Councils reselling water

Up to four MILLION tenants set for huge water bill refunds after landmark case.

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Millions of hard-up council ­tenants may have been soaked by their landlords over water bills , the Sunday Mirror can reveal.

Up to four million could be in line for huge refunds after it emerged that at least one local authority added water and sewerage charges to rent in an illegal way.

The council was paid commission by a water company to act as its agent – but failed to pass this on to 40,0000 tenants to offset their bills.

The system – seen as effectively “reselling” water – was deemed unlawful in a landmark court case and the council now faces paying out £28million in refunds.

Now tenants in nearly two dozen other areas want to know if their own town halls and housing associations have been pulling the same trick.

In a scandal that mirrors PPI mis-selling, we have seen documents claiming the unlawful agreements are “common across the country”.

A team of lawyers is currently sifting through more than 30,000 claims from customers stretching across 22 districts including Birmingham, Liverpool and Yorkshire.

The Local Government Association says it is “supporting a number of local authorities” to make sure they are not overcharging tenants.

And some of the UK’s biggest water companies, while not being accused of wrongdoing, have confirmed they are reviewing the “impact on their businesses”.

Ben Hawkins, of the group action WaterClaimsUK, said local authorities and housing associations were trying to ignore or play down the issue.

He said: “We have unearthed a nationwide practice of large social housing landlords, which includes councils and housing associations, who could be acting unlawfully.

“We suspect councils are trying to brush the issue under the carpet and hope it goes away.

“Thousands of people are looking at joining potential group action against social landlords who potentially unlawfully overcharged them. It could be massive.”

Legal experts say some of the most vulnerable tenants have been hit with bloated bills in a nationwide problem.

Some may even have been evicted from their homes after the overcharging forced them into arrears.

Solicitors are now preparing a US-style class action against councils amid fears as many as four million Brits could be affected.

And up to 1,000 councils and social housing companies could be forced to repay huge amounts for deceiving tenants.

It follows a landmark legal ruling that Southwark Council, the authority which runs a borough in South London, had illegally overcharged tenants for water.

In a case where tenants were headed up by self-employed painter and decorator Kim Jones, the High Court was told the council had collected water bills from tenants on behalf of Thames Water.

But it still overcharged tenants by the amount of commission it had received – plus an allowance given for empty homes – which added up to 22.1 per cent of the total charge.

The judge said the council had contravened the 2006 Water Resale Order and had effectively “bought and resold water and sewage services”.

The council claimed the extra money was put back into its services.

Stephanie Cryan, Southwark Council’s deputy leader and cabinet member for housing, has claimed Thames Water had around 70 similar contracts in London and such agreements were “common” elsewhere.

Already a legal team representing council tenants say they are investigating more than 30,000 cases where they may have fallen victim.

Officials at councils in Wandsworth, South London and Surrey-based Waverley, which also billed tenants on behalf of Thames Water, admit they operate the same system.

Waverley Borough Council said it was offering “a percentage of the commission we received for water charge collection between 1 April 2011 and 31 March 2017”.

An LGA spokesman said: “We are supporting a number of local authorities to ensure their arrangements are compliant with the court’s decision.”

Watchdogs at Ofwat said: “We are aware that water resale can be an issue and have been contacted by people unhappy with the way their water charges have been calculated.”

Andy White, Senior Policy Manager at the Consumer Council for Water, said: “We have worked to ensure that tenants living in properties where councils or housing associations have a collection arrangement do not pay a penny more than they would if they were paying the bill direct.”