Belfast Telegraph

£50m written off... anger at level of rates debt never paid

More than £50m of rates debt has been written off in Northern Ireland over a four-year period, the Assembly has heard.

The annual write-off has soared from £10.2m in 2009/10 to £29.1m in 2012/13 – and more than half of it is due to the recession, including bankruptcies, Finance Minister Simon Hamilton revealed.

The total amount of rates debt stands at more than £160m, which the DUP minister described as an "incredibly high figure" and "incredibly worrying".

The totals were revealed as MLAs were told of a "short, sharp" review already under way to examine the effectiveness of rates collection and how it can be improved.

Business consultants Ernst and Young were appointed to conduct the "strategic assessment", which is expected to be completed before the end of this month.

The millions of pounds written off in rates by the agency that is responsible – Land and Property Services (LPS) – could be spent on hospitals, schools, housing or other areas, MLAs were told.

"There is no doubt that many ratepayers are finding it increasingly difficult to meet their financial obligations," the Mr Hamilton added.

"More ratepayers struggling to pay increases the administrative burden of collecting rates. LPS has seen increasing numbers of bankruptcy and liquidations, which leads to debt being written off."

Sinn Fein's Daithi McKay, chair of the committee which monitors Mr Hamilton's department, said the committee was concerned that around £47m was written off between 2009 and 2012.

"That has increased year on year, so it is a problem that, unfortunately, is not going away," he added.

Mr Hamilton replied: "A lot of that debt that has been written off is the result of bankruptcies and insolvencies, and LPS simply cannot recover it.

"Last year it was 50% of the total debt write-off. This year, to date, that figure has increased to close to 60%."

The SDLP's Dominic Bradley said the rates owed amounted to a "huge loss of resource to public services".

Mr Hamilton responded, saying that the figure of £160m was "an incredibly worrying position".

But he added the focus on the £160m could mask the fact that, despite a difficult economic environment, LPS has also increased the cash collected by more than £125m since the 2008/9 financial year. And, he said, the proportion of court cases being initiated by LPS in the pursuit of debt had risen by around 10%.

"It is not something that we like to do or want to do, but it is something that, unfortunately, we sometimes have to do.

"So, it is about a combination of trying to work with people through payment arrangements while always having the option of going through a legal process to secure the debt via the court," added Mr Hamilton.

"LPS will always hold that option to itself, because, at the end of the day, it is legitimate debt that is pursued to get money into Executive accounts so that it can be invested for the betterment of health, education, housing and other public services."

FACTFILE

Amount of rates debt written off in the last four years.

2008/09 £5.8m

2009/10 £10.2m

2010/11 £15.2m

2011/12 £21.8m

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