'Cash-strapped' council leaders have agreed to write off more than £1.2 million of irrecoverable debt.

The money owed to Stoke-on-Trent City Council included £556,087 in unpaid council tax and £623,648 in unpaid business rates, with each individual debt being over £25,000.

Cabinet members approved the decision to write off the debts, which have accumulated since September 2023, at their meeting on Tuesday.

They also noted the writing off of £379,022 in business rates owed by Cineworld, River Island and Poundland, in relation to restructuring plans ordered by the High Court.

Debts over the £25,000 threshold can normally only be written off with cabinet approval – smaller debts can be written off by officers under delegated powers.

The council says that it will only write off debt as a 'last resort' after all routes for recovering the money have been exhausted.

Most of the debts written off by cabinet (£1.15 million) related to individuals going bankrupt or companies being liquidated or dissolved. But £64,943 related to the debtors absconding.

The council uses various systems to try and track down debtors, including its own records, the electoral register, Experian and Companies House. But if a debtor moves out of the country, that leaves the council with 'no viable opportunity for recovery'.

Council leader Jane Ashworth told the cabinet meeting that the authority had no choice but to write off the debt.

She said: "Nobody wants to write debt off, and so I think it's important to explain exactly why we have to do it, particularly when we are so cash-strapped as a council.

"Of the £1.2 million, about £1.15 million is being written off due to bankruptcy or liquidation. So there is nothing for us to be able to get after.

"Of the remaining money, £65,000 is being written off due to the debtor absconding. Now just because someone hasn't answered a letter or two doesn't mean that we consider them to have absconded.

"It means that after we've gone after them, after studying all the sources of information, we haven't been able to find them."

Councillor Majid Khan, cabinet member for health integration and wellbeing, asked about the steps being taken to reduce the need for similar write-offs in future.

He said: "What are we doing, or what's in place, to ensure that we don't allow this kind of debt to build up again, and in a few years' time end up in the same situation?"

Councillor Finlay Gordon-McCusker, cabinet member for regeneration, said the council offers support to small businesses and individuals so they are better able to pay what they owe.

Councils are required to write off debts owed by companies that have entered into a restructuring plan sanctioned by a High Court decision.

This is aimed at supporting companies facing financial difficulties to continue as going concerns, instead of collapsing and leaving creditors even worse off.

The city council had written off business rates owed by three companies with restructuring plans: Cineworld, River Island and Poundland.

Cineworld had £27,249 written off in relation to its Hanley cinema, while River Island had £142,910 of debt owed by its city centre and Festival Park stores written off.

Poundland had £208,863 written off relating to business rates arrears for four premises in the city.