.

Six hotels are also included among traders which defaulted on their payments.

The sums are in Blackpool Council’s latest report setting out outstanding debts where the authority judges “there is no prospect of recovery” or where the cost of pursuing the debt outweighs the benefit.

It comes amid warnings a 4.99 per cent jump in next year’s council tax could also lead to fewer people being able to pay that charge in the future.

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The latest figures show four businesses had amounts totalling £246,720 that could not be collected due to bankruptcy or insolvency.

A further 16 businesses ceased trading owing £346,735.

Another £32,529 is owed in sundry debts including £6,241 after insurers refused to pay the full cost of damage to a road sign following an accident at junction 4 of the M55.

The Africa Relief Trust, a charity supporting Ugandan people, has one of the highest levels of outstanding business rates, owing £99,892 in relation to a warehouse.

An investigation into the Africa Relief Trust by the Charity Commission, launched in 2012, is still ongoing.

The charity, which according to the Commission had among its objectives relieving poverty and advancing education, was removed from the charities register in September 2015.

In the past, £500,000 of unpaid business rates had to be written off in July 2014, while in 2013 it emerged the council was out of pocket to the tune of £1.7m going back six years.

Coun Tony Williams, leader of the Conservatives on Blackpool Council, said; “Yet again this council is writing off a considerable amount of bad debt and what is worrying is there are no less than six hotels that look to be in liquidation.

“The worry of continuing low bookings is a concern for lots of hoteliers in the town and it’s feared many more could follow in the footsteps of these unfortunate businesses.”

But council leader Coun Simon Blackburn said there was no option but to write off some debts.

He said: “Unfortunately, once all other options have been exhausted, it is sometimes necessary to write off debts.

“That does not mean to say that we don’t continue to pursue those who owe us money, it simply represents a realistic adjustment to our accounts, reflecting the fact that due to bankruptcy, death, absconders, or debtors who have no assets, we are unlikely to recover the money.

“I have offered Coun Williams the opportunity to meet with our debt collection team to see just how hard we work to trace defaulters, but as yet, he has yet to take me up on that offer – because he knows that we are doing all we can.”

Coun Williams also warned more householders may find themselves in debt in future with council tax set to rise again next year.

He said: “Blackpool Council has the worst record for collecting council tax in the whole of the UK so we can expect these write offs and shortfalls in council tax revenue will continue.

“The council’s recent announcement that council tax in Blackpool will increase by a massive 3.99 per cent will only add to the problem and I am expecting that next year’s and subsequent debt write off will be even higher.

“It’s bad economic practice to hike up council tax when the current level is difficult to collect. It may have been more prudent to look at a global level that was attainable and thereby reduce the debt situation and in doing so create more revenue by improving the collection process.”

It has already been revealed council tax will go up by 3.99 per cent, but there could be another one per cent increase to pay for adult social care.

Coun Blackburn said: “It is true that Blackpool has a worse collection rate than many areas, but I’m surprised Coun Williams hasn’t noticed the glaring link between the councils that struggle most with council tax collections and the list of most deprived areas, which also has a striking resemblance to those councils targeted with the harshest cuts by his party in government.

“We have a social care crisis which is contributing to a crisis in our hospitals through bed-blocking and the Tory government has failed to put any money into dealing with that.

“It’s the government’s solution, not ours, that councils have to raise council tax to pay for social care – rich areas with less demand on services and less cuts from the government might well be able to absorb the cost of this, but Blackpool certainly can’t.

“We know people are struggling and we know that some will struggle to pay.

“But what Coun Williams is suggesting would mean the council making millions of pounds of cuts on top of those we are already being forced to make.”