Lewisham to refund residents nearly £8m for water charges

Lewisham Council is set to approve using nearly £8 million from its housing revenue account (HRA) to refund tenants who were overcharged for water.  

Long-term eligible residents are set to get back between £579 and £704 on average.  

Lewisham, like many other councils, had an agreement with Thames Water whereby the local authority billed tenants, but did not pass on discounts it had arranged with Thames Water. 

Last October the Court of Appeal dismissed an appeal from Kingston Council after it was ruled to have overcharged tenants when supplying water.   

The rejection followed a previous judgement that the council was liable for water overcharges dating back to April 2002.   

The court ruled that the council was a water reseller and not an agency, meaning it should have passed the discounts on to tenants.   

The judges cited a similar case in 2016, when Southwark Council was challenged around the legality of the charges - it was found that it was in breach of the Water Resale Orders 2001 and 2006 

In light of the rulings and the unlikelihood of success in court, many councils have made the decision to pay back tenants.   

According to a report going before Lewisham's mayor and cabinet on Wednesday (June 9): “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.  

“Following the Court of Appeal ruling in October 2020, it was decided to reassess the implications and potential liability for the London Borough of Lewisham.  

“This was calculated with the data currently available at that time as £8,673,000 million.  

“The £8,673,000 million was set-aside in a Water Charges Provision and will be used to fund the payments as outlined in this report.  

“Work continues to assess the full liability to the council as a result of the legal judgement and if the total value exceeds the current set-aside provision, a further charge to the HRA will be required.  

“It should be noted that where a tenant 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.  

“Any remaining balance which results in a credit on the tenants account would then be available to be paid over to the tenant upon request.” 

Residents eligible for refunds include those living in properties managed by Lewisham Homes or RB3, where the tenancy started between April 1, 2001, and March 21, 2017.  

Leaseholders and former leaseholders, council tenants transferred to L&Q, Hyde, Clarion and Phoenix, and former residents of properties managed by Lewisham Council between the relevant dates are also eligible.