Sheffield council chases £35m of debts

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SHEFFIELD Council is owed almost £31 million - and the authority could write off as much as £3.9 million more in unpaid council tax despite a pledge to increase collection.

Both figures were revealed in the council’s annual statement of accounts for 2011/12 and come as £55 million of cuts are being made to services.

But chief executive John Mothersole said the possible loss of council tax was a worst case scenario and that the actual amount which will be uncollected is likely to be much lower.

He added that repayment of the outstanding 2011/12 debts is factored into the council’s budgeting for the current year and officials intend to recoup the entire amount to prevent the need for even harsher cuts.

In the statement of accounts, Eugene Walker, the council’s director of finance, said ‘debts to the value of £30.9 million for 2011/12 are past their due date for payment’.

Debts come from organisations which owe the council money for services such as planning, public bodies including the NHS, unpaid council tax and £1.7 million borrowed by MuseumsSheffield.

Meanwhile, the potential total of unpaid council tax has been made public after The Star revealed in January that £26.5 million was uncollected from the previous five years - including £7.4 million in 2010/11.

The council said it is taking action to recover the unpaid tax, and that included taking people to court.

In the statement of accounts, Mr Walker recorded that £3,914,000 of the 2010/11 total could end up being written-off, against a total of £152 million paid.

The total uncollected council tax income for 2011/12 has not been revealed.

Mr Mothersole said: “The amount of debt owed to the council is reducing, down from £35 million in 2010/11. A much larger proportion of the 2011/12 debt is new debt, with long-term owings having reduced from £23.9m to £14.5m.

“The debt is from individuals and companies and we intend to pursue them rigorously. The amount of short-term debt, under three-months old, has grown from £8.4 million at the end of 2010/11 to £14m in 2011/12, which is perhaps and example of the times we are in, with people finding it harder to pay bills promptly.”

But he added: “The taxpayers of Sheffield shouldn’t have to pick up the bill. Heads of departments within the council have been instructed to bring down long-term debt or face fines and I think that is part of the reason why we have seen it decrease.

“We are not writing £30 million of debt off and the vast majority, if not all of it if possible, will be collected. This is factored into our budget for this year otherwise we would be making even harsher cuts.”

Mr Mothersole added: “The figure for uncollected council tax is a notional amount. We aim to collect the whole amount which is outstanding.”