Southwark’s Labour housing bosses have been forced into a humiliating climbdown and will now spend £8.4million refunding council tenants for historic water rates it should not have charged for.
A recent decision by the High Court of Justice ruled that the Council had overcharged tenants for water bills between April 2010 and July 2013 and had breached laws on how it bought and re-sold water and sewage services provided by Thames Water. The court found that the Council had made a profit from tenants paying for these services through their rent.
The Council initially refused to accept the court’s decision and was considering an appeal. It has now backed down and will refund up to 37,000 tenants and former tenants up to £240. The total cost to the council housing budget will be over £8million.
Following the court’s decision, Liberal Democrat councillors called on the Leader of the Council to explain the borough’s actions. The Labour leader also confirmed in his answer that the court case had cost Southwark residents over £70,000.
Southwark Liberal Democrat Housing Spokesperson, Councillor Ben Johnson, said:
“This is a very welcome u-turn by the Council. Just a month ago they told us that they were considering an appeal against the court’s decision. But they have now seen sense and agreed to give council tenants their money back.
“But the Council still has questions to answer. Why did they continue with this arrangement with Thames Water for so long? How will they find the money to pay back all tenants? And how will this affect the already stretched housing budget?
“The Council had to be dragged kicking and screaming through the courts to give Southwark tenants what is rightfully theirs. In these times of cuts and austerity, the Council needs to be offering the best possible value for money – not ripping residents off.
“Southwark Liberal Democrats will continue to fight tenants’ corner and ensure that all tenants and former tenants get their money back as quickly as possible.”