Council / Written off SIC debt rises to nearly £280k
THE VALUE of ‘bad debt’ from the last financial year being written off by Shetland Islands Council (SIC) has increased to nearly £280,000.
However this was only 0.27 per cent of the £101.52 million the SIC invoiced for in 2024/25 in areas such as housing rent, council tax and non-domestic rates.
A report presented to councillors on the SIC’s policy and resources committee on Monday highlighted how £170,877 was written off in 2024/25 in sales.
Another £63,688 was written off in council tax and water charges, while £59,300 was written off in housing revenue.
There is no proposed write-off for non-domestic rates.
Debts identified for write off are those “where all efforts to recover the debt have been exhausted and the prospects of recovering funds are negligible or nil”.
The total figure for the previous financial year was just under £220,000.
Finance manager Paul Fraser described the write-off process as a “technical arrangement” for accounting purposes.
He suggested the term “irrecoverable debts” is a bit misleading given that “all debts remain valid” and continue to be collected if possible.
But Fraser said some debts are five or six years old, adding that “each write-off is carefully considered”.
Shetland West councillor Liz Peterson said she was concerned there appeared to be three large sums of money being written in sales ledger.
In particular there were two cases where a total of £122,329 was written off.
Fraser said he could not comment on things which may identify individuals, but he said understood one case related to social care.
Speaking in debate, Peterson said she can find it difficult to tell the public the SIC cannot afford certain things while it is writing off more than £270,000 in debt.
“I think I really want to encourage Mr Fraser to ensure that his department focuses on getting as many debts paid as we can,” she said.
However Shetland Central member Davie Sandison said the statistics in context were quite positive and said officers are doing “extremely well” managing the situation.
He said there will always be scenarios where some debts are irrecoverable for a number of reasons.
Lerwick South member John Fraser also said in some cases there will be occasions where the amount of time and cost needed to try to recover a particular debt is not worth it.
He also said there would be reputational damage to the council if it were to pursue, for example, social care debts from a grieving family after the loss of a loved one.
Peterson reiterated that she was not suggesting the SIC does that, but said to the everyday person the amount being written off was a lot of money.
Rounding things off, Lerwick South councillor Dennis Leask quipped that perhaps shadow justice secretary Robert Jenrick – who recently released a video of himself confronting fare dodgers on the London Underground – could be tasked with chasing up debts.
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