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Hundreds of landlords racked up more than £1.5m in debt city council failed to spot

Hundreds of landlords across Liverpool racked up council tax debts worth more than £1m after they were deemed vulnerable by the city council.

In September, it was revealed that while Liverpool had one of the lowest council tax collection rates among UK core cities, many individuals classed as vulnerable had means to pay but were suspended owing to such a designation. In a written response to a question from Cllr Andrew Makinson, it has been identified that the council is owed around £1.5m as a result.

Speaking to the ECHO, Cllr Makinson said landlords should be forced to sell up if they can't or won't pay their rates. A finance and resources committee earlier this year was told the city council’s original policy made it explicit that a number of groups are considered ‘vulnerable’ and therefore exempt from parts of the recovery process.

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It added: “However, this classification of vulnerability does not take account of individual circumstances including the ability to pay or the availability of other financial resources and assets. There are many individuals, currently classed as vulnerable, that clearly have the financial ability and resources to pay amounts owed.”

Responding to Cllr Makinson’s question, Deputy Mayor Cllr Jane Corbett, said around 597 debts were linked to landlords “and had been suspended because the liable person was classed as vulnerable.” She added: “Some landlords would have been responsible for multiple debts so the number of landlords would have been less than 597. The debt totalled £1.5M.”

Cllr Makinson, deputy leader of the Liberal Democrat group, said: “This Labour council has one of the worst council tax collection rates in the country, and council tax payers will be shocked to hear that hundreds of private landlords have been allowed to get away without paying over the past five years.

“The council should be forcing landlords to sell properties if they can’t, or won’t pay their bills. This is just another shocking example of how this Labour council is forcing ordinary families to pay for waste, incompetence and corruption, while developers and landlords get rich at our expense.”

In adopting a new council tax recovery policy, a report to cabinet said those that have the ability to pay, but choose not to, are “denying the council and the taxpayers of the city vital funds for essential services and the strongest action will be taken against them.” It added that it was clear “significant improvements need to be made to maximise the amount collected in council tax and business rates.”

Cllr Corbett added in her response that recovery and enforcement of these debts has now commenced following approval of the revised Council Tax Recovery and Enforcement Policy in September. Earlier this month, the Mayor of Liverpool Joanne Anderson said the ability to bring about a potential hike in council tax would not “bring any reassurance” to the cash-strapped council.

As part of the wide ranging Autumn statement announced by Chancellor of the Exchequer Jeremy Hunt, the UK Government will allow local authorities like Liverpool to increase their council tax by 5% each year from April 2023 without the need for a referendum. The government said this will give councils “greater flexibility to set council tax levels based on the needs, resources and priorities of their area, including adult social care.”

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