Luton Borough Council set to write off more than £1.2m of historic housing-related debts this year

A total of £818,524.13 for 52 housing rent accounts was wiped off the statute book in private, earlier this year, with a further £421,527.36 in housing benefit overpayments between April 1999 and December 2020 also recommended to be shelved now by the local authority’s scrutiny finance review group.

A final decision will be made by the executive next month. The committee had disposed of the temporary accommodation debts behind closed doors in January.

Liberal Democrat Barnfield councillor David Franks asked for the information to be discussed in public, as long as individual names and addresses remain redacted, saying the only reason otherwise would be to save the council embarrassment.

LBC is responsible for the collection of national non-domestic rates, council tax, and adult social care and housing rents debt.

Permission is required from the executive to cancel individual debts valued at more than £10,000. A temporary accommodation report detailed the 52 individual debts above £10,000 written off under the council’s financial regulations.

“The current trajectory of the temporary accommodation debt collections shows consistent improvement every month, despite the cost of living crisis,” said the report.

“Despite a restructuring and recruitment process during this financial year, the team is improving its arrears collection. Historically, temporary accommodation didn’t have a ‘former accounts’ recovery team.

“Further pursuit of a debt isn’t possible in some cases for a variety of reasons, such as death, bankruptcy or liquidation, hardship and health issues which aren’t in LBC’s interest to pursue, court ordered remittance, uneconomic to recover, or local authority error.

“A record of debts written off, with the reason, is kept for six years. If there’s a realistic chance of recovery, a debt may be resurrected and pursued.”

Director of finance, revenues and benefits Dev Gopal told the review group: “The total benefit payments annually for the local authority are around £63m.

“If someone hasn’t declared something it’s difficult,” he explained. “But we’ve joined the fraud hub which can alert us to changing circumstances. Then it might be just two or three month’s overpayment, not years.

“If someone’s struggling, we’ll always help. We try to recover the debt for those who can afford to pay, as it’s money for the council. When we write off debts, it stays on our database.”

Finance portfolio holder and Labour Northwell councillor Rob Roche said: “Management of debt is something we’re considering, along with early intervention. We’re looking at maximising income and proper debt advice. It’s all part of the transformation programme.”

Labour Northwell councillor Babatunde Ajisola asked whether there was any mechanism in place to stop overpayments.

Mr Gopal replied that the system relies on a claimant informing the local authority of any change of circumstances, while some cases are taken to court.

Liberal Democrat Stopsley councillor David Wynn warned: “There are so many issues from the list that suggest we’ve some concerns about our systems for tracking this information.

“It strikes me that something is badly amiss with our ability to track these debts.”