Town hall hit by £1.7m business rate shocker

Blackpool Town Hall and (below) council leader Simon Blackburn.
Blackpool Town Hall and (below) council leader Simon Blackburn.
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Businesses which have left Blackpool Council almost £1.7m out of pocket have come under fire for “disappearing” while being in debt to the town hall by tens of thousands of pounds.

Council leader Coun Simon Blackburn says “several high-profile” business owners are among those who have failed to pay their business rates.

Blackpool council leader Simon Blackburn

Blackpool council leader Simon Blackburn

But those involved cannot be named due to the Data Protection Act.

The council has been forced to write off £1.68m in owed business rates going back around the last six years.

The debts include a single company which owes £96,102.

Coun Blackburn said: “What I do find very frustrating is that I am not able to publish the names of these people.

“Several names appear more than once, owing vast sums of money to the council.

“Several high-profile business owners, who always seemed to have a lot to say about how the town is run, seem to have no qualms about disappearing owing us tens of thousands of pounds.

“We are very dogged and tenacious when it comes to pursuing debtors, and clearly need to continue to be.”

According to a report by town hall treasurers, a total of 30 businesses – 22 companies and eight individuals – had amounts totalling £824,412 that could not be collected due to bankruptcy or insolvency. Another 18 businesses have simply ceased trading owing £373,902.

A further 21 businesses had debts of £392,189 where the liable parties have insufficient assets to pay up and further action would not be economical.

The report adds: “The leader of the council wishes to make the names of the debtors public, but the Data Protection Act of 1998 prohibits their publication.”

Susanne Johnson, owner of The Wool Shop on Bond Street, South Shore, said: “It is very unfair on businesses like mine which are paying, because it is a huge struggle for people like me but we stick to the rules.”

But Steve Pye, chairman of the Federation of Small Business in Blackpool, said it was harsh to place all the blame on businesses.

He said: “The last six years we have been in recession so many businesses have gone under.

“There are a lot of empty shops in some parts of Blackpool, like South Shore, and perhaps there should be some kind of incentive scheme between the public and private sector to get them occupied again.”

Because of the way business rates have been distributed in the past, the debt has not impacted on this year’s council spending which saw the council forced to make budget cuts of £14m and slash youth services and CCTV and youth services.

But Coun Blackburn (pictured) warned it could effect how much government cash the town gets in future if businesses do not start paying up.

Business rates are handed over to central government and then redistributed to local councils, but the way that is done has changed.

From April this year the council will receive a set amount of government funding as part of the re-distribution of business rates to all local authorities.

Once the council collects enough business rates to meet its quota – set by government based on the number of businesses in the resort – it will be able to keep 50p of every £1 collected in excess.

Coun Blackburn added: “It will matter much more in future years, so it’s important we get on it now.”

Tory group leader Coun Tony Williams said: “The council historically has a bad record when it comes to collecting business rates.

“If high profile businesses are upping sticks and leaving the town without paying, we should be able to name them and chase them through the courts.

“That is only fair to those businesses who do pay regularly.

During the last financial year, Blackpool Council collected £46.8m in business rates.

Steve Thompson, assistant chief executive for treasurer services at Blackpool Council, said: “Periodically we have to write off debt that would be unrealistic to assume we would collect as part of the accounts.

“But at a later date, if we do receive any income back, we write that back into the accounts.”

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