Enforcement needed on rates arrears, says Principal Auditor's Report

The Principal Auditor's report has highlighted his concern that high arrears in rates and salt water charges will not come down without decisive action.

Tony Sacramento finds arrears have risen sharply in recent years, with some of the largest commercial debtors failing to pay anything at all.

The Principal Auditor's Report finds that rates arrears have nearly doubled over the past decade, rising from £4.8m in 2015 to £9.5m in 2024.

Last year also saw the Treasury Department write off nearly £518,000 - the highest sum in that period.   

The Principal Auditor says, "| reiterate my concern that the overall high arrears position will not improve unless effective recovery action is taken principally on arrears for which the Court has granted an Order to Pay." 

He notes that the COVID pandemic saw LPS instructed by the previous Financial Secretary to cease the arrears recovery process, but that this resumed in January 2024.

Mr Sacramento says, "To date, no court orders have been enforced to recover unpaid rates from landlords or tenants." 

As at 31 March 2024, the top 15 commercial debtors owed just over £3m, almost a third of the total arrears.

The two largest cases, involving a company and a sporting association, together owed more than a million pounds.

Both were among six debtors who had never made a payment.

However, Tony Sacramento says, "One debtor has since paid in full, and 2 debtors are in the process of settling their debts."

The Principal Auditor has reiterated his view that "in the event that an occupier defaults the Government should explore the possibility of passing the debts onto the landlord, in accordance with section 272A of the Public Health Act. To date, however, no landlord has been held liable for the debt of their tenants."