Sandwell Council writes off £10 million of business debts

The cash-strapped authority has also written off another £1.7m of council tax in the borough in the last five years.

During the last financial year alone, almost £4m in council tax went uncollected, figures showed.

But finance chiefs said they were committed to claiming as much of the owed money as possible and stressed the authority has one of the best collection records in the West Midlands.

Sandwell Council is owed £3.8m in council tax from 2014/15 on top of £2.8m from the previous year, £1.9m from 2012/13, £1.5m from 2011/12 and £1.4m from 2010/11.

During the last two years the council has given up on £1.1m of unpaid council tax.

Around £750,000 was also written off during the previous three years.

Bosses insisted they only consider writing off council tax debt when all other options to try and retrieve it have been exhausted.

A massive £2m of business rates was written off during 2014/15, coming just 12 months after the authority cuts its losses on another £2.2 million.

That came after £6.2m of business rates was written off between 2010/11 and 2012/13, proving costly for an authority which is trying to save £38m.

However, chiefs said lost business rates were normally caused by companies going bust and so was outside its control.

In addition, around £3.3m in business rates are still owed from across Sandwell.

The council's finance chief and deputy leader Steve Eling told a recent cabinet member that the authority was almost at its target for collecting tax from residents and businesses so far this financial year but stressed the importance of ensuring as much as possible is paid.

Councillor Eling said: "There are various ways money is collected in. Some people are on a payment scheme and pay so much a week.

"As long as the money comes in in the finish, that's the main thing. Our in year collection rate is the best of all our neighbouring authorities. Inevitably, there are always some people who pay late and we continue to pursue that money. If people are having difficulty and need to come to an arrangement to pay off their debt, we will do that.

"There is no point putting people through hardship, that just creates further problems."

The figures, which were revealed under the Freedom of Information Act, showed that the council has gradually been clawing back money owed in council tax from previous years – though is still owed at least £1.4 million for every year going as far back as 2010/11.

However, the authority has been forced to admit defeat over significant sums it is owed from businesses.

Councillor Eling said: "Banks are envious of us because of how much we collect and write off compared to financial institutions.

"But business rates are a different matter. A number of businesses have gone bust in recent years owing money that will never come in. In fairness to people in Sandwell, the vast majority of people pay on time."

Councillor Eling believes the authority is on track to meet its target on how much council tax is collected across the borough during this financial year.