Principal Auditor’s report finds £9.5m owed in rates

The Principal Auditor’s Report 2018-2019 found a “marked escalation” in rates arrears with £9.51m owed in March 2024, although recovery efforts have since been introduced.

The report detailed how rates arrears increased from £4.8m in March 2015 to £9.5m nine years later, “representing an average annual increase of 10% and an overall increase of £3.49m in the 5-year period”.

Included in the arrears outstanding in 2024 were penalties raised for the non- payment of accounts, the report said stood at £3.39m equating to 35.6% of the total debt.

The report highlighted how last July, Land Property Services introduced a new rates discount as part of their Rates Recovery Policy.

This discount was available to landlords who choose to settle their tenants' arrears in full, through a one-off lump sum payment.

Landlords benefitted from a 50% discount for shops and restaurants, 20% discount for office spaces and 10% discount for domestic spaces.

The discount is applied on a case-by-case basis and could be used only once per Rates account.

“The acting accountant General confirmed on 8 May 2025, that this new initiative had already resulted in rates arrears recoveries totalling £132k,” the report said.

“The acting accountant General further informed me on 8 May 2025 that, in 2025 the recovery process continues aligned with pre-Covid-19 procedures.”

“She explained that between January and March 2025, a total of 728 30-day letters had been issued.”

“She further informed that LPS had confirmed that the next stage, i.e. legal letters, was currently underway, with summonses and court orders anticipated during the first quarter of 2025-26.”