An almost £2million debt write-off of uncollectable debt was discussed at a Richmond council cabinet meeting on Thursday evening.

But the member for finance, Councillor Geoffrey Samuel, said that although the figure seems high, it represents 0.2 per cent of all debt, which is one of the lowest as a proportion of all debt in London.

He said certain debts, such as those accrued when a company becomes insolvent, are ‘unavoidable due to English law’.

Cllr Samuel said: “Under English law a company can shut up shop, and all their debts are wiped clean – and then they can start up again under a new name.

“Debts like that – or when someone passes away and we cannot reclaim their debt – we can do nothing about, unfortunately.

“But for each year I have been the cabinet member for finance the figure has dropped – and I inherited a very large figure when I came in.

“We have a policy now of taking things to court a lot more – there is always a presumption of taking things to court.”

Among the reasons for uncollected debt are debtors absconding, bankruptcy, companies dissolving, debtors passing away – and debt is also wiped if it has stood for six years or more.

However, the opposition Liberal Democrats said the rate of business rate payments which had not been made, mainly due to businesses ceasing to operate, was ‘startlingly high’.

Nearly £1.5million of the £1.98million write-off was unclaimed business rates.

Richmond Lib Dem leader Gareth Roberts said it threw into question the council’s ability to forecast future revenue and spending.

He said: “What's of particular concern about these figures is the startlingly high level of business rates write-off.

“Given that the previous Chancellor, George Osborne, announced that he was going to cut grants to local authorities yet allow them to hold onto business rates revenues, this level of right off must raise serious questions about the council's ability to forecast income levels and plan accordingly."

Also discussed in Thursday’s cabinet meeting was the merging of housing allocation policy with Wandsworth council as part of the two local authorities’ shared staffing agreement.

Cllr Samuel said this was ‘standard procedure’ in order to unify the staff dealing with housing allocation.

However, he did allay the fears of Richmond borough residents on waiting lists for social housing that they might be placed in Wandsworth.

Cllr Samuel said Wandsworth council has a larger stock of available housing and that they would not want to ‘give us their social housing’.