Luton Council writes off £204,000 in housing benefit and council tax debt
Debts deemed unrecoverable due to various reasons
Historic individual debts totalling £204,000, arising from housing benefit overpayments and from council tax, have been written off by Luton Borough Council’s executive.
A report was presented to the committee covering write-offs of more than £10,000 between October 1, 2001 and March 6, 2023 for housing benefit overpayments and from September 27, 2024 to March 31, 2025 for council tax.
Significant progress has been made in the collection of debts from housing benefit overpayments and council tax, said the report.
“The team has collected £19.5m in housing benefit overpayment debt since 2020. A total of £365,000 is waiting to be written off for 2025/26. This figure relates to all aged debts.
“The team has collected £540.7m in council tax since 2020, while consistently meeting the relevant yearly targets. A total of £492,000 is waiting to be written off for 2025/26, again relating to all aged debts.
“There’s no time limit to collect housing benefit overpayments, but the older the debt, the harder it becomes to collect. A time restriction exists to collect council tax.
“But as long as a debt is being actively pursued, with no period of more than six years without any active recovery, it can still be collected.
“The report proposes writing off those debts where it’s not been possible to obtain payment because the debtor cannot be traced or the sum is otherwise irrecoverable.
“All debts, taxes and rates within the service’s control are actively pursued. Sometimes special arrangements are needed to effect recovery, such as extending the period to collect the debt or instigating enforcement proceedings to secure payment.
“Further pursuit of the debt isn’t possible in some cases for a variety of reasons, including bankruptcy and liquidation. Individual debts under £10,000 can be written off by the director of finance, revenues and benefits under delegated authority.”
Labour Northwell councillor Rob Roche told the executive: “This report seeks approval for the write off of housing benefit overpayments and council tax debt in accordance with the council’s financial regulations.
“The council is responsible for administering the housing benefit system and for the billing and collecting of council tax,” he explained.
“Despite all reasonable recovery efforts being taken, certain debts become irrecoverable from time to time and must be considered for write off. The common reasons for non-recovery are the individual is deceased, is declared bankrupt or absconded.
“This report contains a list of the payments of more than £10,000 proposed for write-off, totalling £204,000. Although the debt is written off for accounting purposes, records are retained for six years and debts may be reinstated should new recovery opportunities arise.
“For context, the council paid £63m in housing benefits in 2024/25. The level of write-off must therefore be viewed proportionately against the scale of the overall benefit expenditure.
“No debts are recommended for write-off unless all viable recovery options have been fully exhausted. Where possible, the local authority works with taxpayers to agree an extended payment arrangement.
“A provision for bad debt is made each year within the council’s accounts,” added finance portfolio holder councillor Roche. “The value of the proposed write-off falls well within the provision, so there’s no impact on the revenue budget.”
The executive agreed writing off the individual debts of more than £10,000.