Barnet Council have claimed they are still on a sound financial footing despite the authority voting to write-off another £2.6 million of debts. The debtors included businesses that had not paid tax after many of them had gone bust in the current economic climate.
This brings the total of uncollected cash in the last twelve months to £6.4 million with housing benefit overpayments and unpaid council tax accounting for a huge chunk of the debt. The council claim that decisions to strike off the debt were only made as a last resort and that this only ever happens if they are convinced there is no realistic chance of recovering the money. Decisions like this are common practice in both business and local government. However, the decision has been met with frustration from the opposition Labour group who said the lost cash would have helped to protect the local services that are facing closure.
The Labour Party’s Councillor, Alan Schneiderman, said: “This is a huge amount of money that, if collected, could have been used to help keep parking charges down, keep Friern Barnet Library open or pay for other local services that the council is brutally cutting. Were all of these debts really unrecoverable, and if not why were they not collected? Everyone should be shown the evidence and they also need to get tough with rent and council tax arrears as this is a considerable amount of money that could be used on improving the borough.”
The council will receive some extra money when they increase the weekly rent on their thousands of properties and insist they have saved money by arranging good deals on landlord insurance quotes. Council tax increases will also bring in some much needed cash. Despite the income loss the authority is meeting its financial targets and they are on as sound a financial footing as they can be.