Millions owed to North-East councils in unpaid council tax

The region’s biggest local authority, Durham County Council, has £15m worth of arrears.

This would meet a significant chunk of the further £100m in cuts its leader Simon Henig is predicting the authority will have to make as a result of financial pressures.

Thousands of low-income families are now paying council tax for the first time after the Government abolished council tax benefit and replaced it with a less generous scheme.

Meanwhile, the contribution those who were previously exempt now have to pay will also double next year.

Early indications show that arrears may well rise as a result with councils in Middlesbrough and Redcar and Cleveland already showing a year-on-year increase of 48 and 46 per cent respectively when it comes to households failing to make their first instalment of this year’s council tax bill.

The North-East as a whole has the lowest council tax collection rate of any region in England – outside of London – 94.6 per cent in 2011/12, a fall of 0.6 per cent on the previous 12 months.

Councillor Amanda Hopgood, the leader of the Liberal Democrats on Durham County Council, said: “This money would go a long way to keeping some services running.

“We need to ensure that the systems in place to ensure recovery are fit for purpose.”

Paul Darby, the head of finance at Durham County Council, said it had reduced its arrears figure from £23m in March last year.

He added: “The average level of arrears per household in County Durham is below the national average for England.”

Darlington Borough Council was owed £4.8m in unpaid council tax as at March 31 this year.

Its cabinet member for efficiency and resources, Councillor Steve Harker said: “The council performs well in terms of collection of council tax and achieves a 99 per cent collection rate.

“The majority of this debt will be paid as payment arrangements are in place with residents.”

Last year Darlington Council wrote off £1m in what it called unrecoverable debt, including £431,401 in council tax.

It said the amounts were small compared to the large sums of money it collected each year and debts were only written off as a last resort.

Neighbouring Stockton Council had outstanding council tax arrears of £3.9m at the end of March this year.

Councillor David Harrington, its cabinet member for finance, said: “In all cases of non-payment, we act promptly to try to stop arrears building up.

“We take action in a fair and consistent manner that takes account of individual circumstances."

Hartlepool Council said its council tax arrears figure stood at £2.9m at the end of March this year.

It revealed that in 2012/13 it collected £950,000 of arrears from the previous financial year.

Council leader Christopher Akers-Belcher said: “We endeavour to identify those who cannot pay from those who will not pay.”

He added: “Due to the Government cutting council tax benefit 6,000 Hartlepool households are now paying council tax for the first time.

“We fully sympathise with how welfare reform changes are impacting on people’s finances and we are doing everything possible to assist local residents.”

Redcar and Cleveland said of the £70.3m it had collected in 2012/13, £1.74m remained outstanding in arrears.

It said this would be pursued in future years until it was either collected or deemed to be irrecoverable. The council wrote off £179,158 in unpaid council tax last year.

Middlesbrough Council said its level of arrears was continuing to reduce month-by-month. It also said it was not its practice to write off arrears.

North Yorkshire County Council said council tax billing was the responsibility of individual district authorities and therefore it could not say what was owed in the county.

The Government has said councils should be proportionate in enforcing payment, but also sympathetic to those in genuine hardship.

Its own figures show that nationally council tax arrears have soared to just under £2.4bn, an average of £104 per household.