Harrogate Borough Council will write-off over £83,000 of debt it’s owed from businesses, residents and housing tenants.

Cllr Graham Swift, the council’s cabinet member for resources, enterprise and economic development, approved two reports that said the debts would be “uneconomic to pursue further.”

The first report includes details of £44,167 worth of miscellaneous debt with the largest being two Harrogate Convention Centre invoices from Kerrison Craft Exhibitions Ltd worth £19,940.

The report says the exhibitions firm has been wound up and “there is little hope of any remuneration”.

The company was due to organise The British Craft Trade Fair (BCTF) and British Craft & Design Fair at the convention centre until 2025.

A Harrogate Borough Council spokesperson said the event owner affiliated to Kerrison Craft Exhibitions Ltd has died.

Paula Lorimer, director of Harrogate Convention Centre, said:

“We are deeply saddened by the untimely death of the event organiser. We are hopeful the event will be purchased by an alternative organiser in the future.”

Read more:

• Harrogate crime hotspot gets £6,000 railings to prevent loitering
• Zoë Metcalfe confirms bid to become North Yorkshire’s first mayor

The Local Democracy Reporting Service contacted the company’s liquidator, Opus LLP but it declined to make a comment.

Of the £44,167, there is also £3,717 worth of debt related to planning and £3,854 to waste and recycling.

The council will be able to recover £6,460.94 in VAT.

The report explains why HBC has decided not to pursue these debts any further:

“The costs involved are too great, the probability of success is too slim or there are simply no further legal options available.”

Meanwhile, a second report was approved by Cllr Swift related to writing-off £39,059.11 from former council housing tenants.

However, it says the ‘substantial majority’ of this sum will be written-off because the tenant has died.

Although the report adds that some debts are from tenants who “abandoned their homes and remain untraceable.”

Schools in Harrogate and Knaresborough could be forced to lay-off teachers because of spiralling debts, a councillor has warned.

Cllr Geoff Webber, a Liberal Democrat who represents Harrogate Bilton and Nidd Gorge on North Yorkshire County Council, said schools may be forced to act after new figures showed debt increasing.

A council report published last week on schools in Harrogate and Knaresborough showed four schools are projected to have debts totalling £1.6 million by March 2021.

By March 2023, this is forecast to have risen to five schools with total debts of £1.6 million.

Cllr Webber told the Stray Ferret:

“The schools will start off with an overspend one year and will not be able to bring that debt back under control. It just spirals from there.

“When the schools are in debt the only way for them to save money is to make staff redundant. It’s usually the more experienced ones that go first.”

The financial situation is bleak across the county: 37 schools in North Yorkshire have total debt of £7.2 million.

This is expected to soar to 93 schools with total debt of £18.3 million by 2022/23. This would mean 40 per cent of schools in the county will be in debt.

Read more:

• Woodfield school receives £28,500 to improve street safety
• Harrogate primary school’s plea: help our pupils who are isolating
• Harrogate restaurant serves first free school meals

Two primary schools, one secondary school and one special needs school are currently in debt in Harrogate and Knaresborough. The council paper does not name them.

The government has frozen education funding in recent years.

North Yorkshire misses out

The funding formula focuses on deprivation. So schools in more affluent areas like the Harrogate district tend to miss out.

The report says:

“North Yorkshire secondary schools are placed 133 out of 149 local authorities in terms of funding.

“On average, a school in North Yorkshire will receive £5,151 per pupil in 2020/21 compared to a national average of £5,496.

“Comparing the funding for a 1,500 pupil secondary school this equates to a difference in funding of £0.5m.”

Cllr Webber said the council should use its reserves to plug funding shortfalls if the government does not increase funding.

Cllr Patrick Mulligan, the Conservative executive member for education and skills at the council, who represents Airedale, told the Stray Ferret:

“I do sympathise with the schools. It has been difficult for them since the funding was frozen with austerity. This puts us in a difficult position.

“We have been lobbying MPs to ask for more school funding. We had a 3% rise in funding per pupil this year and hope that continues.”

Harrogate Borough Council failed to meet targets for council tax collection, business rates and debt recovery this past year – which included one invoice worth £180,000.

According to a performance report due before the authority’s cabinet, the council missed its debt recovery target by more than half as just 18% was recovered against a target of 60%.

The authority said the performance was “significantly below” target. A total of £296,000 was referred to legal services to be recovered, of which £180,000 came from one invoice.

Officials said in the report that payment terms have been negotiated on the invoice and that they expect to recover the sum.

Read more:

• Harrogate Council faces £15 million coronavirus shortfall
• New budget amid coronavirus costs ‘not necessary’, says council
• County council needs more funding to tackle future coronavirus costs

Meanwhile, the borough council collected 97.9% of council tax against a target of 98.3%.

The authority also missed its business rates collection target by 1%.

Council bosses put part of the performance down to a slowing of collection in March when the country was put into lockdown amid the coronavirus outbreak.

Further support for those struggling to pay their council tax was revealed last week when the council offered to cut bills for vulnerable rate payers by £150.

It comes as the council has been hit with a deficit of £15 million amid the pandemic, part of which is down to a loss of income due to lockdown.

Senior councillors are set to discuss recovery plans tonight, which will include reviewing the authority’s budget and reserves.

Harrogate District Hospital bosses have welcomed the government’s decision to write off its £4.8 million debt.

The hospital took out the multi-million-pound loan to pay back its suppliers more quickly but said the “reset of finances” was helpful going forward.

107 hospital trusts have an average of £100 million in revenue debt, with the two trusts with the highest debts reaching a combined total of over £1 billion.

In total, the government will write off £13.4 billion of NHS debt to ensure hospitals have the “necessary funding and support to respond to coronavirus.”

Under new rules, hospitals in need of extra cash will be given it with equity, rather than needing to borrow from the government and repay a loan.

Jonathan Coulter, finance director at Harrogate and District NHS Foundation Trust, said:

“The loan we took out was to enable us to be able to pay our suppliers more quickly. In line with the rest of the NHS, we think this ‘reset’ of finances is helpful for trusts both at this point in time and going forward over the coming years.”

The government has said that while many NHS trusts manage strong finances, some took out loans to plug financial gaps in their day-to-day revenue or capital infrastructure budgets.

Health Secretary Matt Hancock said:

“As we tackle this crisis, nobody in our health service should be distracted by their hospital’s past finances. Today’s £13.4 billion debt write off will wipe the slate clean and allow NHS hospitals to plan for the future and invest in vital services.”