Colchester: Council to write off �250,000 worth of bad debts

The move to write off the money owed to Colchester Borough Council was brought under review by a group of Conservative councillors at a meeting of the finance and audit scrutiny panel on Wednesday.

Cllr Jackie Maclean, who asked the scrutiny panel to look at the decision, said: “This is a travesty because this money belongs to the people of Colchester.

“I run a business and I know how difficult it can be to recover money, but in business if we don’t recover bad debt then we would go bust. It should be no different in the council.

“Every bad debt should be pursued long before it becomes a serious problem. Writing off a quarter of a million pounds of Colchester’s money is appalling, shame on the Lib Dem-led coalition for letting this happen.”

The total debts of �262,253 to be written off are made up largely of unpaid business rates, but they also include more than �20,000 of overpaid housing benefit and about �14,000 of other debts.

The Conservative members who ‘called in’ the decision were Jackie Maclean, group leader Kevin Bentley, Andrew Ellis, Sue Lissimore and Pauline Hazell.

They said: “In such stringent financial times every penny owed to the council should be chased and not simply written off without a care in the world.”

Paul Smith, Liberal Democrat councillor responsible for resources and diversity, defended his decision to write off the bad debt.

“To put this into perspective the council collects about �56 million in business rates, so the amount written off is relatively small – about 18p for every �100,” he said.

“Last year we had the best collection rates of any council in Essex and this year we are looking to do even better.

“No one likes bad debts, but in this environment we have a pretty good record.

“The money that has to be written off is primarily companies going into liquidation and have no assets left for us to pursue.”

The scrutiny committee voted in favour of Cllr Smith.