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£7.3m Owed to Guildford Borough Council

Published on: 29 Mar, 2022
Updated on: 30 Mar, 2022

By Emily Coady-Stemp

local democracy reporter

Money owed to Guildford Borough Council is described by its officers as “abnormally high” and includes more than £2 million owed by commercial tenants.

Outstanding debt at the council is as a result of the authority not actively chasing debt during the Covid lockdown and a change in its financial system and debt collection.

GBC is owed £7.3 million, its corporate governance and standards committee heard on Thursday (March 24), some of which is covered by payment plans with those who owe.

The debt also includes £300,000 owed by undertakers, mostly relating to cremation fees, and £2.4 million owed by commercial tenants, of which two have “significant arrears”.

Around £732,000 of the outstanding debt is more than 12 months old and includes the balance owed by the two commercial tenants. The council says it is working with them on repayment plans and remains “reasonably confident” the debt can be recovered.

The authority’s financial monitoring report said: “The outstanding debt remains abnormally high as we continue to see the effects of our decision to stop actively chasing debt through the national lockdown and implementation of our new financial system where we are now only just benefiting from its full package of debt collection tools.”

Of the total £7.3 million outstanding debt, £2.4 million of it is currently set up to be paid under payment plans agreed with the customer and service.

Speaking at the meeting, the council’s director of resources Claire Morris said: “Generally we have quite a high collection rate for anything that’s under 12 months old. Once it starts to go over 12 months becomes a bit more difficult to chase.”

The top five services account for the largest proportion, at 78.4 per cent of the total outstanding debt. These include: asset management (including commercial rents) at £2.5 million, housing benefit at £1.8 million, financial services (money due from the council’s capital schemes and the sale of land, property and/or assets as well as amounts recharged to other councils) at £644,574, parking at £399,562 and the crematorium debts.

The council is currently forecasting to have £51.6 million in reserves at the end of the year.

Separately, at the beginning of March, the total council tax debt outstanding was £11,495,220, of which £6,257,670 relates to previous years and £5,237,549 to the current year.

A council spokesperson said they anticipated these figures to continue to fall up to March 31 and anticipated a council tax collection rate of around 96 per cent for the full year.

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