Council to pursue debtors as lost business rates soar

Finance: Convener promises ‘more proactive’ approach to enterprises

Struggling businesses could face earlier intervention after the amount of business rates lost by Aberdeen City Council soared sixfold in the space of two years.

Finance convener Willie Young promised a “more proactive” pursuit of debtors after the local authority was forced to write off almost £183,000 last year.

He explained that could involve the council pushing ailing enterprises towards liquidation quicker to stop bills racking up.

A recent report by townhouse finance chiefs concluded the unpaid sums “will not affect services” because it had been allowed for.

But Liberal Democrats said the “unsustainable” rise – twice last year’s sum and up from just £28,000 in 2013-14 – would have an impact.

And finance committee opposition member, Martin Greig, claimed: “Unpaid debt is turning into a massive problem for the council.

“The consequence is that there will be less funds for council services. The likelihood is that services will suffer.”

Since 2010, the council has written off over £683,000 in unpaid business rates – increasingly from firms which have gone bust and can no longer be pursued for the money.

They accounted for 82% of the “unrecoverable” business rates last year.

Mr Young said part of the problem was caused by unscrupulous bosses using loopholes to shut down operations – and reopen quickly in a different guise.

He suggested action was needed by the Scottish and UK governments and HM Revenue and Customs to clamp down on that blight.

He added: “We’ve got to be more proactive. We cannot allow this to keep going.”

Changes could include a “flagging-up system” to spot mounting debts “after six months rather than allowing

“We’ve got to be more proactive. We can’t allow this situation to continue”

year”.

Mr Young said: “It’s a difficult climate, but there is a balance to be struck.

“At the end of the day, people pay their taxes.

“We expect people to pay their council tax or business rates. There should not be any exceptions.”

In just five years, the total amount of business rates written off has soared from £20,804 to hit £683,117.

In 2010-11, none of that was down to receivership or liquidation but it was £3,673 the next year, then £27,000, £28,000 and £95,000.

The sums are on top of £771,657 in council tax which has been written off in the last 10 years, despite recovery efforts. it to go on for a

Photograph: Kenny Elrick PURSUIT: Finance convener Willie Young said the council could push for liquidations.