GLASGOW is owed more than £13million in council tax by residents struggling to make ends meet.

And as Chancellor George Osborne was today delivering a budget set to target benefits, councillors warned that the city, with many of the poorest families in the UK, is suffering disproportionately.

It has led to calls to reform the system .

Despite the collection rate being at its highest since Glasgow City Council was formed, more than £13.2m was owed to the local authority in the last financial year.

During that year 239,143 ‘First Reminder’ notices were issued to households in the city, while 86,874 accounts were passed to the council’s debt management partners for collection.

In 2013/2014 £12.4m was owed and there was £12.1m in arrears the previous year.

However, the council’s collection rate has increased overall from 85.6% to 94.6% in the last decade.

When the council was formed in 1996 it had a collection rate of just 73% - the lowest in Scotland.

Local authority bosses have collected £180.9m from tax in 2014/15 and bosses continue to pursue for outstanding charges.

But councillors say communities are struggling to pay up because of low incomes, household and food costs, bedroom tax as well as other austerity measures.

Glasgow North East SNP councillor Gerry Boyle said: “A large proportion of households in my ward cannot afford to pay council tax even though they are working.

“Their earnings place them in the lowest income sector and the small council tax relief that they receive does not really assist them as they have higher priority costs like food and clothing for their families.

“They are concerned that the attack on the benefit system in this week’s budget are going to seriously impact their ability to pay for their daily living costs, never mind their council tax.”

Mr Boyle, who is on the cross party payday lending sounding board, said the collection process was not suitable because the council is “unable to reject households who clearly are unable to pay their debts”.

Mr Boyle added: “Council tax is an unfair and inefficient way for households to contribute to the finances of the city and a better way must be found.”

Labour’s Hillhead councillor Martin McElroy said the figures show improving collection rates.

He added: “However I often meet constituents who have found themselves in serious financial difficulty because of benefit sanctions."

Alan Benson, director at Milnbank Housing Association in north Glasgow, said tenants were "definitely struggling from benefit cuts".

He added: “It makes it difficult for people to afford to pay council tax with all the other bills.”

He said the Scottish Government's discretionary housing payments helped people affected by bedroom tax.

But those who did not apply for the emergency housing fund could be hit by the extra payment.

A council spokesman said: “Today, the city’s collection rate is higher than ever before and Glasgow is the fastest improving authority in Scotland for revenue collection.

“This has been achieved through investment in new systems; changes that make it simpler to pay bills, and a debt management policy that focuses on breaking the cycle of debt for people who regularly find themselves in arrears.”