Local authorities in England will be issued with fresh guidance on how to handle “middle-class fly-tipping” after councils were found to have taken an overzealous approach to fining people who leave items outside their home for neighbours to collect for free. The local government and social care ombudsman (LGO) said she was concerned about an increasing number of incidents over recent months where councils had acted disproportionately. “We have found fault in some cases across London in recent months, particularly where people have left their rubbish out at the wrong time and councils have taken an overly zealous approach to enforcement,” said Amerdeep Somal. “Nobody wants to live in a messy environment, but we urge councils to take a proportionate approach to enforcement.” “Middle-class fly-tipping” is the name critics give to the practice of leaving household items on the pavement, often with a note attached offering them to passersby for free. The nine-page guidance, to be published by the end of the year, will tell councils that they should think carefully about how to act in each case. Officials should initially give advice, then provide a written warning and only then move on to issuing a modest financial penalty, it will instruct. “In all cases we would expect the council to think carefully about using the right tool at the right time,” Somal said. A private litter warden gave Isabelle Pepin a £500 fixed penalty notice (FPN) for fly-tipping this week after she left an Ikea cabinet outside her home for people to take. In another case, a carpet fitter from Bournemouth was also given a £500 FPN for leaving an off-cut outside his home for someone to take. Julie, also from Bournemouth, is fighting a £500 FPN she is unable to afford to pay – and which will increase to £1,000 in two weeks’ time – for leaving six planks of wood stacked outside her garden gate for people to collect. “The private litter warden had me in tears,” she said. “I told him I didn’t realise I was doing anything wrong and offered to take the wood back into my garden immediately. But he said he was being lenient and what I’d done was so bad that he should actually be taking me to court to get a £50,000 fine.” Non-statutory government guidance says councils should not use enforcement or impose penalties as a means to raise money, but campaigners say most fines are issued by private companies engaging in corrupt practices, including fining people for non-offences or trivial acts, litter dropped by accident, and tailing or following people. If the guidance were made law, someone fined by a private company on commission could appeal against their penalty in court and say it was illegally issued. Campaigners say it could make the fining-for-profit market collapse. Successive ministers have promised to use powers in the Environment Act 2021 to put the guidance on a statutory footing, but the Department for Environment, Food and Rural Affairs declined to answer the Guardian’s questions about its plans to bring it into law. In the absence of legal constraints, Somal said she was concerned about councils’ use of private litter wardens. “We expect there to be comparable mechanisms in place to ensure contractors act in a professional and proportionate manner,” she said. There are no formal grounds for appealing against an FPN for littering, something else the LGO is concerned about. “We expect councils to have a clear and accessible route to resolving residents’ concerns about fines,” Somal said. The LGO’s announcement was welcomed by the civil liberties group Manifesto Club, which has long campaigned on the issue. “The guidance makes good points but it avoids the elephant in the room: quite simply, ‘payment per fine’ contracts should not be legal,” said Josie Appleton, the club’s convener. “These companies don’t get paid unless they issue fines, and the more fines they issue the more money they make. People employed on these terms are not going to be impartial or act in a ‘professional and proportionate’ manner.” The Lib Dem peer Tim Clement-Jones, who has frequently spoken out against private companies that fine for profit, agreed. “I’m delighted the LGO has stepped in to clarify matters but councils should take particular care when awarding enforcement contracts that they do not provide an incentive for the contractors to levy unnecessary and disproportionate fines,” he said. Karl Williams, a professor of resources, energy and environment and director of the Centre for Waste Management at the University of Central Lancashire, said he had sympathy for councils. “For every person who does community recycling properly, there’s someone who doesn’t, who blocks pavements with their items or leaves something out that gets vandalised and then no one will take,” he said. “There’s also a grey area defining what recycling is. A mattress is fly-tipping but what about a table and six chairs that block a pavement?” he asked. He said another issue was that leaving out bulky items could encourage unlicensed waste carriers who offer to take it away for a small sum. “You’re then going into a whole new area where residents are paying illegal people to take waste away that will end up being illegally dumped,” he said. The LGO has said it will not be prescriptive when defining what fly-tipping is. “That’s for councils to decide,” said Somal.