Tyneside council writes off tenants' unpaid rent as it gives up trying to get cash back
A Tyneside council is poised to write-off over £400,000 in rent arrears this year after exhausting all available avenues to reclaim the cash.
According to a finance report, due to be heard at Gateshead Council’s cabinet next week, the local authority is set to write-off £419,473 in unpaid rents from former tenants. In total, there are currently 109 outstanding rent balances on the council’s books.
The breakdown of the debts is as follows:
- Debts created before January 1, 2020 (not legally pursuable after six years): 9 totalling £33,438
- Debts created after January 1, 2020 (no forwarding address or not at forwarding address): 17 totalling £80,021
- Debts created after January 1, 2020 but ex-tenant deceased: 12 totalling £45,310
- Debts created after January 1, 2020 but former tenant in care: 7 totalling £7,824
- Debts created after January 1, 2020 but case is of a “sensitive nature”: 1 totalling 3,789
- Debts created after January 1, 2929 but uncollectable after all methods have been exhausted: 63 totalling £249,091
While council bosses are expected to write-off the debts in a strictly financial sense, it does not mean it could not make attempts to reclaim the money at a future date if circumstances change in each case. The council can however only legally pursue debts that are less than six years old.
But if someone with legally expired debt wishes to apply for council housing in the future their application can be demoted or excluded. The council has seen some success with ex-tenants returning to council and making agreements to pay back such debts this year, totalling £17,037.
However, in the financial year 2025/26, Gateshead Council has been able to recover £440,398 in former tenant debt.
Since 2008, Gateshead Council has also contracted Rossendales Collect Ltd and Network Credit Services to persue debts it considered to be “uncollectable” through council services. In that time, the firms managed to secure the payment of nearly £650,000 owed to the local authority.
A Gateshead Council spokesperson added: “The amount involved in the recent transfer is very small in proportion to our current position which shows collection performance at 99.89% of all rent charged.”
Gateshead Council’s cabinet will meet to decide on the report on Tuesday, March 17.