Debate contribution: Unpaid Rates

Debate contribution by Mr John O'Dowd on 21 October 2025.

MLA

Mr John O'Dowd

Party at the time

Sinn Féin

Date

21 October 2025

Type

Debate contribution (made as a minister)

Business

Private Members' Business

Heading

Unpaid Rates

Assembly identifier

Official Report component 5197744

Read the official Assembly record

Text

Thank you, a Leas-Cheann Comhairle.

In a very straitened financial operating context, the revenue from rates is key to the provision of much-needed public services, such as health and education, not to mention the many services that are provided by councils to support local communities. That is why, as Minister of Finance, the issue of the collection of rates is high on my agenda. Land and Property Services has a strategy for improving rates collection that is focused on making it easier to pay while balancing compassion for those who are struggling to pay. Indeed, Members write to me asking for such compassion for their constituents. The constituents for whom they write to seek compassion are included in the rates figure that is before us. I assume that the Members who write to me are not suggesting that I do not show compassion to the people for whom they make representations. Last year, my Department collected £1·63 billion in rates revenue, the highest ever amount of rates that was collected in a single year, which represented an increase of over £90 million from the year before. Even with that level of performance, of course, there will be outstanding rates that have not been recovered, including unpaid debt that has accumulated over a number of years and is carried forward. We have faced, and continue to face, extreme fiscal pressures in our society and economy, yet my Department continues to strive to increase the amounts that are collected year-on-year.

For context, the value of uncollected rates of £145 million, as mentioned in the motion, represents less than 2% of the £8·261 billion collected over the past six years. So far this year, we have collected almost £1 billion and driven down arrears from April by 20%. Whilst good progress has been made, I am, of course, focused on the balance remaining. Recovery of the £145 million remains a priority. Significant efforts are ongoing to ensure that as much of the revenue owed is paid as quickly as possible. It would be useful to Members if I broke down the £145 million figure further: £59 million has already been subject to legal recovery action, enabling further legal action to be taken while rates continue to remain unpaid; £12·8 million is currently being repaid through active payment plans or agreed arrangements with Land and Property Services. That money is being collected over an extended period, reflecting a flexible approach that supports ratepayers. I am confident that no Member of the House disagrees with the principle of allowing ratepayers who want to pay the additional time to do so. As was pointed out by Linda Dillon, many of those people who find themselves in difficulty are honest, hard-working people who want to do the right thing. Some of the language in the motion referring to "law-abiding businesses and households" who pay is disappointing. Others who are law-abiding find themselves in difficulties where they cannot pay, so let us not paint everybody with the same brush. The challenge for LPS is that it has to deal with each individual circumstance on its own merits. That can be complicated, convoluted and difficult, at times, as Mr Gaston pointed out in relation to one case, which, I believe, is ongoing, so I will make no more mention of it. It is important to understand that the approach contributes to the overall amount of rates still outstanding. The remaining balance of £73·5 million is under review to obtain payment or progress through legal action within this rating year. Within that balance, there are rates that are not suitable for legal recovery, such as rates pending valuation appeals or settlements of probate on estates following bereavement. It is important that I am clear on this point regarding write-offs: the writing off of rating debt is a legitimate provision that accepts, under certain prescribed circumstances, that collection is simply not viable. My officials cannot simply decide to reduce debt balances through write-offs. There are agreed checks and balances in place to ensure that any such action is in accordance with the legislation and good governance. Write-off is the final step taken after all recovery options have been pursued. On the figure of £82 million in write-offs over the past six years, 80% of the amount written off — that is, £67 million — was due to what is referred to as "legal reasons". Those are not discretionary decisions but are obligations under law that prevents further recovery, often involving businesses that have ceased trading or have gone into receivership.

That is an important distinction to make. Broadly, there are two sets of people when you come to rates debt: those who cannot pay and those who will not pay. We have to pursue rigorously those who refuse to pay, and we have to support and work with those who cannot pay to find a way for them to deliver their liabilities. That is the broad breakdown of where people are at. Going back to the collection figure of £1·63 billion last year, the significant efforts by my officials to collect and recover rates owed should not be underestimated. Calls have been made to increase the Department's collection rate, with one previous point repeated here today: the mooting of 100% collection targets. The prospect of collecting the full amount of rates revenue owed is one that we all support. However, regrettably, that prospect is not realistic. During the debate, several Members alluded to why that is not the case. The current target that I have set of 93% is a considered position, setting a standard that measures collection performance against all collectable rates and strikes a balance between ambition and deliverability. The process of valuation, assessment, billing and applying reliefs is complex and evolving, and I have to say that comparing our collection rate to that of England and elsewhere does not necessarily simply match. It is a very complex process to match both over and go back on forth on those. I have engaged with my officials on that on a number of occasions, and I am satisfied that the target that we have set is comparable with other regions when you look at all the facts and at what you are measuring. The process of valuation, assessment, billing and applying reliefs is complex and evolving. There are necessary elements of process that, together, combine to make the administration of collecting revenue challenging. We must recognise that there is a cost in money and time in recovering rates, and we need to accept that there are times when it is uneconomical to do so. Many Members will have first-hand experience of asking Land and Property Services to provide support for constituents who are struggling to balance household and business bills. Not all ratepayers are able to pay what is owed, through no fault of their own. In those cases, officials have a responsibility to be understanding and support the ratepayer to come to a payment agreement that is affordable and sustainable. On the other hand, there are those who can make payment but wilfully choose to avoid doing so. Those cases require relentless recovery and enforcement action and can often take years to resolve. It is fair to say that, sometimes, distinguishing clearly between those who cannot and those who will not is challenging, and my officials work hard in managing the demands in handling both. I am pleased to say that good progress has been made in the year to date in rates recovery, and I am looking forward to a positive end-year out-turn against the target set. I am in no doubt about how difficult it is to maintain those levels of collection in a very challenging operating environment; however, I am committed to striving to do more. Land and Property Services has a revised strategy for improving rates collection over the next three years. Supporting the principles that I have endorsed in the road map for rating, the strategy is built around three key aims: making it easier for ratepayers to pay; supporting those who need help to pay; and taking effective action against those who will not pay. My Department has set out not only a clear ambition to increase collections but the approach to achieving that ambition. Key deliverables for this year include new digital services that will enhance ratepayers' experiences through, for example, online billing and flexibility in managing payment options as well as using data-driven insights to strengthen decision-making on enforcement action. My Department is committed to maximising rate collection, and I think that the £1·63 billion that was collected last year demonstrates that. I commend my officials for their performance to date in very challenging circumstances. I also recognise that there is always a need to do more, and a process is under way for, amongst other things, my plans for rating policy reviews and a rate collection strategy. However, let me be clear: the overarching approach is to not lose compassion and understanding for the circumstances that people find themselves or their businesses in. That is why making it easier to pay and setting up plans to recover in slower time remain the top priorities for me as Minister. I could ask my officials to have a more ruthless approach, for instance, with businesses and to pursue them more rigorously, but that will put more and more businesses out of business each year. We will collect more rates, or maybe we will not, because, once they are declared bankrupt, we might not be able to get the rates at all. You have to give the freedom to officials to deal with it on a case-by-case basis, working within an agreed framework. I believe that the framework that we have agreed and that will be presented to the Committee and others is the best way forward for what is a hugely complex and, at times, difficult process to be involved in. However, I believe that we are making significant strides in the right direction.

1,672 words. Text as published by the Northern Ireland Assembly.

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Assessed 21 October 2026 at 13:35 UTC by jev-1.13.0 (requested as typesafe/jev) under rubric 2026.10-r9, methodology 1.9.

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