Councillor calls for apology after council writes off debt of almost £500,000
An opposition councillor has called for a review and apology after Rotherham Metropolitan Borough Council wrote off a long-standing debt of almost half a million pounds from a failed regeneration project.
The council said that ‘all avenues have been exhausted’ to recover the debt owed by developer Iliad (Rotherham) Ltd dating back to 2013, and it was written off last year.
Council documents state that Iliad failed to pay a lease premium of £466,360.22 to the authority after getting into financial difficulty and going into liquidation.
The funds related to the Westgate Demonstrator Project, which aimed to revitalise the Westgate area of Rotherham Town Centre with new buildings and infrastructure, including a mix of residential, commercial, and leisure spaces.
During a council meeting on January 15th, Councillor Joshua Bacon questioned Councillor Saghir Alam, cabinet member for finance & safe and clean communities on whether the council would review what went wrong with the project.
Councillor Bacon also called on RMBC to apologise for the ‘serious failing’.
Coun Alam told the meeting: “I’m afraid that even with the best due diligence in the world, sometimes private companies go bust.
“The council has taken steps over a number of years to pursue the debt. However, the council’s efforts have not been able to recover outstanding debt.
“The council always carries out financial viability checks[on] businesses.
“While the council takes steps to ensure it is working with financially robust organisations, the risk of businesses falling into financial difficulty can never be fully eradicated.”