Powys council could write off a £177k debt - after it overpaid a grant
Senior councillors will be asked to write off a debt of just over £177,000 which had been caused by its own mistakes in overpaying a grant to an applicant
At a meeting of Powys County Council’s Liberal Democrat/Labour Cabinet on Tuesday, March 24 senior councillors will receive a report that explains that they need to take decision to write off debts when the sum is over £100,000.
The report said: “An application for just under £240,000 was received for Town Centre Capital Grant scheme, a Welsh Government funded programme in 2020 from a private applicant and their associated company for works to a commercial property.”
This grant supported renovation and improvement works to commercial properties and was administered in Powys by the council’s economy team.
The applicant told the council that they could match fund the grant through borrowing.
The report said: “The application was successful, the company was set up as a supplier on the council’s finance system and claims were submitted in arrears as works progressed.
“All eligible works were completed and the applicant was entitled to receive the full grant.
“In April 2021 the final payment order raised by the council was incorrect.”
This mistake saw the council pay the full grant amount – rather that the smaller final payment that was due – and caused an overpayment of £177,487.
The report continued: “The council attempted to recover the overpayment through immediate direct engagement with the applicant.
“Despite repeated attempts, including the involvement of enforcement agents, recovery was unsuccessful.”
As the mistake was the council’s, claiming the money from the Welsh Government is not possible.
Further complications have been caused by the applicant’s company going into liquidation last year.
The report added that the applicant died recently and that: “Any residual assets now fall within probate processes.
“It is unlikely that the estate will realise sufficient value to cover the outstanding debt.”
The council has registered a Local Land Charge and sought to place a restriction on the title of the relevant properties but admits that it’s unlikely to recover the debt as other creditors take precedence.
The report recommends that cabinet write off the debt and the council’s internal auditors – SWAP – review the administration and payment processes and practices for this grant scheme.
This will be done in the hope of learning lessons for the future.
