Concern over rates debt which could be written off by council

A Tyrone councillor has expressed concern that almost £4 million in rates debt is at risk of being “written off”.

Members of Derry City and Strabane District Council were presented with a report on the council’s Quarter 3 financial outturn for 2024/25 at this month’s Governance and Strategic Planning committee meeting.

Lead Finance Officer, Alfie Dallas, noted that although Land and Property Service (LPS) forecast a small positive rates finalisation figure of £9,000 at the end of Quarter 3, there is “a significant risk of increased debt write off” with almost £3.92m of rating debt now older than three years old with £2.15 million of that sum being the “council share”.

“Accordingly council retains a provision of £2 million – and £350k recurrent – within its Financial Contingency reserve to mitigate these risks,” Mr Dallas said.

UUP Alderman Derek Hussey said that, while he was relieved that council had “backup if debts are written off”, he was concerned that this was “debt that could not be recovered”.

“Is that what we’re being told: if it’s older than three years it’s just going to be written off?” Alderman Hussey asked. “I would have concerns that they’re not being followed up.

“It’s a bit like the parking fines scenario that was highlighted publicly, whereby if you went long enough your parking fine will just be written off, so I would be a bit worried about that.”

Mr Dallas clarified that the figure was not confirmed to be written off, but once the debt existed for three years there is a “higher risk of it being written off”.

He added: “LPS are still going through the processes for collection of that and we expect some of that to be collected, because some of those debtors will be under payment plans and things like that.

“It’s an estimate of what sort of provision we need to keep but all that debt won’t be written off, nor have LPS confirmed it to be written off.

“They write off a certain amount of debt every year when they’ve exhausted the process, so it’s an estimated figure but not actually confirmed.”

Alderman Hussey concluded: “It’s disappointing that there are people who are not paying their rates in the way the vast majority throughout our council area are, but it is what it is.”