A struggling council has been to have failed to collect tax and business rate debts worth over £5 million a year, sparking fears over potential insolvency proceedings.
Cash-strapped Hull City Council had outstanding tax debts of £2.9 million in the last fiscal year, with £2.52 million in the previous year, and £2.86 million in2010/11, according to figures obtained by the Yorkshire Post.
Business rate debts also totalled exceptional amounts, with the total reaching £2.62 million in the last financial year, £2.47 million in 2011/12 and £1.98 million in 2010/11.
The authority has moved to reassure the public that it is pursuing historic debts, in spite of the fact it must save more than £40 million by 2015/16.
However, actual levels of outstanding debt are likely to exceed expectation, as the council declined to give figures for arrears relating to the Business Improvement District levy, housing rents, commercial rents, former tenant rent arrears, benefit overpayments, parking charges, adult service care fees and other debts such as unpaid fees and charges.
Speaking to the Yorkshire Post, a spokeswoman said: “The council collects a wide range of incomes as part of its role and needs to consult on its approach to debt recovery in order to adopt a balanced approach.
“The corporate debt policy provides a framework for how the council will work with its customers and partners to collect debt from citizens and businesses.
She added: “To give an indication of collection performance for some high value areas, i.e. regarding council tax and business rates, the council ultimately collects up to 99.3 per cent and 99.1 per cent, respectively, from these areas, thereby maximising the income to the council for the benefit of the residents of Hull.”
Also speaking to the Yorkshire Post, Andy Sims, Assistant Head of Service for revenues and benefits, said: “The policy will highlight that efficient action will be taken against those that will not pay the council and also detail the clear and professional advice for those that cannot pay.
“By working together with our partners, we can advise those who struggle with their finances, thereby increasing the potential for the authority to recover as much money owed to it as possible.
“This is absolutely essential in these times when other sources of income to the council such as grant funding are being reduced.”
Aritcle by debtmanagementtoday.co.uk