ÐÇ¿Õ´«Ã½

The commission described the councils' rent collection service as "weak" and said it underperformed compared with other housing services such as housing management.

Slow processing of housing benefit claims, a lack of strategy on rent collection and a greater number of poor tenants were behind the arrears increase.

Just 31% of council tenants are in paid work compared with 50% 20 years ago; delay in settling housing benefit claims accounts for more than £43m of arrears. Personal debt has also risen (see graph).

The report also highlighted "a 'cold war' of mutual mistrust and blame" between housing and housing benefit staff in some authorities, which did not share information or work together.

Roger Jarman, strategic policy adviser for the Audit Commission, said government plans to eventually pay a flat rate of housing benefit to tenants could increase arrears further. "It's very early days but potentially it could make it more difficult for council and housing associations to control their income and manage their arrears." He said arrears are likely to play a bigger role in council and housing association inspections when the commission publishes its new inspection methodology at the end of the year.

Gwyneth Taylor, programme manager at the Local Government Association, said: "More authorities are improving than the opposite." She added that the LGA would like to see fast-track housing courts to deal with arrears.

The report, launched on Wednesday (www.auditcommision.gov.uk), recommends better working between council departments, a clear corporate policy for rent arrears, debt counselling and pre-tenancy information for tenants.