DD1489 Proposed bad debt write-offs - 2015/16

In addition to income from government grants and council tax, the Authority raises income from various other sources such as publications, subscriptions, project fees, sale of data, sponsorships and other miscellaneous charges and these constitute the Authority's sundry debtors. The Authority raises invoices on a regular basis, sends out reminder letters and actively chases customers for payment. However, when the Authority's collection methods have been exhausted and the level of debt is below a level suitable for court referral, the debt is deemed to be irrecoverable and is submitted for write off against the bad and doubtful debt provision.

Paragraph 16.10, in the approved Financial Regulations, states that, "Provided appropriate steps have been taken to recover monies due to the Authority, the Head of Financial Services may authorise the writing off of sums owed by a single debtor up to £50,000. Sums to be written off, in relation to a single debtor between £50,000 and £150,000, will require the approval of the Executive Director of Resources". The Head of Financial Services has delegated powers from the Executive Director of Resources in his absence.

GLA Debtors (Appendix 1)
The proposed write off value of £14,647 comprises eight debtors (see appendix 1).

Three debts totalling £7,600 relate to planning application meetings, KR Planning and Lifshutz Davidson Associates have disputed the VAT charge and hence only part paid the invoice leaving the vat outstanding (£800 each). There was no mention of vat on the GLA website when booking.

£6,000 owed by Empyrean Developments Ltd has been in dispute since April 2015. Accounts Receivable have been unable to recover the outstanding amount and believe it would not be cost effective to pursue this legally.

Bradley Media has gone into liquidation and owes £1,440 for filming at City Hall.

The MSM Asia invoice £4,167 (vat only), is being proposed for write off as they did not provide an offsetting invoice for services provided under a barter arrangement.

The final three debts, (HM Treasury £300, Malaysian Pancake Co £540, and Prima Vista £600) relate to miscellaneous services which Accounts Receivable have been unable to recover.

LDA Debtors
LDA debtors transferred to the GLA following the abolition of the LDA on 31 March 2012. Of these, £100,000 in respect of a grant reclaim is irrecoverable as the Park Royal Partnership from which the LDA had sought to recover the grant was wound up on 31 March 2014. A specific provision was set aside in March 2013 in the event of non-payment, as such this write off will not fall as a charge on the 2015/16 financial year.

There are no direct equalities implications arising from this decision. However, as per the Equalities Act 2010, the GLA has a responsibility to give due regard to promoting equality in all its activities, including financial administration and decision-making. Given the efforts to recover the above mentioned debts, the proposed bad debt write offs are in line and consistent with previous bad debt write off decisions.

a) Links to strategies and Strategic Plan
The collection of debt and the subsequent write off of debt deemed to be uncollectible contribute to the proper administration of the Authority's financial affairs.

b) Impact assessments and Consultation
No consultation is required.

c) Risk
The Authority has credit control processes in place to maximise the collection of debts. However, in the event that a debt is deemed bad, it is written off against the bad and doubtful debt provision thereby avoiding the need for unplanned in year charges against the Authority's general fund account.

The corporate bad debt provision currently stands at £318,000 and is therefore sufficient to fund the proposed write offs. The provision is reviewed annually to ensure that adequate provision is maintained.

VAT of £1,380.00, previously paid over to HMRC, will be reclaimed under the Bad Debt Relief Scheme.

The Director may approve officers recommendations if satisfied that commercially sufficient steps have been taken to recover the debt and the amount of resource/cost involved in continuing recovery activity is disproportionate to the debt concerned.

GLA Debtors (Appendix 1) (see signed decision form)