Purpose

 

1.1      
Under 4.23 of the financial procedure rules, the Assistant
Director – Finance has the delegated authority to approve
individual debt write-offs up to the value of £5,000.
Individual debts in excess of £5,000 require the approval of
the Cabinet in order to be written off.

 

1.2      
This report sets out the total debts written off thus far in
2025/26 and debts individually up to the value of £5,000 that
have been written off by the Assistant Director – Finance
under delegated authority during 2025/26 to date.

 

1.3      
This report recommends that the Cabinet approve the write off
of individual debts in excess of £5,000 that collectively
total £246,315.

 

1.4      
Whilst the Cabinet are requested to approve write-offs
amounting to £246,315, it should be noted that
the financial impact to Hertsmere
for its share of these write-offs is £65,813 due to other
parties’ interest in the debt holding. It should
also be noted that these write offs will be fully funded from the
Bad Debt Provisions, which have been set up for this purpose and
within which full provision has been made for these debts. As such
there is no direct impact on the revenue budget.

 

1.5      
The total debt amounts to be written off are summarised below
and are detailed in section 6 of this report and confidential
appendix 1 on part 2 of this agenda:-

 

   

 

Total debt

 

Hertsmere BC Share of
debt

Table 2

Business Rates

£140,166

 

£56,068

Table 3

Council Tax

£106,149

 

£9,745

 

Total

£246,315

 

£65,813

 

Content

RESOLVED that the
Cabinet

1.    
Noted the
write-offs year to date for 2025/26, individually less than
£5,000 and amounting to £340,899 in total, written off
by the Assistant Director, Finance under delegated authority, table
2, paragraph 5.14.

2.    
Approved the
write-off of bad debts, individually in excess of £5,000 and
amounting to £246,315 in total as summarised at paragraph
5.20, set out in section 6 and detailed in confidential appendix 1
(on part 2 of this agenda).

3.    
Noted that the
financial impact to Hertsmere of the write-offs in ii) above, based
on its share of those bad debts, amounted to
£65,813.

4.    
Noted that the
write-offs in i) and ii) above were to be funded from the bad debt
provisions, which had been set aside for that purpose

 

Reasons for
decision

1.    
It is considered prudent financial
management to ensure that debts that are no longer collectable are
written off. This is so that the Financial Statements reflect the
Council’s true financial position and do not overstate the
expected income receivable. It was a continued recommendation of
internal audit that the Council should write off debts that had
been irrecoverable for a number of years with little or no prospect
for recovery.

2.    
The Council had taken all
reasonable steps to recover the debts detailed in this report and
the possibility of recovery was now considered to be extremely
remote. However, if circumstances changed and the Council became
able to collect these debts, then they would be written back
on.
 
Alternative Options
Considered
The Cabinet could decide not to write off the
debts presented in this report. However as there was little or no
chance of recovery, the Council’s financial statements would
show an overstated debt position.