Birmingham failed to collect almost £15 million in council taxes last year, it emerged today.
The rate of non-payment has increased from less than £12 million last year.
Local Government Minister Phil Woolas said councils must do better - because every penny which went uncollected meant less money was going to local services.
In the last financial year, Birmingham collected £232.5 million from residents. But it was owed another £14.8 million which it never received.
This meant it collected 94 per cent of the total. A council spokeswoman said: "In January 2006, the city replaced its council tax and business rates computer system.
"As with all major system replacements, it was anticipated a temporary down turn in collection rates.
"Ratepayers can be reassured that outstanding debts are now being actively pursued using all the powers available, including court proceedings, attachment of earnings and bailiffs."
Mr Woolas said: "Local authorities across the country have worked very hard to achieve even further improvements in council tax collection rates.
"These improvements are vital so that councils can continue to provide good quality public services for their communities - at the same time, unpaid taxes create an unfair burden for the vast majority of people who do pay."
