The council has missed out on more than £2.6m in the last five years after a number of taxes from residents and businesses went unpaid.

An investigation found that Reading Borough Council (RBC) had not collected hundreds of thousands of pounds each year, from 2013-2018, in unpaid council tax, business rates, housing benefit and rent.

£1.5 million of the debt written off was due to failure to obtain housing benefit.

The council currently has £18.9m set aside to cover any uncollected debt.

A spokesman for RBC said: “Local authorities, including RBC, are forced to write off uncollectable debt after a number of years.

“It is important to note that RBC make every possible effort to recover monies owing to them.

“The council only writes off debt as a last resort and where it has been deemed no longer recoverable or economical to recover.”

“The council does however work with customers in these situations to try and resolve any payment issues prior to writing off any debt.”

Examples of ‘last resort’ circumstances include when companies and/or individuals are made bankrupt in the process of the council pursuing debts.

In other instances, companies go in to liquidation or are dissolved which means the council can no longer recover the amounts owed.

The council has an average debt collection of just over 98 per cent over the last five years and 98.6 per cent last year, which it says is 'relatively good' in comparison to other local authorities.

The council uses recovery options including:

  • Use of Tracing Tools to search for absconders
  • Enforcement Agents to remove goods to the value or agree repayment plans
  • Attachments of Earning orders to deduct direct from salaries or pay
  • Attachment of Benefits orders
  • Specialised Insolvency Firms
  • Local Solicitors
  • Legal Services

The year up to 2017 saw the council lose £740,000 - the largest amount of unrecovered debt from the five years investigated.

This dropped to just under £500,000 last year.

Around £200,000 was written off because housing benefit could not be obtained, while £66,000 was lost from the local authority’s housing income, which includes charges such as rent and repairs.

A further £61,000 was squandered from missed business rates and council tax and £170,00 was lost to ‘sundry’ or miscellaneous debtors.

The council’s latest quarterly internal audit report has criticised RBC's debt collection process for 'sundry debtors'.

The report stated: “There are still failings in the debt collection process, with no standard procedures for the monitoring and chasing of debt and a lack of consistent arrangements for tackling long term debt.

“Given there is now a greater focus on commercial trading and income generation, there needs to be better central overview of the chasing and monitoring of debt.”