Council owed £229m in unpaid debt amid bankruptcy fears

Recovery activity, such as issuing reminders and taking enforcement action, was paused for 18 months because of Covid-19

Bristol City Council is owed £229m in unpaid debt, included nearly £52m of council tax it has failed to collect.

However unpaid invoices account for much of the debt - £88.6m - and £30.9m of this is not due until next year.

Bristol City Council revealed the figure - which also included rent arrears and clean air zone (CAZ) charges - in a report to the strategy and resources policy committee on Monday.

Other reasons cited in the report are cost of living pressures and payment delays caused by court backlogs and additional reminder notices.

Financial arrears

It comes just a month after council leader Tony Dyer warned that the organisation could be declared bankrupt if it could not find savings to plug a £22m budget shortfall this year.

The figures reveal that as of 31 March this year, tax arrears stood at £51.9m, up from £50.5m on 1 April 2023, and comprised nearly a quarter of all the debt.

There were also unpaid CAZ charges worth £32m, and more than £4m in outstanding penalty charge notices (PCNs) for parking infringements and bus lane encroachments.

The report also stated that almost £19m in overpaid housing benefits had not been recovered by the council, while £15m of rent and other fees had not been paid by current and former council tenants and leaseholders.

In addition, the authority has written off nearly £19m of debt that it concluded it would never recover, including £5m of council tax and £3m in CAZ fines.

Council leader Tony Dyer recently said Bristol City Council's financial situation is "very challenging”

The report said "aged debt becomes increasingly difficult to collect for several reasons", including a greater likelihood in a change of the debtor’s financial circumstances, whether they have moved, or they may question the legitimacy of the debt.

It added: “Cost of living pressures are clearly continuing to impact and we are endeavouring to maximise the support we are able to offer through new initiatives and processes."

These initiatives include replacing the premium rate phone line for making payments, more support and advice for those struggling with unmanageable debt, and hosting regular debt clinics.

It said the council only used bailiffs - now called enforcement agents - when there was “no other identified recovery activity available or where those in debt are not engaging”.

Measures will be taken using third parties to proactively identify the distinction between those who "can't pay" and those who "won't pay", to ensure collection and recovery measures are focused appropriately.

The report said the figures represented a snapshot in time and that the numbers fluctuated.