Norwich City Council insists it is tough over unpaid council tax

Norwich City Council has insisted it does takes a hard line on people who do not pay their council tax, despite figures which reveal it failed to collect millions of pounds in unpaid bills.

New government figures have revealed that, in the financial year 2011/12, the council failed to collect �2.7m it was owed in council tax and �1.7m in business rates, making the authority the poorest performer in Norfolk.

But City Hall leaders have hit back at the criticism, arguing the figures do not reveal the full story, with tax and rate dodgers still pursued beyond the financial year bills cover.

And the authority pointed out it can be much tougher to collect council tax in a large urban area, particularly at a time when some families are struggling to juggle their bills.

The city council had a collection rate of 94.6pc over the past financial year, collecting �48.1m of the �50.8m payable to the authority, a gap of �2.7m.

The previous year the council had a collection rate of 96pc and, with just over �2m uncollected, the gap between what the authority could have collected and what it did has grown by �700,000.

City Hall also failed to collect �1.7m in business rates in 2011/12, with �73m collected, compared to a potential �74.7m.

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James Wright, leader of the Liberal Democrat group at Norwich City Council, said: 'These figures show that for the second year running, Norwich City Council is shown to be the poorest performing council in Norfolk when it comes to collecting council tax.

'At a time when local councils have had to make savings, it is simply unacceptable that so much money goes uncollected.

'This is money that could be spent on services for people in Norwich and used to mitigate against further cuts.

'The city council needs to rethink its debt recovery strategy and I shall be seeking an urgent explanation as to why performance has been so poor and appears to be getting worse.'

But, while the government figures show what was uncollected at the end of financial year to which they relate, collection does continue beyond the end of the year.

Alan Waters, deputy leader for Norwich City Council, said: 'We take a hard line in pursuing people who don't pay their council tax.

'While the figure shows we collected 94.6pc in 2011/12, what it doesn't show is that we continue to pursue the outstanding amount and usually end up recovering close to 99pc. The same applies for the business rates.

'It's also important to know that council tax money goes into a council tax collection fund which covers any temporary shortfalls. This means there is absolutely no impact on the services we provide, or on jobs.

'What these figures also show is further evidence that the city, which has long struggled with deprivation levels, is not immune to the effects of the recession – something borne out in the increase we've seen in benefit applications.'

The best performer in Norfolk was Broadland District Council, which collected 99pc of what it was owed in council tax.

The council said its impressive collections rates were partly due to the authority offering people the chance to pay by direct debit, with 82pc of residents and businesses paying that way.

Where appropriate the council can offer flexible payment arrangements for people who are struggling to pay and professional debt advice is also available for those suffering hardship, the council said.

The authority said it also takes rapid action when people default on payments, by sending reminders soon after and focus enforcement action early in the year against those with the worst payment records.

Paul Carrick, portfolio holder for finance, said: 'It is thanks to Broadland residents that we continue to be among the top performing councils.

'Broadland residents and businesses clearly recognise their responsibility for paying their fair share even in such busy and economically difficult times.'

While city and district councils collect the council tax, they do not get all of the money. The lion's share goes to the county councils and the police authority, while, in some areas, town and parish councils also levy a precept.