Faltering economy pushes up bad debts

By Matthew Bates 08/08 Updated: 09/08 10:34

OVER £3 million-worth of debt was written off by Coventry City Council last year.

Bosses revealed the figure this week, which is an increase of around £200,000 on the previous year.

The figure has risen steadily over the past few years as the British economy struggles and last year saw business rate write offs shoot up from just £20,500 in 2010/11 to £1.98m in 2011/12.

Bosses blamed the rise on the significant number of businesses going bust due to the economic downturn, as well as a two-year delay in other write offs.

The amount written off in council tax fell by over £1m to £700,000 last year - an improved figure on recent years - but £427,000 was lost in benefit over-payments, more than double 2010's amount.

Helen Harding, assistant director of revenues and benefits, who penned a report to council, said: "All service areas have robust procedures and policies in place to ensure that every effort is made to recover debt owing to the council and that debt is written off only in prescribed circumstances.

"The council utilises a range of techniques to maximise the collection of corporate debt including tracing agencies, credit reference agencies, collection agents and legal processes.

"Each year the level of bad debt provision is reviewed based on the level of debt having been written off. This process ensures that the council's annual budget contains sufficient provision for the write-off of bad debt."

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