Local authorities have conceded that up to 84% of people on low incomes will refuse to pay council tax after being caught in the net by benefit changes this April, and admit there is little they can do about it.
Ministers have cut the support for means-tested council tax benefit by £500m, and told local authorities to decide where the axe should fall. The result is that 326 town halls in England have put forward "local" council tax schemes – with residents in neighbouring regions facing wildly different penalties.
Nationally the council tax benefit cuts will mean the poor face an average bill of £247 a year from April, a charge from which they are currently exempt.
But because the sums average less than £5 a week, councils are warning that it would "in many cases be uneconomic to recover, with the costs of collection, including legal recovery costs, being higher than the bill".
The result is that councils are budgeting for large losses and potentially widespread non-payment. A series of freedom of information requests by False Economy, a campaigning group part-funded by trade unions, found more than 70 councils were resigned to seeing swaths of residents refusing to pay the tax.
In Harlow, Essex, the local authority expects to collect the new council tax from just 800 of the 5,000 poor households supposed to be paying it for the first time this year. The shortfall will mean a £1.14m black hole in the council finances.
In the Kent borough of Gravesham, the council estimates 70% of the proposed tax will not be paid.
Some local authorities will take unprecedented measures against poor people who will not pay. In North Tyneside, the council says the low level of charge to the poor – amounting to £50 a year – means it is justified in collecting unpaid council tax from "ongoing benefits".
False Economy figures show on average councils are budgeting for a third of residents not paying the new charge.
A spokesman said: "While these forecasts are cautious estimates, it is clear that council tax benefit cuts will cause chaos not just for families and households, but for councils themselves.
"Some councils look set to pursue people with no money through the courts, reviving memories of the poll tax."
Other experts have pointed out that the patchwork of new charges is particularly onerous for the jobless.
The New Policy Institute, which examined all 326 schemes, pointed out that in Sutton the only residents paying a new charge would be unemployed people, who face a flat minimum payment of £3.55 per week.
Nationally the highest minimum payment will be in North Hertfordshire, where poor residents will pay on average a third of the council tax faced by wealthier citizens – a new annual charge of £322.40.
Peter Kenway of the institute said: "The postcode lottery is very complex and will reduce the transparency of the council tax system.
"It also has serious implications for fairness as low-income households with similar needs face big variations in the amount of council tax they will have to pay."
Labour said: "David Cameron's poll tax mark II has been a disaster from inception through to implementation."
Hilary Benn, the shadow local government secretary, said: "Very soon hefty bills will be dropping on the doorsteps of those on the lowest incomes. Making very poor people pay bills they simply can't afford simply doesn't make sense, especially when at the same time the government is giving a tax cut to top earners."
The government said council tax benefit spending had doubled between 1997 and 2010.
The local government minister Brandon Lewis said: "The localisation of council tax benefit will give councils stronger incentives to cut fraud, promote local enterprise and get people back into work.
"Whereas council tax doubled under the last administration, we have taken action to freeze council tax bills for three years, to help hard-working families and pensioners."
Meanwhile, a survey has found that more than 40% of town halls are set to raise local bills.
The communities secretary, Eric Pickles, has promised local authorities in England the cash equivalent of a 1% rise in return for holding rates the same. About 85% took up the offer last year but that number is set to fall, according to figures compiled by the Chartered Institute of Public Finance and Accountancy (Cipfa).
With just over half of billing authorities confirming their intentions, it found 41% intended to push up tax for 2013/14.
