BASILDON Council has been forced to write off bad debts of £880,000 amassed during the recession.
Figures submitted to its cabinet over the past 18 months reveal the amount lost to companies which have gone bust and individuals who have been declared bankrupt.
The papers, signed off by councillor Phil Turner, detail 11 bundles of debt, written off as irrecoverable, totalling £880,000 since January 2008. The majority has been lost through uncollected national non-domestic rates, a tax on businesses collected by local authorities and redistributed by central Government.
Other cases relate to people who have been declared bankrupt, absconded, moved abroad or died. In those cases the council has decided not to pursue the debts because of the high costs of recovery and drain on resources.
David Miles, secretary at the Essex Federation of Small Businesses, called the figures a “sign of the times”.
He said: “It may be that some of those businesses have faced the choice at the end of the month of having to either pay their rates or their staff. That can be a tough choice to make.
“And most of the businesses will not be serial offenders who have never paid their taxes for years; they will be companies that have been forced to close because of the recession.”
Mr Turner, cabinet member for resources, added: “Unfortunately, irrecoverable debt is a reality during tough economic times, as many companies face difficult financial conditions and the harsh reality of bankruptcy or liquidation.
“We always endeavour to collect outstanding business rate debts. However, in exceptional cases it is necessary to write-off such debts after every other avenue of recovery has been explored and pursued.”
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