Cherwell is to write off over £2m in bad debts from Banbury area homes and businesses

The council’s Executive committee is to rubber stamp the writing off of £2.044m in bills that have not been paid over the years from 2001-2 to 2023-4. The debts come from unpaid council tax and business rates.

During that time the council has raised £1.809bn in council tax and £1.559bn in business rates - a proportion of .06 per cent in each case.

In a report to the Executive’s next meeting on Monday, financial officers say every effort has been made to collect the outstanding money and they will continue to seek recovery if it should become feasible in the future.

"The debts will still exist and the council would remain entitled to chase for them, subject to applicable limitation periods under the Limitation Act 1980, generally six years,” they said.

The council uses various means to recover outstanding debts including tracing agents, visiting the property and contacting the occupants as well as cross – referencing other internal databases.

The council’s financial procedure rules require that recommended write offs with an outstanding balance of £5,000 and above for council tax, overpayment of housing benefit or sundry debtors, and £10,000 and above for business rates must be approved by the Executive.

There are certain circumstances where it is practically or legally impossible to collect outstanding debts owed to the council. This includes cases where the debtor has gone into liquidation, been declared bankrupt, has died or has left a property without trace and all reasonable efforts to trace them have proven unsuccessful.

The officers’ report said in some cases recovery was not possible because individuals had returned to their country of origin and fallen outside jurisdiction for further enforcement action.

In cases of insolvency or bankruptcy the legal processes involved mean the debtor cannot have alternative action taken against them. Occasionally the council receives nominal payments but these leave substantial balances outstanding and the recovery process has been exhausted.

Some debts fall outside the limits of collection time and sometimes it is uneconomical to pursue debts of low value.