Agenda item

A joint report of the Executive Member for Finance and Governance and the Director of Finance was presented asking the Committee to consider a Corporate Debt Write Off Policy.

The purpose of this new policy was to provide a corporate approach to the writing off of bad and irrecoverable debts in a fair and timely manner, whilst seeking to maximise the opportunity for collection, thereby minimising the need for write off. 

All service areas would have to follow this policy to allow the Council to operate a consistent approach to debt write off, whilst having due regard to the customer’s ability to pay.  Whilst some parts of debt write off were governed by particular legislative requirements such as Council Tax, Business Rates, Adult Social Care Debt; wherever possible the overall principle of debt write off should be efficient and effective, and always give consideration to the financial impact on the Council when debt was written off.

This policy would underpin any specific recovery strategies and be applied across all directorates.  The policy would also support cross directorate communication where a shared customer base existed.  It was envisaged that the approach would work within Data Protection legislation, and should be considered at a corporate level to reduce multiple officer engagements across directorates with the same resident and or business base.

The introduction of a Corporate Debt Write Off policy was part of the Council’s strategic direction, and as such required executive consideration followed by Council approval.  The Council had a statutory duty to collect outstanding debt and did so in accordance with the Local Government Finance Act 1992 and the Council’s Financial Procedure rules.  The introduction of this policy would support this duty and also ensure that the Council’s debt write off approach/methods were consistent, fair and efficient across all of its services.

This was the third of four policies being developed that brought together a significant number of supporting arrangements that would not only complement,  but enhance the Council’s social regeneration plans:

• Vulnerability Policy - (Executive Approval on 16.6.2020).
• Corporate Debt Management Policy – (Single Executive Approval on 10.08.21).
• Corporate Welfare Policy – (currently in design).

The policy set out a framework for a consistent approach to write off by delegating debt levels to various Managers/Heads of Service where the aim was to enable cases that fitted specific criteria (contained within the policy) to be written off, which would in turn enable the more efficient collection of outstanding debt.  The policy also sought to address other matters such as credit balance write offs and the reinstatement of previously written off debt.

The policy applied to all debts owed/due to the Council and the general principles adopted in the policy were as follows:

• To ensure a professional, consistent and timely approach to debt write off across all of the Council’s functions.
• Where Data Protection legislation permitted, to promote a coordinated approach towards sharing debtor information internally and managing multiple debts owed to the Council.
• To ensure that debts were managed in accordance with legislative provisions and best practice.
• To ensure that any steps taken to recover debt/income were in line with the Council’s corporate policies on surveillance and data protection, and to ensure compliance with RIPA and GDPR legislation.

The policy linked into the Council’s Vulnerability Policy and the Stop the Knock approach and looked to ensure that supporting arrangements were in place for debtors where their vulnerability affected their ability to pay a debt owed to the Council.  Those considered to be vulnerable with an ‘unrecoverable’ debt would be linked into the Social Inclusion arrangements contained in the recently adopted Debt Management Policy.

The policy applied to debts and income due to the Council including:

• Council Tax.
• Business Rates.
• Overpaid Housing Benefit.
• Rents, service charges and insurance.
• Sundry Debts (incl. licensing, fees, statutory notices, subscriptions, etc.).
• Recovery of enforcement costs.
• Adult Social Care.
• Charging for discretionary services or any money due to the Council under terms of an agreement to pay for goods, services or property.

• Fines (includes car parking, public space protection order, environmental).

It was noted that this list was not exhaustive.

The policy provided a comprehensive approach that allowed for the automatic write off of debt by Heads of Service through a “pre-request for write off” process, where the debt met pre-determined criteria which made it unrecoverable.  This criteria (whilst not exhaustive) covered debt which was uneconomical to recover, unenforceable, and those debtors that had been untraceable for a period of over 6 months, amongst others.

Specific delegations of authority were contained within the policy, within the pre-request process and the amounts that could be written off following submission for suitability, which varied depending on the type of debt.

The policy also ensured that where specific legislation required that a debt should be written off, these debts could be processed without delay by

the manager responsible for the service.  The policy also extended to the reinstatement of previously written off debt and credit balances at a corporate level. 

Consideration to the use of third party collection services (which should not be confused with bailiff/enforcement services), where debts were considered uneconomical to recover would be given, to maximise cash opportunities to the Council.

Over a period of time debts would be cleared and a more accurate picture of the Council’s overarching debt could be provided.

It was confirmed that all Local Authorities shared a database and reported information in relation to absconders to try and trace them

AGREED as follows that:

• The Corporate Debt Write Off Policy was noted and endorsed by the Committee.
• The Corporate Debt Write Off Policy was referred to full Council to amend the Budget Policy Framework and the Officer Scheme of Delegation.
• Delegated authority was provided to the Section 151 Officer to approve any future modifications to the Corporate Debt Write Off Policy.