Hackney and Croydon councils are among the five worst boroughs in London for unpaid council tax, it has been disclosed.
In total, London local authorities are owed over half a billion pounds in unpaid council tax despite the unprecedented pressure on public finances, according to an investigation by the Evening Standard newspaper.
The figures reveal that Conservative controlled Croydon is the second worst performing borough, with £35 million owed just after Lambeth with £51 million owed.
The rest of the top five, Hounslow, Haringey and Hackney, all Labour controlled, account for 30 percent of the entire uncollected bill. Labour councils are said to be the worst, responsible for over £366 million of the uncollected tax.
The Government accused Labour councils of wasting public money, which could have been used to pay for 1000 libraries and over 16,000 police officers. Last year’s bill alone amounts to £117 million – equivalent to the cost of the 2012 Olympic stadium or the amount in planned cuts in public services.
Housing Minister Grant Shapps said: “This confirms what we all knew about Labour councils wasting public money without a second thought.
“Not only are councils like Lambeth pursuing a strategy of cutting jobs before waste they are displaying breathtaking incompetence when it comes to financial management. All the millions could have been diverted to protecting frontline services.”
A spokesperson from Croydon Council said: “Over nine years, the amount we have outstanding is less than three per cent of the £1.5 billion available to collect. We have the sixth largest amount to collect in the country, and our previous year’s collection rate of 96 percent far outstrips the government’s tax collection performance figure.”
“Croydon takes collection very seriously, pursuing all recovery options available, including the use of bailiffs, bankruptcy hearings and charging orders.”
A Hackney Council spokesperson said that the borough’s transient population and large numbers of rented accommodation were contributing factors to the high proportion of uncollected tax, adding: “Unfortunately, some people move without paying their council tax or advising us of a forwarding address.”
“We continue to invest in tools and systems that allow us to trace non payers. Once traced, we actively pursue the outstanding amount using bailiffs and bankruptcy action. Ultimately, we expect to collect in excess of 97 per cent of the council tax for each year.”
The representative body for the local authorities in the capital, London Councils, claimed that councils have performed better in ensuring council tax collection than other forms of national taxation.
In a statement, they said: “Local authorities do not stop seeking to collect unpaid council tax at the end of the financial year – they are continually working to clear arrears.”
“Councils in urban areas like London face a significant challenge in collecting council tax, with a large and highly mobile population. Despite such significant challenges, they have ensured council tax collection rates between 96 and 99 per cent – better than other forms of national taxation such as income tax and VAT.”
“Councils do an incredible job ensuring council tax is paid by those who can afford to do so – they should not be made scapegoats for those people refuse to pay.”