General Debtors Write-Off 2022-23
North Lanarkshire Council · 14 September 2022
Back to Finance and Resources Committee — 14 September 2022 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
Page 1
North Lanarkshire Council Report Finance and Resources Committee Does this report require to be approved? ☒ Yes ☐ No Ref EK/NL Date 14/09/22 General Debtors Write-Off 2022/23 From Elaine Kemp, Head of Financial Solutions E-mail kempe@northlan.gov.uk Telephone 07939 280 601 1. Background 1.1 The Council issues invoices annually with an approximate value of £115m. Of this approximately £5m relates to Financial Solutions, which mainly consists of: - • Strategy & Corporate Resources; • Home Insurance; and • Housing Benefits Overpayments 1.2 There continues to be an appraisal of the outstanding balances to assess those which are deemed uncollectible. This annual process conforms to Best Practice and is underpinned by a systematic approach to recovery and a realistic assessment of the expected collection of outstanding balances. Executive Summary The purpose of this report is to present to Committee a summary of outstanding debtor accounts which are deemed uncollectable following all attempts at recovery or are not economically viable to pursue. In accordance with financial guidelines a bad debt provision has previously been established for the outstanding accounts highlighted in the report. Recommendations It is recommended that Committee: (1) Note the decision of the Head of Financial Solutions, under delegated responsibilities, to write-off £9,490.11 for debts under £500. (2) Approve the write-off of £83,001.57, which includes debts greater than £500. The Plan for North Lanarkshire Priority Improve North Lanarkshire's resource base Ambition statement (21) Continue to identify and access opportunities to leverage additional resources to support our ambitions
Page 2
2. Report 2.1 An analysis of the outstanding balances has been conducted and £92,491.68 has been identified as uncollectible. The write-off can be analysed and compared to the prior year as shown in the table below: 2021/22 2020/21 Benefit Overpayment £92,491.68 £294,803.93 Other Services £0.00 £0.00 Total £92,491.68 £294,803.93 2.2 The reduction in the debt proposed for write-off for 2021/22 compared to prior years is reflective of reduced debt recovery activity during the height of the Council’s Covid response. This had a particular impact on the work done on benefit overpayments as the Council focussed on supporting business grants, creditors payments to businesses and administering individual supports such as the Self Isolation Support Grant. It is anticipated that the value proposed for write-off will increase in future years as recovery action has returned to normal levels. 2.3 In accordance with the Council’s approved Financial Regulations, the Head of Financial Solutions has exercised powers to write-off those balances which are under £500, which represents £9,490.11 of the sum identified in paragraph 2.1. 2.4 An analysis of the total write-off proposed is included in Appendix 1. There are a number of reasons why the outstanding balances are being written off and these are summarised below: • Deceased. The debtor is deceased and there have been insufficient funds within the estate to meet the sum due. • Liquidation/Sequestration. The debtor/business has been liquidated/sequestrated etc., and there is no prospect of recovery of funds. • No Trace/Gone Away. The debtor has been unable to be located and there is no prospect of recovery of funds. • Small Balances/Uneconomical to pursue. There are insufficient funds or no realisable assets that are available to meet the debt and it is uneconomical to continue to seek recovery of the sum due. • Recovery Exhausted. There are insufficient funds or no realisable assets that are available to meet the debt and all appropriate recovery opportunities have been exhausted. 2.5 Whilst approval is sought to write-off the sums within our financial systems the Council will continue to monitor the situation and if circumstances change then recovery of the sums due will be reassessed. 3. Measures of success 3.1 Debt recovery will remain a priority for the service however where necessary adequate provisions will be made for uncollectable debt to ensure there is no budgetary impact.
Page 3
4. Supporting documentation Appendix 1 Debt Write Off Summary Elaine Kemp Head of Financial Solutions
Page 4
5. Impacts ( http://connect/report-template-guidance ) 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality-and-fairer- scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☒ No ☐ If Yes, have all relevant financial impacts have been discussed and agreed with Financial Solutions? All have been agreed Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? There are no additional financial implications for the current year because a corresponding bad debt provision has been included in previous year’s accounts. 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts have been discussed and agreed with People and Organisational Development? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ If Yes, have all relevant legal impacts have been discussed and agreed with Legal and Democratic Solutions? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐
Page 5
5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Where the impact identifies a requirement for technology, has an assessment been carried out (or scheduled) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☐ No ☒ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed?
Page 6
Appendix 1 Debt Write Off Summary Cause Analysis £ Deceased 614.61 Liquidation/Sequestration etc. 81,940.24 Gone Away/No Trace 1,976.49 Small Balance/Uneconomic to pursue 229.99 Recovery Exhausted 7,730.35 Total 92,491.68 Value Analysis £ < £500 9,490.11 >£500 83,001.57 Total 92,491.68