Council criticised for writing off developer's debt

A local authority should apologise for writing off a long-standing debt of nearly £500,000 owed by a developer, a councillor has said.

Iliad Ltd had owed the money to Rotherham Council since 2013 and despite "all avenues being exhausted" to recover it, the company has since gone 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.

A council spokesperson said even with "the best due diligence in the world" businesses could fail, but critics called it a "serious failing".

At a recent council meeting, there was a debate about whether officers would review the failure of the regeneration scheme.

Councillor Saghir Alam, from the finance and safe and clean communities department, said: "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."

He added: "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."

The agreement was that Iliad would enter into a long-term lease with the council and pay it once the buildings were completed, according to the Local Democracy Reporting Service.

The council has previously said that "provision had been made" in its accounts for the possibility that the debt might not be repaid.

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