Update on Council’s approach to recouping outstanding debt
Liverpool City Council is reviewing outstanding debts to reflect national best practice, and is making progress in bringing in money owed by its top debtors.
In the past six months the Council has focused its Council Tax recovery activity on the top 100 debtors, who owe nearly £8 million and in some cases not paid a penny of Council Tax. This work has resulted in payment arrangements being made totalling £1.5 million. The Council has also obtained bankruptcy orders from the courts for seven of the top 100 debtors and has started to recover £144,000 of assets owned by these individuals. This reflects the Council’s commitment to strengthening financial resilience, maximising income collection and debt recovery, as well as delivering more transparent reporting systems and forms part of a focused improvement plan.
It forms part of the Council’s refreshed approach to debt collection which will also see some historic debts, pre-dating 2017 and some dating back as far as 1997, reviewed and, in some cases, written off. This includes Council Tax, Business Rates, and social care charge arrears where an individual has died, is insolvent, cannot be traced, or where the cost of recovering the debt is higher than the sum involved. There are debts relating to accounts that have been closed for years, those where enforcement agents have been unable to collect the money owed, insolvent companies and where people have died leaving no estate. Others are where those involved could not be traced as they had moved with no forwarding address but if the Council does find these individuals the debt will still be recovered.
Deputy Council Leader and Cabinet Member for Finance and Resources, Cllr Ruth Bennett, said: “Our recent recovery activity has led to people who have ignored letter after letter, year after year, actively seeking to settle their debt to the city – in some cases repaying tens of thousands of pounds. We are making significant improvements across the Council to ensure we have the financial resilience to deliver services to our residents.
“The debt we are writing off is funding that we know is either irrecoverable or is not financially viable to continue to pursue, allowing us to concentrate our efforts on the debt we can recover.”
“Balanced against this tougher approach, we are acutely aware that the Cost of Living crisis means there are people who genuinely can’t afford to pay. We remain one of the most generous councils in the country when it comes to supporting vulnerable households. This includes working with Citizens Advice and the voluntary sector to help households claim Council Tax support, or other reductions in liability, or to provide longer periods of time to pay what is owed. All we ask is that you contact us if you are in difficulty.”