I am a 77-year-old pensioner who has been a tenant of Lambeth council in London since my estate was built in 1977. We brought up our family here, and my husband died here, but I feel I am being priced out of my home by a 350% increase in the communal heating and hot water charges the council is applying. Coupled with the rise in rent and service charges, it means I’m having to pay an extra £76 a week. The heating and hot water charges have to be paid all year, and there is no way to economise because we pay the same, however much or little we use.
LF, London
In March, you and countless other council tenants across the London borough of Lambeth were given four weeks notice of a 58% increase in weekly rent and service charges. This included an eye-watering rise in the costs of your heating and hot water, provided from a central generator by a district heat network. Your weekly heating bill soared from £13.69 to £61.99 and the hot water from £4.76 to £21.56. On top of that, you have to pay separately for electricity and cooking gas. The letter, from the Labour-run council, helpfully told residents unable to afford the rises they could avoid them by ending their tenancy.
There is not a thing you can do to mitigate these costs. The communal bills are divided among residents according to how many hot water taps and radiators are in each property, regardless of how many people live there, or how much they use. If you cut your consumption to zero, you would still have to pay. It is thought that price rises of up to 1,000% are affecting nearly half a million communal heating network customers across the country, including some of the lowest-income households.
The reason is that many heat network operators buy energy a year in advance, so the price rises that hit most households last winter only began filtering through to network users in April, days after the £400 government fuel grant ended.
The government’s energy price cap does not apply to homes on heating networks. Suppliers are allowed to apply for government help to pass on to customers, but customers have no way of knowing if this has been done, as bills are not itemised. In 2018 the Competition and Markets Authority (CMA) found that some heat networks offered poor value for money, with opaque bills that varied significantly between networks. Unlike the rest of the energy sector, communal networks are unregulated and customers are not able to switch supplier for a better deal.
Lambeth council says that in 2019 it joined other councils in appointing an agent to procure discounted energy and supply contracts a year in advance. The idea was that it would protect against market volatility and “smooth out” prices. Which it did for 12 months, only to throw residents over a cliff when the contract ended.
The council says: “Communal heating and hot water charges have, historically, been significantly lower than the bills most households in the country receive. However, Russia’s invasion of Ukraine and market conditions have driven global gas and electricity prices to a high, which has meant our communal heating recipients are experiencing larger increases than most properties with private providers.”
The council says it has an £18m fund to help tenants in hardship and that it plans to install, at some unspecified point in the future, individual boilers and meters in 1,300 properties as an experiment to improve energy and cost savings.
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