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

Transport and Major Work Manager

Slough Borough Council
£54,556 to £60,085 per year Inclusive of Local Weighting Allowance of £1096
Drive the future of transport and infrastructure in Slough Slough, Berkshire
Recuriter: Slough Borough Council

Director of Family Based Care - North East Regional Care Co-operative

Durham County Council
£119,532 per annum
This position is hosted by Durham County Council. We are seeking an exceptional senior leader to take on the pivotal role of Director of Family Based Durham
Recuriter: Durham County Council

Delivery Director - North East Regional Care Co-operative

Durham County Council
£119,532 per annum
This position is hosted by Durham County Council. We are seeking an exceptional leader to take on the pivotal role of Delivery Director for the North Durham
Recuriter: Durham County Council

Chief Executive - North East Regional Care Co-operative

Durham County Council
£158,084 per annum
This position is hosted by Durham County Council. We are seeking an exceptional Chief Executive with the vision and leadership to transform regional Durham
Recuriter: Durham County Council

Underground Utility Surveyor

Amey
£Competitive
We have an exciting opportunity for a Fixed Term Underground Utility Surveyor to join our TSIC account. Cumbernauld, Glasgow
Recuriter: Amey
Linkedin Banner