Authority to Write Off Debts and Obsolete Stock
Perth and Kinross Council · 24 June 2026
Back to Finance and Resources Committee — 24 June 2026 and its agenda
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Our vision is a Perth and Kinross where everyone can live life well, free from poverty and inequality ___________________________________________________________________ Committee: Finance and Resources Committee Date of Meeting: 24 June 2026 Report Title: Authority to Write Off Debts and Obsolete Stock Report Number: 26/183 Report Author: Andrew Craig, Financial Systems Team Leader Organisational Lead: Scott Walker, Chief Finance Officer ___________________________________________________________________ 1. Purpose 1.1 This report seeks approval to write off identified debts in respect of Sales Ledger; Council Tax (including Water & Wastewater charges); Non-Domestic Rates; Irrecoverable Rents; Housing Benefit Overpayments and Car Park Trading Account Income. In addition, approval is sought to write off obsolete stock and other miscellaneous balances. 1.2 Sections 1. Purpose 2. Recommendations 3. Background 4 Proposals 5. Conclusion 6. Impact and Value Assessment 7. Appendices 2. Recommendations 2.1 It is recommended that the Committee is requested to: 2.2 Approve that the amounts detailed in Section 4 and included in Appendices 1 to 5 are written off for accounting purposes. 2.3 Note that whilst these amounts are written off, the files are not closed, and every effort will be made to collect outstanding debt where recovery is cost effective.
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3. Background 3.1 In order that the appropriate entries may be made in the Council’s unaudited Annual Accounts for the year ending 31 March 2026, it is necessary to consider the write off of debts, obsolete stock and other miscellaneous balances. 3.2 To accommodate year end accounting processes and timescales, some of the Council’s systems have already been amended to reflect the proposed adjustments, pending approval by the Committee of the recommendations within this report. 3.3 The debts included within this report have progressed through the Council’s debt recovery process using the various legislative procedures available for each category of debt to collect the amounts outstanding. The amounts that remain due, after exhaustive recovery procedures have been undertaken, are included within this report for write off as a last resort. Should any additional information be received, the debt will be written back. Every effort is made to collect outstanding debt where it is cost effective to recover. 3.4 This report includes all the recommended write off and on amounts for financial year 2025/26 3.5 The Council continues to support engagement with customers throughout the debt recovery process, particularly because of current increases in the cost of living. For individuals and families, this includes sign posting customers to the Council Tax and Housing Benefits; Welfare Rights and Tenancy Support teams to ensure that they have access to appropriate advice and support in claiming entitlements and maximising household income. 4 Proposals Sales Ledger 4.1 Appendix 1 details sales ledger debt which it has not been possible to collect for various reasons. Sales ledger debt relates to outstanding income from fees and charges levied for Council services including commercial waste and residential & non-residential care. Many of these debts have been placed with Sheriff Officers, including instances where debtors are deceased or untraceable. 4.2 The Council has introduced several measures to maximise income collection including “set-off” (which, in certain circumstances, allows the Council to apply customer debt against payments due by the Council) and encouraging customers to pay at point of sale, therefore, reducing cost of collection and the level of debt. Appendix 1 also includes the debt recovery process for sales ledger debt. 4.3 After consultation with Services who raised the original invoices, it is recommended that the Council write off £406,565 as shown in Appendix 1. This amount includes debt relating to seventeen financial years from 2011/12 through to 2025/26. A comparison between the current and the previous financial year is shown below.
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Write off By Strategic Lead Total 2025/26 Total 2024/25 Chief Executive Children Family and Justice Economy, Development and Planning Education and Learning Environment and Infrastructure Finance and Business Support Housing and Communities Property Services Strategic Planning and Performance Health and Social Care £0.00 £3,127.61 £1,273.50 £1,382.58 £5,413.24 £45.00 £102,054.86 £2,568.60 £0.00 £290,699.70 £1,440.00 £11,985.13 £1,674.50 £4,618.30 £11,908.33 £158.18 £181,072.37 £3,735.48 £1,141.53 £154,086.35 £406,565.09 £371,820.17 4.4 The total provision for bad and doubtful debts included within the Council’s unaudited 2025/26 Annual Accounts for sales ledger debt at 31 March 2025 was £1,488,296. The total value of sales ledger invoices raised in financial year 2025/26 totalled approximately £28.12 million and the proposed write off for all years represents approximately 1.45% of this amount. 4.5 In most instances, accounts raised between 1 April 2024 and 30 September 2024 carry a 50% provision whilst those raised prior to 31 March 2024 are fully provided for. Where debts fall into this category, part or all of the amount to be written off will be met from the provision. 4.6 Where no provision or only partial provision has previously been made, the balance of the write off will be charged against the issuing Service’s Revenue Budget for 2025/26. Council Tax and Non-Domestic Rates 4.7 Appendices 2 and 3 includes the debt recovery processes for Council Tax and Non-Domestic Rates respectively. To maximise levels of collection and reduce collection costs, the Council continues to promote the use of electronic forms and payment by direct debit. Approximately 78.5% of council tax customers currently pay by direct debit. 4.8 Appendix 2 details Council Tax (including water and wastewater charges) where the sum of £2,368,919 has been deemed uncollectable (£600,816) in 2024/25). There is an overall provision for bad and doubtful council tax debt of £18,195,012 as at 31 March 2025. 4.9 This is a significant increase due to a one-time exercise to write off all debt from 1993 to 2005 where the Council had no legal right to pursue. This planned and targeted exercise ensures that the Council is acting in accordance with changes made via the Prescription (Scotland) Act 2018 that came into force on 28 February 2025. 4.10 Going forward this will be an annual exercise looking at one year at a time where a period of 20 years has elapsed since the debt became enforceable.
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4.11 The total amount of Council Tax billed for financial year 2025/26 was £148 million (including Water and Wastewater Charges), with an in-year collection rate of 97.5% (97.3% in 2024/25) and represents approximately £13 million more income than the previous year. This is a high collection rate which is expected to be amongst the best in Scotland for 2025/26. The proposed write off represents approximately 1.6% of the amount billed 4.12 The proposed write offs relate to the last 33 financial years during which time the Council has raised over £2 billion in Council Tax and has continually delivered high collection levels. The proposed write off for all years represents 0.1% 4.13 Appendix 3 details Non-Domestic Rates income totalling £683,613 which it has not proved possible to collect for the reasons shown in the appendix (£381,385 was written off in 2024/25). 4.14 As with Council Tax, this represents a significant increase and is due to a one- time exercise to comply with the changes to debt prescription regulations. 4.15 In terms of write offs relating to Non-Domestic Rates the costs are met by the Scottish Government through the “pool” mechanism. The provision for bad and doubtful Non-Domestic Rates debt was £ 1,507,244 as at 31 March 2025. 4.16 The amount recommended to be written off for all years represents approximately 1% of the £68.5 million of non-domestic rates income raised in financial year 2025/26. The in-year collection rate for non-domestic rates was 97 % for 2025/26 (97.1% in 2024/25). 4.17 These proposed write offs relate to the last 31 years during which time the Council has billed just under £1.5 billion in Non-Domestic Rates and has continually delivered high collection levels. 4.18 Appendices 2 and 3 also include accounts where the balance is for a small value either in debit or credit (£0.99) for Council Tax and Non-Domestic Rates. It is uneconomical to collect or refund/transfer such small amounts and, therefore, an automated process is in place to adjust these accounts. Housing Revenue Account (Rents) 4.19 Appendix 4 details rent charges raised in respect of former tenants and court expenses incurred which it has not been possible to collect for the reasons set out. 4.20 A comprehensive review of former tenant arrears has been undertaken within Housing & Communities which has identified a requirement to write off housing rent of £233,964 and £38,381 for sequestrations (£241,884 was written off in 2024/25). The provision for bad and doubtful Housing Revenue Account debt was £1,922,727 as at 31 March 2025. The in-year collection rate for Housing Rents was 98.7 % for 2025/26 (100.17% in 2024/25 for a 53 week collection year). 4.21 Authority is also requested to write off outstanding arrears on garage sites and lock ups of £7,986 (£2,577was written off in 2024/25).
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4.22 The overall proposed write off for the Housing Revenue Account is £280,331 (including sequestrations). The total rent charge raised in 2025/26 was £35,535,241, with the proposed write off for all years representing 0.79% of this figure. Housing General Fund 4.23 Appendix 5 details charges for those housing services administered through the Council’s rent system, provided to homeless clients placed in temporary accommodation. These tenancies have ended, and it has not proved possible to recover outstanding income, in part, due to the vulnerable nature of the client group. 4.24 Authority is requested to write off £44,120 for the period 1 March 2025 to 28 February 2026 (£19,456 was written off in 2024/245) for rent and service charges for housing services provided to homeless households placed in temporary accommodation. The provision for bad and doubtful debts in relation to this activity was £374,825 as at 31 March 2025. The total rent charge raised for the period was £266,467 with the proposed write off (including sequestrations) representing 16.56% 4.25 Authority is also requested to write off Housing Benefit overpayment debt of £30,467 for 2025/26 (£50,599 was written off in 2024/25) which it has not proven possible to recover. The provision for bad and doubtful Housing Benefit overpayment debt was £929,805 as at 31 March 2025. The total value of Housing Benefit overpayments in 2025/26 was £264,484 and the proposed write off value for all years represents 11.5% of this amount. The recovery of Housing Benefit payments, however, remains an ongoing process and £298,742 was recovered in 2025/26 which includes former debt. Car Park Trading Account Income 4.26 Authority is requested to write off £512,047 in respect of Car Park Trading Account Income (£438,426 was written off in 2024/25). This amount equates to all amounts charged and still outstanding in relation to the period prior to October 2024. The provision for bad and doubtful Car Park Trading Account debt was £610,539 as at 31 March 2025. The proposed write off is equivalent to 15.57% of the number of Penalty Charge Notices issued during 2024/25 (13.97% in the previous financial year). Stock Write Offs 4.27 Authority is requested to write off obsolete stock of £3,000 in respect of vehicle parts at Friarton Depot (£3,000 was written off in 2023/24). Full provision has been made for this write off. Outstanding Balances 4.28 Authority is requested to write off outstanding balances over various accounts. These balances relate to transactions before 31 March 2025. The net amount of the outstanding balances is a write off to the general fund totalling £12,077 (£1,264 was written off in 2024/25).
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5. Conclusion 5.1 In all the above cases it has either not been possible to recover outstanding monies due to the Council or to utilise stocks held by the Council. The write off debt is only recommended after all means of recovery have been exhausted. Although the amounts will be written off for accounting purposes, the files are not closed, and every effort will be made to collect the outstanding debt where new information becomes available and where recovery is cost effective.) 6. Impact and Value Assessment 6.1 This is an operational report, and as such, an impact and value assessment is not required. 7. Appendices Appendix 1 - Sales Ledger debt written off in financial year 2025/26 by year and reason. Appendix 2 - Council Tax debt written off in financial year 2025/26 by year and reason. Appendix 3 - Non-Domestic Rates debt written off in financial year 2025/26 by year and reason. Appendix 4 - Irrecoverable Rents written off in financial year 2025/26 by year and reason. Appendix 5 - Homeless debt written off in financial year 2025/26 by year and reason.