Council rental arrears: Bristol City Council writes off £1.5m in debt owed by thousands of tenants

The average debt was £446 - but with no payment made over past 12 months, the city council has stopped chasing them up

More than £1.5million of unpaid rent racked up by nearly 3,500 former council tenants is being written off.

Bristol City Council cabinet members agreed that officers should give up trying to chase the debts, which are all over three years old.

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No payments have been made by any of the 3,446 ex-tenants in the last 12 months – each owing an average of £446 – and the money is now considered unrecoverable and accounted for in the authority’s budget.

A report to cabinet said the current outstanding total debt for the council’s housing revenue account (HRA) was £13.1million, of which £8.5million related to current tenants rent arrears.

It said: “A review of debt older than three years has been undertaken for which there has been no activity or payments during the last 12 months.

Each of the tenants owed an average £446 to the city council

“Reviewing this historic debt and considering the likelihood of collecting it, it is considered better value for money to direct resource to manage £8.5million of current tenant priority debts and other active debts.”

Cabinet member for housing Cllr Tom Renhard told the meeting: “While the vast majority of rental income due to the council is collected in a timely way, and our ethical enforcement and recovery methods are effective at helping tenants who have fallen behind in rent payments, there are inevitable instances where debts accrue and they are not recoverable.”

He said that due to the age of the 3,446 former tenants’ debts it would be “uneconomical” to pursue them.

“These debts are 100 per cent financially impaired and therefore have already been financially budgeted for in the HRA budget,” Cllr Renhard said.

The cabinet member said a recent internal audit had resulted in better management of bad debts to prevent them building up.

He said: “The council’s approach in collecting and recovering outstanding monies must be consistent, proportionate, transparent, fair and courteous.

“As the debts are all over three years old, this significantly impaired our ability to evidence transparency of the debts by former residents.

“We always want to recover debts to fund council services, however, in this instance we are considering the viability and economy of the write-off as well as impact on the individuals who are unable to pay.”

Labour Cllr Marley Bennett told the meeting on Thursday, March 3, it was really important that the local authority struck the right balance between recovering money owed and protecting vulnerable people who genuinely could not pay.

He said: “We have a policy in place to differentiate between those who can’t play and those who won’t play, so I’m pleased we are willing to write off debts where it’s appropriate.”

Cllr Renhard replied: “It’s about taking a psychologically informed approach to debt and debt management.

“We know that the earlier we intervene, when the debts are smallest, it’s then easier to deal with. Once debts have started occurring, it becomes far more challenging.

“The team is working really hard with current tenants in arrears, particularly between the £500 to £2,500 bracket, to get the support in place and ensure that those tenants are hopefully able to pay off their arrears or put in place a plan that’s going to be affordable for them.

“When it comes to dealing with rent debt, we don’t use third-party debt collection agencies at all.”

Cabinet papers said the HRA’s main source of income was from rents paid by tenants and was essential to delivering landlord services and housing.

They said: “The vast majority of income due is collected and a robust process to collect and chase debt is in place to ensure those who can pay do, and there is support and guidance provided to tenants who may struggle.

“Even with this support, it is inevitable there are some instances where debts aren’t recoverable.”

The report said the unpaid rent being written off, totalling almost £1.54million, predated the pandemic