Council writes off millions after Debt Collection failure

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A cash strapped council has had to write off more than 2m of unpaid council taxes after Debt Collectors and Bailiffs recovered just £35,000 from a total of 2 million owing.

The unnamed Debt Collection Agency had been working on behalf of Stoke City Council on a ‘no win – no fee’ arrangement and managed to recover just 1.7% of the total amount owing which represents a massive loss.

Industry experts have blamed the council saying the went for the cheapest option rather than the best which would have delivered far better results.

The authority also classed a further £930,000 of business rates, rent and sundry debts as unrecoverable. In all circa 2.9m has been written off by the council.

Councillor Terry Crowe insisted the authority will always take action when a debt is owing “Writing off debt is not something we do lightly and only consider when all reasonable avenues for recovery have been exhausted”

It is believed the Debt Collection Agency used by the council suffered losses as a result of the low collection rates but nothing on the scale Stoke City Council has had to write off.

Once again it begs the question of a lack of due diligence on behalf of the Council where the focus seems to be on cutting costs with a lack of foresight as to the consequences.

 

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