Town hall bosses lose £1m as firms go bust
CHIEFS WRITE-OFF BUSINESS RATES DEBT – BUT SAY THEY BUDGETED FOR LOSSES
A COUNCIL has lost around £1m in business rates because of 52 companies becoming insolvent, with 36 going bust in the last year alone.
The local authority has written off the debt.
This represents around two per cent of the total cash Salford council expected to collect from business rates during the year – but bosses say they budgeted for it.
A further £1.5m owed in council tax and housing benefit overpayment has been written off in the last 10 months due to the debt being ‘irrecoverable.’
Labour councillor Bill Hinds, who is the lead member for finance and support services at Salford council, said he was worried the situation would be worse.
He said: “To see over a million pounds written off, you think, ‘what the hell’s going on?’
“But this is an issue that over the last 20-plus months I’ve been concerned could start to materialise. We really do need to keep a close look on that.”
Town hall bosses said the number of businesses which went into liquidation in the last financial year was ‘quite high,’ but it is not clear if this was due to Covid.
An additional £7,000 of business rates owed to the council by 34 companies was also written off because it was considered ‘uneconomical’ to recover.
Nearly £1m owed in council tax was written off due to residents ‘absconding.’
A further £500,000-worth of council tax revenue was written off due to 420 residents becoming bankrupt or benefiting from a debt relief order. And around £300,000 of housing benefit overpayments was also written off.
Coun Hinds added: “During all these months, I’ve been extremely worried that it could be far, far worse than what we’re seeing at the moment.
“We’ve done everything we can to help people that are in difficulties and it’s unfortunate that we’re in the position where we’re writing this £1.5m off.
“But everybody’s worked extremely hard and will continue to do so.
“It could be far, far worse.
“That doesn’t mean at all that we’re being complacent about it. It’s important, to meet the services that are needed in the city, that everybody does whatever they can to make sure that the money comes in to keep the ship afloat.”
I’ve been extremely worried that it could be far, far worse than what we’re seeing at the moment.
Coun Bill Hinds