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A London borough will dip into its Housing Revenue Account (HRA) to refund its tenants following a ruling which found that several councils had overcharged residents on water bills.
A report by Lewisham Council said that tenants could recoup between £579 and £704 each for historical water bill overcharging.
It follows a Court of Appeal decision last year which ruled that councils had been overcharging tenants for water after failing to pass on discounts it had arranged with Thames Water. Although it was Kingston Council that launched the appeal, the ruling has implications for other social landlords.
The report, which was approved yesterday, said: “This report asks mayor and cabinet to approve proposals to make payments to current and former tenants as set out in sections 5, 6 and 7 of this report, to a current estimated total of £7,881,837. This will be funded via the HRA.”
The council said it continues to assess the full liability as a result of the legal judgement and if the total value exceeds the current provision, more will be released from the HRA.
“It is proposed that where a resident owes the council money either in current arrears or former arrears, any refund due will be used in the first instance to cover this debt,” the report said.
It comes after Kingston Council appealed a High Court 2019 ruling which said that discounts the local authority received from Thames Water had not been passed on to tenants and that the council was therefore in breach of the Water Resale Orders 2001 and 2006.
But the Court of Appeal dismissed the appeal in October 2020, ruling that there was “no real doubt” that Thames Water supplied the water to the council rather than directly to tenants, and discounts should therefore have been passed on.
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