Verbal Report

Further to minute 146 (20 December 2012), the Chief Executive gave a verbal update upon the position in respect of bad debts, particularly those related to Adult Social Care.

He commented that a revised system of debt collection and pursuance had been introduced to ensure that the build up of unrecoverable bad debts did not continue and that a small team of staff had been set up to proactively pursue all outstanding bad debts, where there was a possibility of recovery. In spite of this, the initial indication of the level of unrecoverable bad debts of approximately £10m still stood at the present time. However, with a bad debt provision of £4m, the impact on the current year’s budget would be £6m. This would probably need to be written off and would impact upon the Council's overall budget.

To establish how the level of unrecoverable bad debt had come about, the Chief Executive had appointed Eugene Sullivan, who until a month ago had been the Chief Executive of the National Audit Commission, to undertake an investigation. His brief was to look at the history of the matter, to establish the reasons for the policies that the Council appeared to have in place regarding the collection of debts, to validate the likely amount that could be recovered and to make any recommendations he felt appropriate for future action to ensure there was no repeat of the problem. Mr Sullivan had indicated that he would complete the investigation by mid February and his report would be available initially to the Cabinet and publicly shortly afterwards

Resolved – That the report be noted.