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A London council is facing an unpaid electricity bill of more than half a million pounds after it forgot to charge customers for seven years.
Lambeth failed to seek payment from tenants through their rents for thousands of unmetered street lights on its council estates since 2003, leaving it with an estimated bill of £658,000.
It is now trying to renegotiate the amount it has to pay EDF Energy — the company supplying the power — which is thought to be willing to write off as much as four years of unpaid bills in an effort to recoup some of the money.
The blunder means the council now has to raise funds for a one-off payment of about £280,000, which must be paid by the end of this financial year.
Liberal Democrat councillor Jeremy Clyne raised concerns about the bills a year ago when he tried to get broken lights replaced and was told the council had no record of their existence.
He said: “It's extraordinary. If you or I had not paid our bill we would not be let off. Yet the council can fail to pay hundreds of thousands of pounds and just walk away.
“The authority has failed to resolve this matter and allowed it to fester for years, effectively putting people at risk. Some of these estates are not particularly safe late at night. This shows utter incompetence on their part.”
It had been feared that home owners could face a “£1 million exposure” for the error. However, a council spokesman said: “Ever since the situation of unmetered supplies to some estates was identified, we and EDF have been working closely together to resolve the problem. Tenants will not face higher rents or service charges due to this.”
An EDF spokeswoman said: “The council has made considerable strides forward to resolve the situation but we do not have a final agreement yet.”
The council, which has continued to take electricity for the lights, at an estimated cost of £94,000 a year, now has to decide whether to stop the practice and plunge estates into darkness.
Council documents show that the blunder relates to an estimated 2,240 unmetered street lights, with the cost of energy per column believed to be about £42 a year.
The authority said: “EDF are entitled to payment for the energy consumed for the last seven years. However, they have confirmed they only intend to seek reimbursement for energy consumed since April 1, 2008.”
It is now carrying out an audit to work out precisely how many lights are affected and establish how much money is outstanding.
In a separate case, the council has failed to pay supplier Southern Electric for a £7,000 bill. As a result, power to floodlights on new £250,000 tennis courts has been cut, preventing players using them after dark.
Reader views (15)
I'm not shocked at this because for eight years Lambeth have left us to live with noisy neighbours. I've lost £30,000 because they chose not to deal with the problem and thought nothing of it.
They sent me a 'Final notice'letter which mentioned court action demanding the payment for over £740, and this was without sending me a reminder first. And this was all because of one missed payment which was paid for long before they sent the letter.
The fact they owe £658,000, they should pay it or face court action the same way the deal with us the clients.
Just like someone said, I also think the 'Red carpet' treatment is due.
- Ms M. Taylor, London, 04/09/2010 13:13
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Street lights: in the public highway; paid for from taxation.
Housing estate lights: inside blocks; paid for from rents.
Housing estate lights: not inside blocks, but maybe in car parks or private roads, often look the same as street lights; paid for from rents.
Which are you writing about, Benedict Moore-Bridger?
- Alan Griffiths, Forest Gate, LONDON, 03/09/2010 22:56
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Both Lamberth and EDF are to blame here and both seem to have some crap accountants - Thats before we even bring into the fact the external auditors must have WE HOPE highlighted this problem within BOTH Lamberth and EDF. Is this figure sitting anywhere in either Lambert or EDF's balance sheets????
What normal business would let such a bill accumulate to such high levels without taking action? Why did management at EDF not pursue harsher methods to obtain payment sooner?
As for Lamberth, what accounts section / manager was responsible for ensuring all utility bills were paid?
I know for a FACT accountants are very nicely paid within the Public Sector so heads should be rolling somewhere.
I mean, what else have they forgot to pay and rebill?
The mind boggles!!!!
- Tessa, London, 03/09/2010 21:23
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The good people of Lambeth keep on returning this bunch of incompetent communists to power, no doubt they enjoy having sky-high council tax and poor services.
I remember being chased by Lambeth for ages over some unpaid parking fines - I don't even have a car; someone had given them my address. Trying to get them to sort this out was a frustrating effort in bureaucratic nonsense which no doubt cost them more in debt collectors' fees and their own wasted time than the ticket was worth.
- Tim, London, 03/09/2010 16:32
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The British Public Sector in all its magnificence.
Bring on those cuts.
- Anglo, Sussex England, 03/09/2010 16:27
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Well clearly Lambeth as one of the worst councils in the country have a lot to answer for.
I trust that some heads will roll due to this incompetence.
Maybe they can reduce some of the non jobs and politically correct ideas to pay this bill.
Sadly Lambeth Council are so incompetent that if there was an award cermony for incompetence they would win but trip on the badly laid red carpet they laid on the way to collect the award
- PATRICK'S OPINION LAMBETH, LONDON, 03/09/2010 15:58
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I just do not understand this.
I thought that street lighting was paid for through Council Tax? What next. Council "forgets" to charge tenants for refuse collection/police/fire-service etc. etc. Perhaps the Council Officers will expect tenants to pay for their much needed brain transplants!
- fuzzylogic, Billericay, 03/09/2010 15:57
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Did EDF supply a bill to the council? I presume that council tax bills will just have to increase in Lambeth on those estates in darkness to pay for this. Whats the problem with that are EDF or those living on those estates complaining! what estates are affected exactly and why not just put in "smart" meters now.
- Sylvester, Cornhill, London, 03/09/2010 15:26
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Council tenants do not pay service charges as such, it is only those living in Right to Buy flats that have bought the leasehold that have to pay. The amount owed per flat would be very low anyway.
- Jack Spratt, Richmond, Surrey, 03/09/2010 14:30
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How many streets have EDF dug up in Lambeth over the years and inconvenienced road users and residents, i think the overdue electric bill should be cancelled then Lambeth might be able to use the money to install a few solar powered lights in the future.
- Mr S.Port, London, 03/09/2010 13:40
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A French company is going to lose out and council tenants got free electricity. What's the problem? Its EDF's fault for not billing on time.
- Peter, Battersea, 03/09/2010 12:57
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I dream of the day when Lambeth Council is simply abolished and we are able to get our services from either private contractors controlled by the residents, or the council is taken over by Wandsworth.
Bring it on!
- SarahN, London, UK, 03/09/2010 12:45
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Not a massive surprise. Lambeth local authority's credit rating is so poor that only one mobile phone provider will allow them to have a corporate contract. The rest wouldn't touch them with a barge pole.
- Gary, London, 03/09/2010 12:35
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It's easy to blame the council for this, and they are of course partly at fault, but I can't help also wonder why EDF let the situation go unchecked for a full seven years.
Should a company not be required to bill it's customers in a timely and appropriate manner too?
I think that's why EDF is willing to write so much off, as it knows it takes a large portion of the culpability in this ridiculous mess.
I also agree with Mike, I'd rather lose an overpaid exec or two from an overstaffed office than have our street lights go out on us.
- John, London, 03/09/2010 11:35
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Just get rid of a few overpaid Executive posts and that should be enought to cover the cost. Start with the department head who as responsible for this.
- mike stern, NW10, 03/09/2010 11:08
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