Council forced to write off over 1m of uncollected debts

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Council writes off uncollected debts

Over 1 million pounds has been written off as uncollected debts by a council in Wales.

Denbigh County Council predicted in December that it would be £2.1m over budget by the end of the current financial year, a situation worsening as construction costs rise and energy bills soar. Whilst Denbighshire has managed to make savings, lessening its overspending from an initial prediction of £5.5m, figures released this month reveal Denbighshire has written off over £1m (£1,013,245) in debts.

Housing Benefit overpayment debts

These include £267,057 of housing benefit overpayment debts accrued over the past five years, debts that were errors. The figures were revealed this month by an application made by a member of the public under the Freedom of Information Act.

The debts written off also include £524,896 of council tax debts; £68,310 of council tax court costs; and £152,982 of general debts since 2018. Cllr Huw Hilditch-Roberts slammed the council, insisting residents were struggling during the current cost-of-living crisis.

“These figures make quite shocking reading, especially in the context of the cost-of-living crisis that the country and the county is currently facing,” he said. “Having over £267,000 worth of housing benefit overpayments during this time is quite shocking.

“That is human error. So there is a real need for the system to be tightened up.”

Denbighshire outsourced its revenues and benefits payments management to a third-party company but has since brought it back in-house.

Council hoped they would sort problem of uncollected debts

Cllr Hilditch-Roberts said he hoped the council would get on top of the problem. “Let’s hope the fact that the council is now grabbing the bull by the horns that they are going to lead and improve in this area because the residents of Denbighshire are suffering due to a loss of revenue, which equals fewer services,” he said.

A spokesman for Denbighshire County Council said: “Denbighshire County Council has a robust process for the collection of debt. Arrears or debt will only be written off as a very last resort once all possible options are exhausted. Reasons why a debt can be written off can be due to the customer passing away, becoming insolvent, or absconding; however, this list is not exhaustive.

“Housing benefits overpayments can occur for a variety of reasons. Common reasons are claimant error, claimant fraud, local authority error, or DWP (Department of Work and Pensions) error. Again, this list is not exhaustive and is based on each individual case.

“Debts that have been written off can also be written back should circumstances change, such as a person absconding and then being traced. Other reasons for write-off can be out of our control and leave us with no option such as if the customer becomes insolvent.”

Uncollected debts breakdown

Council tax – debts written off

2018/19 – £137,928.07
2019/20 – £183,836.99
2020/21 – £55,007.76
2021/22 – 148,125.35

£524,896

Council tax court costs

2018/19 – £24,290.18
2019/20 – £20,425.56
2020/21 – £5,988.73
2021/22 – £17,607.16

£68,310

Housing Benefits Overpayments

2018/19 – £68,494.26
2019/20 – £80,870.82
2020/21 – £45,799.47
2021/22 – £61,370.48
2022/23 – £10,524.01

£267,057

General Debtors

2018/19 – £68,697.22
2019/20 – £18,005.92
2020/21 – £17,119.93
2021/22 – £49,161.71

£152,982

 

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