£800m tax and rates uncollected

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Local authority coffers missed out on £600,755,000 in unpaid council tax and £214,624,000 in non-domestic rates, Government figures showed.

But Local Government Minister John Healey hailed an improvement in collection rates, saying they had improved in 2007-8 for the eighth year running.

As a result, 97.1% of council tax was paid last year, compared with 96.9% in 2006-7, the Department for Communities and Local Government said.

The proportion of non-domestic rates collected in-year rose over the same period from 98.7% to 98.8%.

Mr Healey urged councils to keep chasing arrears and improve collection rates further.

"It is only fair on other council tax payers that everyone pays what they owe," he said.

In 2006-7, the latest year for which figures are available, more than £130 million of unpaid council tax was written off by town halls.

According to the figures, £20,008,122,000 was collected in council tax year, despite bills totalling £20,608,877,000. Bills for non-domestic rates amounted to £17,963,838,000, of which £17,749,214,000 was paid.

Mr Healey said efficiency targets by councils had been met a year early and were set to be exceeded by £1 billion. Further savings of £4.9 billion are being demanded of local authorities over the next three years.