BELLE MONT reports on the latest costly embarrassment for the LibDem council, caught withholding service discounts from social tenants
Sutton could be liable to pay out millions of pounds in compensation to its council tenants after more than a decade of overcharging them for their water supplies.
In a press release smuggled out just before the end of 2020, the Liberal Democrat-run council finally admitted that they would abide by a Court of Appeal ruling which found that neighbouring borough Kingston was wrong to pocket the discounts received from water suppliers. Sutton Council had spent thousands of pounds of Council Tax-payers’ money to co-fund the legal defence of Kingston (another LibDem-controlled council) in the long-running case.
The original High Court ruling was handed down in November 2019, but Kingston and Sutton opted to spend thousands more in taking the case to the Appeal Court. Their appeal was evening thrown out in October last year. Southwark Council had lost a similar case in 2016.
Sutton Council has been described as “ridiculous” over its money-grabbing over-charging of its tenants for water and sewage services, and are accused of “bullying” some of the borough’s poorest and most vulnerable residents while acting as “an unscrupulous landlord”.
The Appeal Court judges included the Master of the Rolls, Sir Thomas Etherton. In a unanimous verdict (which is available as a pdf here), they rejected the appeal brought by Kingston, and so established that thousands of social housing tenants had been overcharged for their water supply, dating as far back as 2002, because the local authority had failed to pass on a discount it received from the water service suppliers.
In Sutton’s case, LibDem council has received discounts on water services from East Surrey and Southern Water for at least 13 years – and in 2009, Sutton negotiated the discount up from 5 per cent of charges to 9 per cent. One opposition councillor in Sutton has accused the council of regarding the water discount as their “kickback”.
The press releases issued by Sutton Council and Sutton Housing Partnership late on Thursday falsely claimed that, “The Court of Appeal case didn’t relate to Sutton”. In fact, records show that Sutton’s council leadership forked out at least £11,000 towards Kingston’s legal costs.
“The council, along with many others across the country, has decided to pay the refund in light of this decision,” the council press release smarmed disingenuously, some 14 months after Kingston had lost their original case.
Sutton council tenants were paying their water bills as part of their service charge to Sutton Housing Partnership until April 2018. Residents have paid their water bills directly to Thames Water since.
Accounts from the council and Sutton Housing Partnership show money set aside in 2018 to compensate residents, but not a penny has been paid back to residents until now.
And to compound the financial impact of the scam, because the council was acting as an intermediary, it meant that for years, Sutton’s 5,400 social tenants were unable to reduce their bills further by applying for eco-friendly water meters.
The refunds could cost Sutton Council at least £2million.
According to the council press release, “The amount refunded will depend on how long someone has been a council tenant. It will only apply to people who were tenants before April 2018 and the refund will be based on the amount the council was paid by the water companies for collecting the charges on their behalf.”
The council says that tenants will not need to apply for the refund, and that they will contact those eligible before the end of this month. It could mean some council tenants getting a couple of months rent-free.
Those who were council tenants before 2018, but have since moved on, will also be able to apply for their refunds, with Sutton Council promising to publish details before the end of January.
One source at Sutton Council told Inside Croydon, “This is nothing short of ridiculous.
“The council has known since the Southwark council case nearly five years ago that what they had been doing was unlawful, and about as dodgy as a Del Boy deal down the market.
“But they have fought against it all the way. Yet they are still not saying what they think their liability will be.”
At the beginning of 2020, council officials threatened Tim Crowley, the then leader of Sutton Council’s Tory opposition, that if they were forced to pay back this money “it would be the tenants that would suffer”.
Crowley is particularly critical of the deputy leader of the council and chair of the Sutton housing committee, Jayne McCoy. He told Inside Croydon, “It looks as though under Councillor McCoy’s stewardship that the London Borough of Sutton, via Sutton Housing Partnership, have become an unscrupulous landlord.
“Under the Liberal Democrats, Sutton Council have again been shown to be bullies of the worst kind, preying on those in society who have the most need and least money.”
Nick Mattey, the independent councillor for Beddington North and anti-incinerator campaigner, said, “I hope the council will now understand that exploiting residents in order to make extra money for the council invariably ends badly, be it through cold water from water companies or vastly over-priced hot water from incinerator operators Viridor.”
According to Mattey, “Council officers negotiated a greatly increased kickback from East Surrey and Southern Water in 2009 by telling the water company how social housing tenants in Sutton were among the most deprived in England. Naturally, the water board thought that Sutton Council would pass this discount on to tenants to help them. How wrong they were. Sutton pocketed the cash and water and sewage bills stayed high.
“The council needs to focus on protecting residents, not trying to take them to the cleaners.”
And Catherine Gray, Sutton Tories’ spokesperson for housing, said, “The council have known they will need to do this for years – it is shameful that they’ve left it this long to refund residents what they are owed.
“We will be closely scrutinising the implementation of these refunds – the council must not use this is an opportunity to limit the cost of their failure by not notifying those who may not know about their entitlement.”
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