Liverpool City Council to write off more than £200m debt

Liverpool City Council has nearly £230m of bad or doubtful debts

Liverpool City Council has more than £200m in outstanding debt that it does not expect to recover, its interim chief finance office has said.

A report by finance boss Ian Duncan said he expects most of the debt will have to be forgotten.

Mr Duncan's report comes as the authority moves closer to finalising its budget for the next financial year.

Last week the council's budget proposals detailed a requirement to save £49m in the coming year.

Failed collection of council tax and business rates were among the main contributors to the council's bad debt position, the new analysis found.

The Local Democracy Reporting Service said Mr Duncan had set aside more than £270m to "cover the cost of known liabilities of previous years" in his assessment of the robustness of the budget estimates for 2023/24.

His report said "by far the largest amounts" are for bad or doubtful debts amounting to almost £230m that the council must either write off or not expect to be repaid.

The document said: "It is good practice to keep under regular review the need to write off bad debts, but this does not appear to have been done for some time. Consequently, the city council has some extremely old debt on its books, and it will be necessary to bring forward reports to formally write off debts."

The report said the city's share of business rates income had been set at £171m annually.

It said: "For each 1% not collected the cost is approximately £1.711m in lost income to the city council.

"While these estimates are robust the city council does have a low collection rate in comparison to other core cities, therefore significant focus of the Finance Improvement Plan has been placed on improving income collection and recovery."

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