ALMOST £7 million of bad debts were written off by Fife Council in 2021-22 – an increase of 16.9 per cent from the previous year.

It included £2.66m of council tax that officers decided there was no realistic hope of collecting, a big jump from just under £1.8m in 2020-21.

And councillors were told the hangover from the pandemic and the cost of living crisis will impact further on the collection of rent and rates.

Les Robertson, head of revenue and commercial services, said: "The amount of debt written off is always significant, however this needs to be viewed in the context of the total charges levied and the council’s performance on the collection of the debt."

Total bad debts written off were £6.94m, a significant increase from almost £5.94m in 2020-21.

The gross amount billed in 2021-22 for council tax, non-domestic rates, sundry income and rent was just over £720m.

He added: "The total write-off represents just over 0.96 per cent of the total amount billed for 2021-22 and the total written off is well within the provision for bad debt already provided for within our financial accounts."

There were large increases in the amount of supported rent, £772,000 to almost £1.2m, and non-domestic rates, £678,000 to nearly £1.39m, that were written off in 2021-22.

The amount deemed irrecoverable for mainstream rent dropped from £1.5m to £963,000 and he explained: "There has been a moratorium on evictions so that's the main reason that debt has reduced.

"A lot of the debt is written off when a tenancy is ended due to eviction.

"That's been stopped during the pandemic and is still stopped until next March so there's £500,000 less written off."

He said collection rates "have generally held up during the pandemic" but added: "We're beginning to see the impact of the pandemic and the cost of living crisis because for the first time in three years the rent collection overall has fallen.

"I would expect that to continue. As household income reduces all collections are far more difficult."

As a result of these pressures, he said they will devote more resources to assisting vulnerable households and businesses and apply the fair collections policy.

Mr Robertson told councillors on the finance, economy and corporate services scrutiny committee: "This means we take a supportive attitude to households that are vulnerable but at the same time we take robust action against those households that just choose not to pay their debts."

There were four bad debts where the write-off exceeded £50,000.

In three of the cases the companies were either dissolved or liquidated, the fourth, which amounted to more than £466,000, related to a business that had been charged the wrong rateable value since 2015.

Mr Robertson said write-off is only considered where there is no realistic hope of recovery or where it is not economic to pursue recovery further.

However, that can change.

He explained: "If for example you have debt written off and then you win the lottery, and if that debt wasn't due to something like sequestration which we could never go back and touch, but was just deemed as irrecoverable and there's a change of circumstances, we would review that and write the debt back on.

"In council tax there was something like £30,000 written back on last year. It's not a lot in the big scheme of £2.66m but that facility is there.

"Often it's deemed irrecoverable where the person can't be traced, the debtor has gone away. If you then find out where they've gone that debt would be written back on."