Huge £42m Debt written off by City Council

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huge debt written off by liverpool city council

Millions of pounds of unpaid council tax debt has been written off by an authority, it has been revealed.

A Liverpool City Council report said about £42m of debts, which was mostly uncollected council tax dating back to 1997, was now “clearly irrecoverable”.

The Labour-run authority said “regular review and write-off of debt” was a “standard financial practice”.

The council’s Liberal Democrat opposition said it was a “smack in the face” to ratepayers across the city.

A report into the local authority’s finances will be discussed by the cabinet next week, the Local Democracy Reporting Service said.

Some £25m is uncollected council tax, including money which enforcement agents couldn’t recover.

‘Not viable’

A total of £14m in business rates is also expected to be forgiven, along with £1.3m in housing benefit overpayments.

Earlier this year the council estimated it was owed about £230m in bad debt it never really expected to recoup.

Deputy leader and cabinet member for finance Ruth Bennett pointed to recent debt recovery successes, saying the council had seen “people who have ignored letter after letter, year after year, actively seeking to settle their debt to the city – in some cases repaying tens of thousands of pounds”.

She said the £42m was “either irrecoverable” or “not financially viable to continue to pursue”, and that writing it off would allow resources to be focused on money that could be collected.

Lib Dem opposition leader Carl Cashman said he felt the ruling Labour Party were “taking the people of Liverpool for fools”.

He said “The city council will make cuts of around £50m this year, most of them affecting the most vulnerable in our city.

“Yet Labour are writing off debts worth over £39m. This essentially means that hard working and sometimes vulnerable Liverpool residents will suffer the consequences.”

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