Lancashire's struggling authorities are owed millions in unpaid council tax and business rates

Millions and millions of pounds are owed to cash strapped councils by residents who haven’t paid their council tax, or businesses who haven’t paid their rates.

Thursday, 31st December 2020, 10:30 am

Frustrated authorities have been unable to do anything about the cash owed to them so far this financial year as no summonses or liability orders have been able to be issued by recovery teams due to COVID-19.

Data from a Freedom of Information request to seven authorities shows in Preston alone, £5,160,440 was owed by the end of the 2019/20 financial year as 2,338 people failed to pay their council bills.

As the financial year ended a month or so into the coronavirus pandemic, those figures aren’t likely to have fully been impacted by Covid-19.

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Millions is owed to authorities

The data shows the number of dodgers in the city spiralled by 193.35% in the last two years, as in 2017/18 year 797 people didn’t pay up.

Further cash is owed to the council by 214 businesses in the city that failed to pay rates in the last financial year - a 282.14% increase from two years ago when 56 firms failed to pay.

Councillor Martyn Rawlinson, cabinet member for resources and performance, said: “Council tax of £80m per year is collected from 65,000 households and the vast majority of people, in fact approximately 93% pay in the year that it is due and overall 99% pay in the longer term. It helps to pay for vital public and local services including schools, roads, social care, Police and Fire Service. However, invariably there are arrears at the end of the year for a variety of reasons, which we continue to collect in the longer term.

“For those who are genuinely struggling to pay their bills, we can offer more flexible terms and personal debt advice and would urge people to get in touch so that we can advise them of their options. However, there are a small minority of people and businesses who simply refuse to pay and the Council is committed to pursuing those debtors by using lawful powers available to us in order to obtain payment, no matter how long that takes.”

Council tax pays for essential services that are delivered to all residents, such as schools, rubbish collection, roads and street lighting.

The Money Aware debt advice website says council tax arrears are a big issue for clients, and in the first half of 2018, almost a third of people approaching them for help were behind on their council tax bill - more than any other household bill.

Council Tax arrears is a ‘priority debt’ and if ignored, residents can be taken to court and made to pay what they owe, plus costs and possible bailiff fees.

However, in Preston only 457 non payers were prosecuted at court in the last financial year.

A similar picture is painted in the neighbouring city of Lancaster, which saw a staggering 180.28% rise in people failing to pay their council tax, from 431 in 2017/2018, to 1,208 two years later.

The number of rate dodging businesses rose from 13 to 84. At present Lancaster City Council has £2,768,852 council tax outstanding for 2019/20 compared to £1,130,319 two years ago.

Only 337 people were prosecuted in the last financial year.

Blackpool Council revealed in 2019/20 6,582 households and 1,715 businesses had accounts with arrears, with a total of £5,589,944.55 owed, but the council pointed out its figures do not account for those who have since paid in full.

It says 12,857 people were prosecuted for non payment in the same period.

Coun Lynn Williams, Blackpool Council Leader said: “Some of these council tax and business rate payers will already have arrangements in place to pay arrears and others will be actively pursued when the council is in a position to start recovery action again.

“The council continues to collect debt for previous years where possible and this is reflected in the collection rates over 6 years, which at the end of 19/20 was 96.59%.

“It is evident that the level of arrears is indicative of the financial situation both residents and businesses find themselves in at the moment but the council is committed to continuing to provide priority services despite the challenges it faces in collecting arrears.”

In Chorley 362 people and 53 businesses did not settle their bill in 2019/20 - equating to £1,175,590.63 in council tax, and £405,783.71 in rates.

The authority has also revealed so far this year, 1,839 people and 141 businesses haven’t paid.

Fylde Council, South Ribble Borough Council and Wyre Council have so far failed to respond to the FOI request.