East Renfrewshire council has been scrutinised as it writes off over £3m of unpaid debts while raising council tax

Local authority wipes £3 million of bad debts

Council tax bill

£3 million of unpaid debt in East Renfrewshire is being written off. In total, £3.363 million is included. The 3.6 million of debt is for unpaid community charge arrears. Further to that, £739,000 of council tax and housing benefit overpayments will also be wiped. The simple answer as to why, is that the council admits there is ‘no chance’ of collection.

Rising tax anger

The move has angered locals due to planned council tax rises. During April, local council tax in the area is to rise by 3%. The message from angered residents is it seems those paying tax honestly are propping up the non payers.

James Price of the Taxpayers Alliance spoke to local press about the debt write off.

The reality of ‘writing-off debt’ means that those taxpayers who do play by the rules will be forced to pay more. Even more than they otherwise would because their council isn’t collecting what they should be.

If people or businesses can’t afford to pay their tax bills, that suggests that their taxes are far too high and the council should adjust their spending accordingly.

Those residents who have paid their taxes will be forgiven for being upset that East Renfrewshire Council is also increasing council tax again this year.

‘Bad’ debts

Debts are classed as ‘good’ or ‘bad’ depending on details. What has caused anger to locals in this case is the council allowing debts to ‘turn bad’. A good debt simply means it is payable. A good debt improves a life or lifestyle. If debt ages, or the debtor becomes unable to pay it is considered ‘bad’. In debt collection, we aim to chase payments quickly. The faster you deal with a debt, the less chance of it turning bad.

With the council allowing the debts to age, it reduces their ability to collect. Eventually a write off became the cheapest option. While recovery does cost time and resources, it is much more cost effective when employed sooner. That is why we tell our clients we aren’t just a safety net or a last resort. To be most effective, involve debt collection early.

Good and bad debts apply to any person, business or even local council. The ability to chase varies in every case. While local councils may have the resources, they may not have the processes. The same applies to any business or person. If you have a debt requiring collection, it can be worthwhile handing it to a debt collector. Avoiding the stress and the consistent conversation needed is what we are here for. We have the strategies, the personnel and the time to resolve good debt fast.

Pass your debt on

If you have debts to pass on, get in touch. Are You Owed Money can handle any size and number of debts across the UK. Handle your debts quickly with the seasoned experts. If you have queries about debt collection, call us on 0800 130 3357 for more information.

To contact our sales team you can email enquiries@ayom.co.uk or fill in our contact form here.

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