Archived decisions
Hampshire County Council | |||
Executive Member - Adult Social Care |
Item 2 | ||
16 May 2007 |
|||
Write off of irrecoverable debts | |||
Report of the County Treasurer | |||
Contact:
Adrian Thorne, Head of Finance, Adult Services Department Ext: 7526, email: [email protected];
Kevin Armstrong, Assistant Head of Finance, Ext 7139, email: [email protected]
1. Summary
1.1 The following decision is sought
That nine debts of over £5,000 relating to 2006/07 be written off.
2. Reason(s)
2.1 This report supports the corporate strategy through minimising income loss thus helping to maximise spend on well-being.
3. Other options considered and rejected
3.1 None
4. Conflicts of Interest declared by the decision maker or other Executive Member consulted
4.1 None
5. Dispensation granted by the Standards Committee
5.1 None
6. Reason(s) for the matter being dealt with if urgent
6.1 Not Applicable
Approved by:...................................... Date:.....................
Councillor Patricia Banks
Executive Member for Adult Social Care
Hampshire County Council Executive Member for Adult Services Item 2 16 May 2007 Write off of irrecoverable debts 2006/07 Report of the County Treasurer |
Contact:
Adrian Thorne, Head of Finance, Adult Services Department Ext: 7526, email: [email protected];
Kevin Armstrong, Assistant Head of Finance, Ext 7139, email: [email protected].
1. Summary
1.1 This report identifies nine debts where it has not been possible to recover the amount due from the debtors and for which Executive Member's approval is required for write-off.
1.2 The report supports the corporate priority of Maximising Well-Being by ensuring actions are taken to minimise income loss.
2. Recommendations
a) That nine debts of over £5,000 relating to 2006/07 be written off
3 Impact analysis
3.1 In compiling this report account has been taken of the requirements of the Corporate Equalities Plan and Race Scheme.
4. Introduction
4.1 Hampshire County Council's financial regulations and procedures set out the approval levels for debt write-off as follows:
Up to £1,000 - Chief Officers to record and write-off.
Between £1,000 - Write off to be agreed in consultation between the
and £5,000 Chief Officer and the County Treasurer.
Greater than £5,000 - Executive member approval to be obtained.
4.2 This report seeks the approval for the write-off of nine debts over £5,000 which are deemed irrecoverable, to a total value of £80,564.88. Of these, eight debts relate to former residential clients, and one is for a client who received both non-residential and residential care. There is also a summary of the debts that have been written off during 2006/07 which are less than £5,000.
5. Background
5.1 Income management procedures ensure that debts are minimised as much as possible and appropriate action to recover debts is taken in all circumstances. Sometimes recovery is not achievable or would involve disproportionate legal and professional fees and staff time to make pursuit of the debt cost effective.
5.2 The Financial Assessments Panel membership draws representation from Revenue Services, and Adult Services Devolved Finance Unit, from the County Treasurers Department, the Adult Services Department and Legal Services from the Chief Executive Department. The Panel reviews individual cases of debts greater than £2,000, makes recommendations and ensures further action is taken as required. The following debts have been considered by Panel who have agreed that further action will not result in debt recovery.
6 Debts recommended for write-off
6.1 The following debts are recommended for write-off:
£
* Referred by Executive Member from 2005/06 for further recovery action.
6.2 This client was referred by the Executive Member at Decision Day in 2006 for Panel to pursue further. However, the Panel can now confirm that all possible avenues of debt recovery have been employed with no success and the Panel recommend writing this debt off.
6.3 This client was referred by the Executive Member at Decision Day in 2006 for Panel to pursue further. However, the Panel can now confirm that all possible avenues of debt recovery have been employed with no success and the Panel recommend writing this debt off.
6.4 The Client was admitted to a nursing home from hospital on 23 November 2000. During the period 23 November 2000 to 31 May 2004 all invoices were issued and settled.
6.5 From May 2004 until the client's death in June 2006 arrears accrued as the client contribution was not being paid. However, the family were responsible for the third party top up and this was paid.
6.6 The client was liable to pay the client contribution but after the client's death there were insufficient funds left in the estate to repay the debt which had accrued.
6.7 In October 2006 the Panel concurred with the recommendation of the County Manager to put this forward for debt write off on the basis that there were insufficient funds in the client's estate to meet the liability.
6.8 The client's representative was responsible for paying contributions direct to the home but after 30 June 1997 these were only made sporadically.
6.9 After some procrastination by the client's representative the Benefits Agency transferred appointeeship to Hampshire County Council in early 1999. Subsequent legal action produced only occasional instalments. Enforcement proceedings by way of Bailiff entry of the property found little of value.
6.10 Chief Executive's advised that as from September 2006 the debt could not be pursued any further as under s.24(1) of the Limitation Act 1980 no action can be taken to enforce a judgement after six years.
6.11 The Panel agreed in September 2006 to accept Chief Executives advice that the debt could not be pursued.
6.12 All client contributions were due to be paid direct to the home but the client's representative made sporadic payments since the placement began on 01 August 2000.
6.13 Numerous letters were sent to the client's representative regarding the debt and in reply the representative said that there was no money in his mother's estate to clear the debt. Probate was checked and to date none has been registered.
6.14 As the client's representative was unwilling to furnish information regarding use of the client's benefits the matter was referred to the Department of Work & Pensions (DWP) since it appeared that the representative had not been using the benefits for client contributions. Since then the DWP have informed us that they were unable to pursue a prosecution through lack of evidence.
6.15 Legal Services looked to pursue the case through the courts but this had to be abandoned due to lack of evidence.
6.16 The Panel agreed in February 2006 to recommend writing this off on the basis that there was insufficient evidence to pursue the debt with the client's executors.
6.17 The client was a full cost resident in Dunwood Manor Nursing Home between 28 May 1998 and her death on 07 June 1999.
6.18 The client's property was put on the market and sold on 28 May 1999 and an invoice for total arrears due was issued to the solicitors on 06 July 1999.
6.19 The solicitors acting on behalf of the executors disputed the validity of the charge on the basis that no contract had been entered into. Hampshire County Council advised them that the charges were properly raised in accordance with the National Assistance Act 1948.
6.20 The executors continued to dispute liability and in January 2000 the Solicitors released the sale proceeds from the house to the executors. Protracted attempts by Adult Services to resolve the dispute with the executors failed and the matter was referred to Legal Services for recovery. However, due to the period of time which had elapsed since the client's death legal proceedings were not feasible as there was no longer any prospect of recovering any of the monies which had been distributed to the beneficiaries.
6.21 The Panel agreed in February 2006 to recommend writing off this debt as there was no legal basis for pursuing the executors.
6.22 All client contributions were due to be paid direct to the home since the placement began on 10/4/2000.
6.23 Following the client's death on 23 December 2001 letters were sent to the Solicitors asking for payment. They informed Hampshire County Council that they needed authority from the executor of the will who resided in Japan.
6.24 The solicitors eventually contacted the executor who informed them that he was unaware of any debt. It was discovered that £4,739.30 was in savings and investments accounts and withdrawal forms were sent to the executor to release the monies. There was no response from the executor. Probate was checked in February 2004 and there was no trace.
6.25 In October 2005 the solicitors advised that they were no longer able to make contact with the executor. They also advised that the proposed transfer of appointeeship to Hampshire County Council was not likely to secure any material amount.
6.26 The Panel agreed in November 2006 to recommend writing off this debt due to the prohibitive cost of pursuing the Executor of the estate.
6.27 The client became a permanent resident of Sheffield Lodge in February 2005 and passed away on 31 August 2005. Due to the client not being referred to FAB until 19 August 2005 no client contributions were received before the client passed away. There was also a previous debt of £2,045.99 due for Non Residential Care client contributions.
6.28 Several letters had been written to the solicitors requesting they complete and return the SAS4 form but to no avail. The solicitors were invoiced in December 2006 on a full cost basis. Solicitors advised Hampshire County Council in February 2007 that the client's total debts exceeded monies available for distribution. Each creditor received a reduced pro-rata amount. All monies received from this source were used to reduce the arrears to £2,951.12 for the residential care.
6.29 The Panel agreed in October 2006 to recommend writing off this debt on the basis that there were insufficient funds in the client's estate to meet the outstanding liability.
6.30 The client was in residential care for the period 20 August 2002 to 23 May 2006. Invoices for this period were issued but not all were settled by the client's representatives. Although the client's representative was paying the third party top up a debt was accruing for the client contribution.
6.31 The client died on 23 May 2006 and a final statement was sent on 30 June 2006. A reply was received on 27 September 2006 from the representative advising that there were no monies in the Client's estate.
6.32 The Panel agreed in October the Panel agreed to recommend writing off this debt on the basis that there were insufficient funds in the client's estate to meet the outstanding liability.
7 Debts already written-off
7.1 The following debts totalling £166,462.62 have been written off during 2006/07:
· 127 debts with a total value of £108,131.74 relating to clients in independent sector residential homes (Total 2005/06 138 debts - £100,490.48).
· 52 debts to the value of £26922.46 relating to clients in County Council homes (Total 2005/06 60 debts - £21,789.14)
· 173 debts to the total value of £31,408.42 for non-residential charges (2005/06, 169 debts - £32,192.04).
7.2 Assuming the debts referred to above are agreed for write-off, the total write off figures for 2006/07 will be £247,027. This represents about 0.33% of the budgeted income for the Department. This compares with £208,422 for last year which represents 0.28%. However, adjusting for the two cases (£27,072.61) referred by the Executive Member last year the total relating to 2006/07 reduces to £219,954.39 which represents 0.30% of budgeted income.
7.3 The target maximum write-off for residential care is 0.4% of income for the year and 0.5% for non-residential care. As with the last year the requests for write off is primarily against residential placements rather than non residential care.
7.4 The write off amount for 2006/07 is a 0.05% deterioration on last year and represents a small fraction of income due which for 2006/07 is in the region of £74m. The Department continues to review debt recovery, information to clients and financial assessments procedures to ensure income collection is maximised.
7.5 Provision has been made in the Adult Services Department 2006/07 accounts for these debts if approved by the Executive Member.
LINK(S) TO CORPORATE STRATEGY | ||
Yes |
No | |
Hampshire safer and more secure for all |
√ |
|
Maximising well-being |
√ |
|
Enhancing our quality of place |
√ | |
Section 100 D - Local Government Act 1972 - background documents
The following documents discuss facts or matters on which this report, or an important part of it, is based and have been relied upon to a material extent in the preparation of this report.
NB: the list excludes:
1. Published works
2. Documents which disclose exempt or confidential information as defined in the Act.
(Quote list of documents here: either "none" if 1 or 2 above apply; or list the relevant letters, memos, etc. and their location)