Leeds City Council is having to write off millions of pounds in irrecoverable taxes and rent arrears as businesses and householders continue to struggle with the aftermath of the recession and biting budgetary cuts.
Figures obtained by the YEP show that the authority is writing off almost £6m in unpaid business rates for the 2012/2013 financial year. It is also abandoning its chase for £1.3m in council tax, and a similar amount in rent arrears for the same period. In 2013/14, meanwhile, around £2m in local taxes is being written off for the six months between April and September alone.
Irrecoverable arrears in rent from council tenants also increased to a similar amount in 2012/13.
Company failures, such as insolvency and dissolution, accounted for just under 80 per cent of the business taxes written off during 2012/13, although the figures do include some going back several years.
A recent council report also showed that the authority is abandoning its chase for £2m in unpaid council tax and business rates from April to September this year alone. It is also writing off £202,782.69 of irrecoverable rent arrears, represented by 440 different accounts. It is the seventh time already this year that the council has had to make an official ‘write-off’ decision on rent arrears.
Councillor Keith Wakefield, leader of Leeds City Council, said: “The difficult economic climate we are currently experiencing is having a big financial impact on businesses and households across the city. The result has been that many high profile businesses have closed over the past few years, meaning we have had no alternative but to write-off a large amount of business rates.
“When we ourselves are facing significant financial challenges, we don’t want to be writing off debts. Only when all other avenues of debt recovery have been exhausted will we reluctantly write off these arrears.
“It’s in everyone’s interest for us to collect as much council tax, business rates and rent payments as possible. For those who won’t pay, we have systems in place to ensure we recover those funds. We are also working hard with our partners to support businesses and generate jobs in the city.”