Agenda item

This report outlines the changes to the debt write-off procedure and details those debts over £3,000 that had been written off, as required by the Council’s Constitution. It also provides an updated version of the Council’s Ethical debt Recovery policy.

Cabinet RESOLVED:

(1)      To note the revised arrangements for the write-off of bad debts, as set out in Appendix 2 of the report.

(2)      To note the debt write-offs over £3,000 listed in Appendix 3 of the report and that these largely related to old debts from 1994 to 2010.

(3)      To note that while there was a requirement to report write-offs over £3,000 to Cabinet this was the first report of this kind since the recommendation in the Council’s Internal Audit report of June 2019 as set out in Appendix 1 of the report.

(4)      To note the revised debt policy referred to as Ethical Debt Policy that had been updated and approved by the Strategic Director for Customer and Digital Services to include reference to the new Breathing Space requirements as set out in Appendix 4 of the report.

Councillor McLennan, Deputy Leader and Lead Member for Resources, introduced a report advising of changes to the debt write-off procedure which had been designed to improve its efficiency and effectiveness and reporting on those debts over £3,000 which had been written off, as required under the Council’s Constitution.  The report also advised of an update to the Council’s Ethical Debt Recovery policy in order to include reference to the new Breathing Space requirements.

Cabinet noted the link between the Council’s debt write off and Ethical Recovery policies as part of a co-ordinated approach and focus towards financial inclusion.  The report was the first presented to Cabinet since an Internal Audit review in June 2019 had recommended that where it was certain debts were no longer recoverable or cost-effective to recover they should be written off following appropriate review and authorisation.  Following the Internal Audit review an initiative had been launched to review old debts, with a revised write off procedure approved by the Director of Finance.  The revised procedure included the requirement for debts written off over £3,000 to be routinely reported to Cabinet, although members also noted the intention to review this limit given the length of time it had been in existence.

The list of those debts written off over £3,000 had been detailed within Appendix 3 of the report with members noting these had related to old debts incurred between 1994 – 2010 with the grounds for write off being they were either uneconomic to collect, were irrecoverable or subject to individual voluntary arrangements.  Members also noted the detailed breakdown of the amendments made to the Ethical Debt Recover Policy, as detailed within section 3.9 and Appendix 4 of the report and

Councillor M.Butt in summing up, felt it was important to highlight that the approach towards dealing with debtors remained fundamentally unchanged in that the Council would continue to engage with and support vulnerable residents experiencing financial hardship whilst also continuing to pursue debt where individuals had made the choice not to pay until it was unviable to do so.  Pending the outcome of the review into the level of debt write off it was felt appropriate to report to Cabinet, it was noted the intention to provide regular ongoing updates for Cabinet moving forward.

In considering the recommendations, Cabinet noted the information provided within the exempt appendix accompanying the report and it was RESOLVED to:

(1)      Note the revised arrangements for the write-off of bad debts, as set out in Appendix 2 of the report.

(2)      Note the debt write-offs over £3,000 listed in Appendix 3 of the report and that these largely related to old debts from 1994 to 2010.

(3)      Note that while there was a requirement to report write-offs over £3,000 to Cabinet this was the first report of this kind since the recommendation in the Council’s Internal Audit report of June 2019 as set out in Appendix 1 of the report.

(4)      Note the revised debt policy referred to as Ethical Debt Policy that had been updated and approved by the Strategic Director for Customer and Digital Services to include reference to the new Breathing Space requirements as set out in Appendix 4 of the report.