Caerphilly County Borough Council has written off debt worth almost £700,000.
The owed money, covering the period April to September 2011, includes outstanding council tax, rent, business rates and overpaid housing benefits.
According to a report considered by the council’s Policy and Resources Scrutiny Committee, a total of £696,257 that was owed was written-off.
The report said: “The Council collects very large sums of money from residents and local businesses. In excess of £150m is collected each year and inevitably there are instances of non-payment. A ‘firm but fair’ approach has always been adopted and all legal means are pursued to recover monies owed.
“The regular writing-off of uncollectable debts is an important financial discipline. The council
would be criticised by External Audit if debts remained in the accounts when there is little
likelihood of recovery.”
The report also explained that because of the size of individual debts, it would cost more to recover them than the debt was worth.
Between April 1 2011 and September 30 2011 the following debts were written-off.
| Amounts written off (£) | Total Budgeted Income/Grant 11/12 (£) | % of Total Income/Grant written off 11/12 (part year) | % of Total Income/Grant written off 10/11 (full year) | |
| Council Tax | 194,059 | 56.1m | 0.3 | 0.5 |
| Business Rates | 217,023 | 37.1m | 0.6 | 1.1 |
| Council House Rents | 162,677 | 45m | 0.7 | 0.43 |
| Sundry Debts | 75,387 | 9.2m | 0.8 | 1.1 |
| Overpayments of Housing Benefits | 47,111 | 69.5m | 0.1 | 0.1 |
I see that the right-off doesn't include the money that was foolishly invested in Iceland!
Wayne David is 'Smack on the money' with that one. The money invested in Iceland was lost due to an over developed sense of financial sophistication by the council. They trot out the argument that any criticism is in hindsight; wrong. Any cautious investor, which I believe a council should be, would never have invested our reserves in Iceland. They were a country, like Greece, Ireland, Portugal, Italy, etc, that glowed red with fiscal warning signs.
I noticed that Lindsay Whittle, when he was leader, appeared in the council propaganda sheet (Newsline) holding a false cheque for the money that has been returned.
I believe that this was just a stunt, if I am wrong please could the council correct me. I am sure that of the £15,000,000 that Plaid Cymru gave to the Icelandic banks not one penny has been returned. I look forward to Newsline publishing a front page story on how much money has been returned to the hard pressed voters of Caerffili from their council's foolish speculative adventure.
These are very interesting figures, for that is what they are, real money, not statistical numbers, and, whilst there can be some justification for `writing off` uncollected debt owed to the Council, there can be no real justification for the maladministration which must be involved in the `overpayment` of ratepayers money to those to whom it is not was owed, £47,111.00p almost £50,000. this is almost equal to the State Pension income for 20 single pensioners, each, for a year.
What gives the Councillors the `Right` to absolve themselves from such costly `mistakes` of maladministration by writing off the `mistakes` to balance the books?. This, it is noted, was for mistaken payments to members of the public between April and September this year, in housing benefits, we are now in November, and, I am wondering Why Councillor Colin Mann, the Councillor responsible to us, the public, for all things financial in the Caerphilly council, has not ordered a proper recovery programme to ensure that those people who are walking the streets of the borough with bundles of public cash in their pockets, to which they are not entitled, pay it back?
I am wondering if what appears to be a dilatory and cavalier attitude to public governance involving OUR public money, which Plaid Cymru applied to the £15,000,000,00p sitting in some financial Gnomes Bank account in some Northern Atlantic Country, has now become the ` norm` in respect to the way Caerphilly Council view their financial responsibilities to the ratepayers of the Caerphilly Borough? It seems so.
It will be interesting to see how much the Council will have maladminitered by the end of May next year, on these lines, and if they take no action to ensure the money is repaid, or that staff do their jobs properly, we could potentially be looking at almost £100,000 given away to bad causes.
Typical of the Labour ill informed to jump on the band wagon again. The annual situation of having to write debt off is nothing new, all authorities and business have to do similar accounting practices. Its unfortunate that the ill informed cannot see that the debt write down is 2.5%,and is less than the previous year 3.23%.
The financial difficulties that people and businesses face in the current climate is ultimately not the Councils fault but a national concern, and if anyone wants to point the blame, just take your pick from Brown, Blair, Cameron, Clegg.
Iceland is a great topic for hindsight when over £840 million in cash from more than 100 UK local authorities was invested in Icelandic banks the officers were doing no different from similary advised authorities, and I would question what alternative trtategy any other administration would have taken at the time.
Caerffili has already received a substantial amount of the invested money back, and will continue to receive over the coming years.
Caerphilly Council Cabinet Member James Fussell is probably correct when he highlights the fact, that Companies, write off bad debt from preceding years trading, this is usually to recover VAT and other obscure reasons best only known to accountants. And ,in fairness to him he appears to want to explain the position to the ratepayers hence his comments.
But, of course, there is a great difference when private Companies to do so compared to a Local Authority doing so, the difference being that in Caerphilly council`s case the money, which is lost, does not belong to those who `write it off` it belongs to the ratepayers, Councillors so easily sometimes forget their transient, impermanent role in politics, and of course Labour Councillors had to wake up to that same realisation when they lost the stewardship of our Council to Plaid Cymru four years ago.
This report, if accurate, states that this money was uncollected between April and September 2011? we are only in November 2011 now, so why have the Council given up on this matter so soon?, 8 weeks, this does not make accounting sense, particularly, in a time of deep recession, when you consider that most people and firms can take longer than that to pay their bills.
It is also disconcerting to see that the Council have made almost £50,000 of mistakes in overpayments in housing benefit, also during the period April to September 2011, and the Council appear to have given up on recovering those overpayments after only 8 weeks or so.
None of this makes real sense, but, could this be a `ploy` in order to ensure similar news, but statistically twice as bad, doesn’t come out next year, i.e. at the end of the financial year and weeks before the Caerphilly council elections?. Writing off 1.4 million pounds would make depressing news Mr Fussell.
I notice Mr Fussell has not made any comments about this write off of overpayment's which the council have made, but more importantly, why that money was overpaid in the first place, i.e. who`s fault was it, was it the claiments, or, did the council make the mistake, and, if any recovery actions are still being taken, or, have the ratepayers of the borough `kissed` that money, goodbye too?.
Comment made under the Arthur comment above
Good to see Cabinet Member Colin Mann, who is the real man to speak on behalf of the Caerphilly Council on all matters Financial, taking an interest in the previous statement made on this site by his Plaid Cymru Colleague James Fussell in respect to the Iclandic Millions.
So, what is exactly the "Substantial" amount of money the ratepayers have received back from the £15,000,000, Plus interest of course, mentioned in Mr Fussells statement :-
"Caerffili has already received a substantial amount of the invested money back,". says Mr Fussell.
This is of course a matter of public interest, It would be appreciated if one or other of these Cabinet Members can provide the exact figure?.
This was published last year…
http://www.caerphillyobserver.co.uk/news/932/caer…
The latest, according to the council's financial account (year ending March 2011), is that £11.29m will be recovered from the £15m. The report does state that the final figure could be much higher depending on the final settlements.
http://212.219.240.82/stellent/groups/public/docu…
Thanks Ed.
But it is still in the public interest for the Council to let us all know HOW MUCH HAS BEEN RECOVERED (PAID BACK) TO DATE, it would then be for the ratepayers to decide what they consider about it.
It seems that my previous comments didn't surface so please allow me to comment again.
Can I first make it clear that I am reluctant to write off even one penny of public funds unnecessarily and I have already asked a number of questions about the various elements of this write-off. Writing-off any amount is definitely a last resort.
At the same time, as mentioned in the report this sum represents a very small percentage of the total turnover of Caerffili CBC – around £500 million per annum.
Arthur ??? questions the Icelandic situation. In another (public)report to the same committee an update was given that around £6.5 million of the money has in fact now been returned to the council. Latest estimate is that around 85-90% of the total will be repaid.
Many people of course benefit from the 20-20 vision of hindsight – not so many voices were raised at the time. It is a fact that well over 100 public authorities, including the Audit Commission and others in Wales, made the same investment decisions as Caerffili CBC.
I am surprised that Richard Williams made a comment that nothing has been returned – he is obviously not familiar with the facts. Making completely innacurate statments without recourse to the facts does nothing for proper debate or discussion.
Finally, if Arthur really feels that the council is guilty of maladministration – a serious charge – he should report this fact to the council's auditors. If not, he should apologise for this remark.
In reply to Cllr. Mann could he please inform readers on what date(s) £6.5 Million was credited to the account of CCBC from the Icelandic banks? I cannot find reference to this amount in any of the published financial reports of the council; all I found were projections, based on all going well with the bank's administrators and the governments involved. I am more than happy to be corrected on this as the money belongs to all of us in the borough.
One of the banks the council invested our money in, Landsbanki, is only worth a third of its debts. Given the Icelandic people's understandable opposition to handing their money over to foreign creditors I wonder how we are to be recompensed?
I am also puzzled by the figure of £500 M as council turnover. The sum of just under £314 M was given as the annual budget to the recent viewpoint panel. Where does the other £184 M come from?
With regard to the wider issue of whether councils should be permitted to embark on highly speculative foreign investments I am firmly of the opinion that the wrong decision was made. To imagine that a country like Iceland, with a good fishing industry but little else, could act as guarantor for banks such as Landsbanki, Kaupthing, etc, who were offering unrealistic terms on investment, is a monumental act of faith. It is categorically not hindsight, 20/20 vision merely sound common sense. This is why I, and nobody I know, either invested in or bought shares in these institutions.