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Council / Debts owed to council expected to rise next year

Lerwick Town Hall.

SHETLAND Islands Council expects to see a rise in the level of irrecoverable debt next year, mainly owing to the impact of coronavirus.

Councillors yesterday considered a report saying that only 0.213 per cent of £96.87 million owed the council in rent, non domestic rates, council tax and bills had been written off in 2019/20. That still amounted to £206,413.

Speaking via video link to his colleagues in the Town Hall, Shetland South councillor Allison “Flea” Duncan said that the council should be writing to debtors urging them to seek help from the Citizen’s Advice Bureau.

Council executive manager of finance Jamie Manson put the low level of bad debt down to the council’s “robust and structured recovery plan when it comes to recovering debt.” However, recovery measures had been halted due to the coronavirus pandemic.

“We are not chasing these debts at the moment but will be seeking to reinstate recovery proceedings,” he added.

The SIC's new finance director Jamie Manson.SIC finance director Jamie Manson.

A breakdown of council charges shows that rents amounted to £4.89 million of the total; the sales ledger – £52.58 million; non-domestic rates £26.33 million and council tax and Scottish Water – £13.07.

Although the sales ledger accounts for the biggest chunk of council charges, debt was only 0.1 per cent of this amount, or £43,117. A further £49,494 was written off under the council tax and Scottish Water heading; £71,427 in non domestic rates and £48,081 in housing rents.

The report says: “Essentially those debts identified for write off in this report are those where all efforts to recover the debt have been exhausted and the prospects of recovering funds are negligible or nil.

“It is emphasised that although these debts have been written off for accounting purposes the files remain open and every effort will be made to collect debts if circumstances change.”

Manson warned that the amount of debt could be expected to increase when the report was presented again this time next year.

One councillor said that the low level of debt was a “testament to the hard work and efficiency of local authority staff in the recovery of debts.”