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London council challenging High Court water charges ruling
A London borough is challenging the landmark High Court ruling that Southwark Council overcharged tenants in a water collection deal.
Barking & Dagenham Council confirmed to Inside Housing that it is “supporting a challenge to the decision”, but declined to comment further.
In 2016, a judge ruled that Southwark Council had been buying water from Thames Water and reselling it to tenants without passing on the savings it made through the arrangement, meaning it was charging more commission than legally allowed when collecting water rates.
The authority has subsequently agreed to repay 41,000 tenants a total of £21m.
At the time, Thames Water told the court it had similar arrangements with 70 councils and housing associations, but the ruling is thought to have implications for social landlords across the country.
A number of councils are thought to be planning to fight water charge cases when they arise.
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It is not clear how many landlords are involved in the Barking & Dagenham challenge.
The Local Government Association, which began seeking legal advice on behalf of councils threatened with huge repayment bills after the Southwark ruling, refused to comment.
A Freedom of Information Act investigation by the BBC revealed last week that several councils in London and the South East had set aside millions for potential payouts to tenants following the Southwark ruling.
However Barking & Dagenham has not done so, despite having a similar deal. This also applies to Barnet, Camden, Greenwich, Hackney, Harrow, Islington, Sutton, Tower Hamlets, City of London and Kingston.
Barking & Dagenham, Barnet, Enfield, Greenwich, Islington, Lambeth, Sutton and Waltham Forest councils have collectively made £33m from water charges in the past six years.
On 23 January, Barking & Dagenham Council’s cabinet agreed to enter a new water collection agreement with Essex & Suffolk Water that will see it receive an “administration recoupment payment” of around £3.6m for the Housing Revenue Account.
An officer’s report said “the council will not be procuring services but will be providing services to Essex & Suffolk Water”, so is allowed to earn commission income from the deal.
Giles Peaker, partner at Anthony Gold solicitors, said: “The position that a lot of councils seem to be taking is they don’t agree with the Southwark ruling and they are going to take a case to the Court of Appeal.
“The problem is they have been saying that for a couple of years and mostly they are just settling these cases whenever they are raised. If the council did want to take on one of those cases, they would have to lose one and then appeal it.”
Stephanie Cryan, cabinet member for housing at Southwark Council, said: “We have one of the largest housing stocks in the country and the process of refunding tenants has been complex, with thousands of unique circumstances to take into account, but I am pleased with how it has been managed.”
