Brent Council is facing a council tax collection deficit of more than £15 million, though officers are confident this can be managed over the next few years.
Figures from the Ministry of Housing, Communities, and Local Government (MHCLG) showed Brent had an estimated gap of £15,051,979 for 2020/21 – the third biggest in England.
However, finance officers at the council explained the bulk of the pressure – around £12.6 million – will be eased in a “planned one-off” write-off of historic council tax debt.
The outstanding amount has been attributed to the impact of the Covid-19 pandemic – reduced enforcement action and court closures led to fewer collections, while fewer new properties were eligible to pay tax.
Minesh Patel, director of finance at Brent Council, said: “Brent’s council tax deficit for this year is significant, but can mostly be attributed to a planned exercise to write-off historic uncollectable debt that has built up over years, and a small proportion is a result of pressures caused by the pandemic.
“Nevertheless, it is currently expected that the deficit will be paid off over the next three years.”
Local authorities have been given until 2023-2024 to cover their deficits following months of disruption brought on by the coronavirus outbreak.
Mr Patel explained 20 per cent of Brent’s gap would be dealt with by the Greater London Authority, with other elements supported by the Government’s Covid compensation scheme and the rest built into future council budgets.
The deficits come amidst growing uncertainty across councils after the Government said it will stop issuing financial support at the end of this month.
At a MHCLG committee meeting in April, its permanent secretary, Jeremy Pocklington, explained the Government “does not have any plans to extend our support beyond this quarter” but acknowledged it will continue to monitor the situation and “if necessary, look again at our plans”.