Download 03/10/13/24 - Request for Write Off

24
London Borough of Sutton
Strategy Committee –13 October 2003
Report of the Executive Head of Business Services
Request for Write Off
Ward Location:
Not Applicable
Author(s) and Contact Phone Numbers:
Area Served:
Borough-Wide
Julie Turner, Investigation and Debt
Recovery Manager
020 8770 5472
Lead Councillors:
Peter Overy
Key Decision Report
Summary
This report requests approval to write off an amount of £33,193 (thirty-three thousand one
hundred and ninety-three pounds) of a total debt of £53,193 (fifty-three thousand one
hundred and ninety-three pounds).
Recommendations
I recommend the Strategy Committee
i)
To agree the acceptance of an offer from the debtor in the sum of £20,000 (twenty
thousand pounds) as full and final settlement of the total debt of £53,193 (fifty-three
thousand one hundred and ninety-three pounds).
ii)
To agree the write off of the balance totalling £33,193 (thirty-three thousand one
hundred and ninety-three pounds).
1.
Background
1.1 The debt is a Housing Benefit overpayment, in respect of a Rent Allowance claim,
which was in payment from 24 December 1990 to 9 February 1998.
1.2 The customer claimed stating he was no relation to his Landlord. This proved to be
incorrect; his mother owned the property.
1.3 During the investigation, the Investigation Team obtained evidence, which suggested
the customer, assisted his mother to obtain a mortgage by deception.
1.4 Based on the investigation findings the customer’s claim for Housing Benefit was
cancelled back to the start.
1.5 The Crown Prosecution Service (CPS) did not pursue the Criminal case against the
customer. Despite numerous letters to the CPS, dating from 8 February 1999 to 27 July
1999, the Council was unable to establish their reasons for not pursuing the Criminal
case.
1.6 Sequence of Events attached as Appendix A [SS4/03 paras 7 & 12a].
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2.
Issues
2.1 The debt arose following the cancellation of the customers Housing Benefit claim.
2.2 Counsel has raised concerns about the legislative validity of the notification letters
issued when the overpayment arose.
2.3 In the financial year the debt arose, 1998/99, the Council received 80% additional
subsidy against the created overpayment. This amount was £42,554 (forty two thousand
five hundred and fifty-four pounds only). Therefore, any amount above £10,639 recovered
from the customer is additional income for the authority.
2.4 The debt is now over five years old.
2.5 Legal Services charge for the work is expected to reach £3,000 (three thousand
pounds) after completing negotiation on the settlement of the debt.
2.6 Legal Services advise they may be able to increase the settlement figure to include
their costs.
2.7 The customer’s solicitor has advised Legal Services the customer is raising the
money to clear the debt through either re-mortgaging or loans.
2.8 If the Council continues the Claim action and loses, the total overpayment will have to
be written off.
2.9 If the Council continues the Claim action and wins, dependent on judgement, there
may be ongoing administrative action required to monitor repayment.
3.
Financial Implications
Group Finance Comments
3.1 The Housing Benefit section has a total provision of £276,000 (two-hundred and
seventy-six thousand pounds) for bad debt write-off.
3.2 At 30 September 2003, the Housing Benefit section has requested £36,340 (thirty-six
thousand, three-hundred and forty pounds) be written off against the bad debt provision.
Strategic/Corporate Finance Comments
3.3 The proposed write off can be contained within the current provision for bad debts.
The overall level of the provision will be reviewed at 31 March 2004, and any assessed
shortfall will be charged to the General Fund.
4.
Influence of the Council’s Core Values - None
5.
Contribution to the Achievement of the Council’s Policy Aims - None
6.
Background Papers
[Exempt].
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