Martin Ford 06 May 2021

Lambeth to reimburse £27m of water bills

Lambeth to reimburse £27m of water bills image

Lambeth LBC faces a bill of up to £26.5m to reimburse residents overcharged for water bills.

The council’s decision to pay out the money follows years of legal wrangling over agreements under which local authorities collected charges on behalf of Thames Water.

Lambeth retained a proportion of the charges, which were agreed by the water company, and, in return, was responsible for pursuing tenants for non-payment.

Officers believe Thames Water has 70 ‘broadly similar’ contracts with other London boroughs, district councils and housing associations.

However, the High Court has ruled that, under such arrangements, councils should be classed as a ‘reseller’ and not an agent, and therefore households legally should have received discounts on their bills.

A court of appeal test case was dismissed in October 2020 and Lambeth’s legal experts have concluded ‘further pursuing the test case at the Supreme Court would not result in success’.

The council is facing costs of almost £18m to reimburse current tenants and up to £8.6m for former tenants, although it expects actual costs to be less in the latter case.

It has £22m of reserves put aside to cover the reimbursement.

The agreement between Lambeth and Thames Water was terminated in March 2020.

In a report, officers concluded: ‘With hindsight, this means that the council’s arrangements with Thames Water were poor from a commercial perspective because it has taken on the debt collection administration and bad debt risk associated with the water charges without any consideration in return.’

SIGN UP
For your free daily news bulletin
Highways jobs

Interim Head of Finance - Transactional Services and Systems

Essex County Council
£0.0000 - £700.0000 per day
Interim Head of Finance - Transactional Services and SystemsTemporary, Full TimeUp to £700 per day (Umbrella, Inside IR35) 4 days per weekLocation
Recuriter: Essex County Council

Social Worker (Hospital Team)

The Royal Borough of Windsor & Maidenhead
£40,192 - £44,012 per annum
We have an exciting opportunity for an experienced Social Worker to join us! Maidenhead, Berkshire
Recuriter: The Royal Borough of Windsor & Maidenhead

Environmental Health Officer

North Yorkshire Council
£42,839 - £47,181 per annum
Are you passionate about protecting the environment and promoting public health? Skipton, North Yorkshire
Recuriter: North Yorkshire Council

Assistant Director (Financial Management and Accountancy)

Calderdale Metropolitan Borough Council
£103,464 | 37 hours per week | Permanent
We will be celebrated for our distinctive heritage, nature and creativity that everyone can enjoy. Calderdale, West Yorkshire
Recuriter: Calderdale Metropolitan Borough Council

Assistant Director (ICT and Digital Transformation)

Calderdale Metropolitan Borough Council
£103,464 | 37 hours per week | Permanent
We will be celebrated for our distinctive heritage, nature and creativity that everyone can enjoy. Calderdale, West Yorkshire
Recuriter: Calderdale Metropolitan Borough Council
Linkedin Banner