Households in and around Norwich owe �2.5m in council tax

Authorities have been criticised for failing to collect �2.5m in council tax owed by households in and around Norwich – money which could be reinvested in vital public services.

The figure represents the combined value of unpaid bills issued by Norwich City Council and neighbouring Broadland District Council during 2010/11.

The city's �2.019m in uncollected council tax, added to �1.55m in uncollected business rates, places it fifth in a league table of the 47 tax-collecting authorities across the east of England ranked by the size of their arrears.

Conversely, Broadland found itself near the bottom of the table with a combined outstanding sum of �741,000.

The figures published by the Department for Communities and Local Government show that more than �1bn is going uncollected across the country, rather than being used to bolster dwindling public budgets.

The GMB public services union said the figures were 'a scandal and a disgrace' when vital community facilities for elderly and young people were being slashed due to government cuts.

Council representatives said the statistics reflected the difficulties brought on by the recession, but all outstanding money was being pursued with a target that 98pc would be recovered.

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Paul Hayes, GMB regional secretary in the eastern region, said: 'It is a scandal and a disgrace, at a time when vital services for our elderly and our children in our local communities are being slashed due to government cuts in funding, that more than �1 billion nationally is going uncollected in council tax and business rates.

'Feeble excuses about being unable to collect these taxes no longer wash. Urgent reforms to assist hard pressed council staff to collect these taxes are long overdue.'

A Norwich City Council spokesman said: 'We do take a hard line in pursuing people who do not pay and so while this figure shows an amount uncollected for 2010/11, what it does not show is that this will be pursued and 98pc of this is likely to be recovered.

'The figures are also further evidence that the city, which has long struggled with deprivation levels, is not immune to the effects of the recession - something born out in the increase we have seen in benefit applications. More than ever, people are feeling the pinch and when taken in context, it will not come as a surprise to people to see the other areas where collection figures have been hit, and that these are also urban areas where deprivation is an issue.'

Norwich North MP Chloe Smith said: 'Clearly these figures don't show up well for our city. It is very important that all councils do their best to collect all taxes due. Taxes are intended to be spent on services for people, so it is important they are collected and available for public spending. It is possible to see from the comparison between Norwich and Broadland, the different success that neighbouring authorities can have.

Norwich South MP Simon Wright: 'Any uncollected tax means the burden falls on other taxpayers and has an impact on the services the council can deliver.

'It is very disappointing to see Norwich's collecting rate is so low. There is clearly a need to treat people in vulnerable situations who have arrears very sensitively, and it may be that Norwich has a larger number of people in difficult situations, but nevertheless the council needs to look at its back-room functions to make sure a system is in place that ensures those that can and should pay up, do pay up.'

Paul Carrick, Broadland District Council's portfolio holder for finance, said his authority's comparatively successful collection rate was helped by the fact that more than 80pc of council tax payers settled their bills by direct debit.

'This provides real benefits for council tax payers as paying in this way helps us to keep council tax low, because the cost of administering the direct debit scheme is low relative to other methods of collection,' he said. 'The majority of our council tax payers paying by direct debit also means that our staff are able to spend time helping customers who are struggling to pay to meet their commitment to us to find payment plans that suit their budgets with weekly payment options and access to relevant benefit as appropriate.

'We are most grateful to the majority of Broadland residents who pay their share automatically and on time.'

The total for all 47 councils in the eastern region for uncollected council taxes and business rates was almost �93m. The worst non-collector in the region was Luton.

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