OXFORD City Council is so poor at collecting council tax it has been told to "aspire to be average".

The verdict came from an independent consultant and underlined the Town Hall's weak performance in collecting council tax.

It fails to collect about £3m a year and auditor Jez Leaper said its most realistic improvement could only to be rated as "average".

Mr Leaper criticised the council's tax-collecting performance for being as bad as it was a decade ago.

During a powerpoint presentation Mr Leaper, of auditors KPMG which was paid £12,000 to compile a report on the Town Hall's revenues and benefits department said he could not disguise the truth of how badly the city council was performing.

For years, the Town Hall has struggled to collect all the money owed from taxpayers.

Figures show that in 2005/06 the council collected £49m of the £52m owed 94 per cent.

But the figure should be 96.9 per cent.

Mr Leaper said: "There are things you are doing better, but they have not fundamentally improved the services.

"It's high cost and low performing and frankly it was ten years ago."

The council has resisted handing its collection department over to a private company for now, but has not dismissed outsourcing if the situation fails to improve.

Exploratory talks with neighbouring South Oxfordshire District Council and Vale of the White Horse District Council about joining their council tax collection partnership fell through with the authorities understood to be "lukewarm" about welcoming Oxford onboard.

City councillor Stephen Tall, executive member for better finances, said: "My first job is to make sure those parts of the council that are not currently performing well do so. The second is then to look at alternatives and in some cases that may mean direct outsourcing.

"If performance doesn't improve in the next year we will need to make sure there are alternative options available to us.

"But you cannot automatically assume privatisation will result in better or cheaper services.

"The council should not aspire only to be average, average is not good enough, but by going from poor to average the council can at least demonstrate it can improve in this area."

Mr Leaper told councillors that keeping the service in-house, as is now the case, could result in a "significant risk of failure".

City council revenues and benefits manager Paul Warters said: "In the medium term if we can improve our performance to a level that is no longer cause for serious concern, that would be an excellent step in the right direction.

"This is the only part of the department that has not seen significant improvements, but I am confident there will be."