Agenda item

(ii)        Annual Corporate Debt Monitoring Performance Report 2020/21

Committee considered a report of the Head of Finance & Resources which provided a summary of the Council’s corporate debt position as at 31st March 2021.

The main sources of income for the Council’s General Fund were business rates, council tax, a small number of government grants and service related income.  The main source of income for the Council’s Housing Revenue Account was dwelling rent, often referred to as ‘housing rents’.  Government grants were paid to the Council on agreed dates direct into bank accounts.

The Council had to request income it was due by raising bills for business rates, council tax and housing rents.  For service related income, invoices were raised, and examples of types of income included housing benefit overpayment, trade refuse, industrial unit rent, garage site rent, wardens’ service and alarms, and leisure hire of facilities.  This income was reported in two amounts with housing benefit overpayments identified from the rest.

A table in the report showed the sources of income for the Council as at 31st March 2021 and also 2020 for comparison purposes.

A second table in the report showed the level of arrears for the Council as at 31st March 2019/20 and 2020/21.  (This information was also published in the Council’s Statement of Accounts document each year).  Although 2019/20 was relatively unaffected by the Coronavirus pandemic, when the bad debt provision levels at 31st March 2020 were assessed, they were increased slightly in anticipation of the financial effect the pandemic would have on businesses and individuals in 2020/21. 

For 2021, business rates, council tax and housing rent arrears were £1.7m higher than in 2020.  From mid-March 2020 to end June 2020, the Council took no recovery action regarding debt collection.  From 1^st July 2020, ‘soft recovery’ began along with the other Derbyshire authorities.  This meant people who owed the Council money received extra letters offering help to settle what they owed over a longer period.

Based on this higher arrears figure for 2021, bad debt provision had been increased to £1.5m for 2022.  Business rates and council tax were shared between the Council and other preceptors for the County Council.  The Council’s share of business rates was 40% and for council tax it was 16.46% for this year and the rest spread amongst the other preceptors.

The Council had now reverted to pre-Covid processes and it was hoped to see a sharp increase in the number of businesses and individuals setting up arrangements to pay off their outstanding arrears as staff were once again contacting debtors and offering ways to help.  Indicators for debt collection were monitored through the ‘Perform’ system and reported at the quarterly performance meetings.  Targets for collecting income and reducing arrears for each class of debt were set and monitored.  The performance data on debt collection was also reported quarterly to the Executive for information where any areas of concern were raised. 

Moved by Councillor Graham Parkin and seconded by Councillor Chris Kane

RESOLVED that the Council’s Corporate Debt at 31^st March 2021 as set out in the report be noted.