November 27, 2020

£750,000 lost in SmartSource Water scandal

InsideHousing2Following up the Campaign against retirement leasehold exploitation story of Hanover losing £500,000 over the SmartSource Water scandal, it now emerges that Housing 21 lost £250,000.

Inside Housing, the newspaper for social housing providers, says SmartSource Water was like a “pyramid scheme” which has left several housing associations among creditors facing millions of pounds of combined losses.

Two further housing associations and some care homes also had deals with the bill-management company, which offered to negotiate with water companies and pay on their customers’ behalf.

Smartsource Water guaranteed 8.3% reductions in water bills and no price rises for four years. However, a winding-up order was issued to the company at the end of September last year after it failed to pay its clients’ water bills.

In a letter to residents last month, Hanover chief executive Dame Clare Tickell revealed that the social landlord had lost £500,000 as an unsecured creditor.

As far back as March, Dame Clare was warning that media might take up the issue, which Campaign against retirement leasehold exploitation did in the course of discussing issues at Leonard Hackett House, in Bournemouth. More here

Housing and Care 21 confirmed that it was also left exposed by as much as £250,000.

“We only used [Smartsource Water] for nine months and then stopped paying as we became aware that there was a problem,” says Housing & Care 21.

Administrators for Smartsource Water estimate that the company owes around £5 million to its former customers.

Both Bruce Moore, the former CEO of Hanover, and Tony Tench, former head of Hanover retirement, have denied that they took the decision to sign up with SmartSource Water.

But Moore has said that as he was “CE at the time and hence accept ultimate responsibility for a poor decision”.

Both Moore and Tench have moved to Housing and Care 21.

Comments

  1. I can’t believe that in this day and age a company can have that much client money and it not be protected in an escrow account….
    Why aren’t these directors held accountable for their disastrous management practices or their banks for allowing them to overspend.

  2. Michael Epstein says

    Karen,
    Sadly i fear this is “Water under the bridge”

    • You could see this scam coming a mile off. I remember seing the marketting speil when i first came out and thinking this is not going to work. I am not aware that Water Companies (all, except Wales, now owned by foreign companies) offer any “discount” for bulk domestic supplies or for composite billing.

      I beleive that the client’s money will not be lost as the orgnaisations will pick up the losses, but that is money which could have been invested in social houisng or home improvements.

      The old adage “if it is too good to be true” comes into mind. It goes to prove that many housing associations have no commercial acumen. Will anyone be sacked over this debacle? I doubt it.

      • A later edition of “inside Housing” states that “Former Housing Chief receives £174k payout” in respect of a bodged Private Finance Initiative deal which lost £32m.

        The Association invovled. None other than Housing and Care 21! The very same Chief was in post when the Smartwater scam was agreed.

        So there is reward for failiure, but we knew that all along!

    • It certainly is Michael…and all as clear as mud…..

  3. Michael Epstein says

    Whilst many housing associations have no commercial acumen, they still have a duty to be prudent.
    That Housing 21 appointed Cirrus leads me to believe they are not demonstrating a reasonable attitude to prudence. Since funds paid to Smart source Water were not paid over to the water untility company, naturally that company wanted their money.
    In like manner, if a third party was to be used to pay service charges to Peverel and for any reason those funds were not paid over to Peverel, the leaseholder would still be liable for their service charges.

    • Michael,
      The Housing 21 that appointed Cirrus, a known Cheat and Price Fixer and a Peverel/CarelineUK parent Peverel Services Ltd, who is a Parent Company of Peverel Management Services Ltd who trade as Peverel Retirement, and you use the wording, reasonable attitude to prudence, wash out your mouth.

      Peverel Retirement Division have stigmatised Glyn Jackson for being a cheat and a company that was found guilty of Price Fixing?

      Peverel Retirement failed to explain that the reason that Glyn Jackson was found guilty and fined £35,7000 was because Peverel/Cirrus coerced them into RIGGING TENDERS so that Peverel Group could benefit from the exploits (£1.4 million) against the elderly and infirmed residents.

      The very residents that Janet Entwistle has failed since she arrived with her Charter?

  4. This shows how gullible the Managing Agents are and how they can use the residents money to make money and keep it?

    The Managing Agents are aware that only certain developments check the Invoice Files which are presented as: MATTER OF FACT CORRECT?

    The lack of communications from Area Managers and Regional Managers has since 1999/2000 been anything but transparent and open, as JE now claims?

    I have this year, looked at all our Expense’s Files, dating back from 2006.
    In the Expense’s Files, I found invoices for items that were for the following:-

    1. other developments,
    2. bills left by sacked House Manager
    3. insurance claims not made and charged to the Service Charge

    The following were charged under the items 1,2,3

    1. Relief Managers Pay £143.44
    2. Phone Bills £1,260 plus £200 (not refunded)
    2. Cost of Plants/Pots/Planters £2,500 (refunded)
    3. Replacement WC £327.37
    3. Replacement Carpets £375
    2. Loss of signal for TV £117.60
    2. Call out for TV repairs £93.60
    2 Loss of TV signal £125.76
    3. Fit 6 hanging baskets £79.30
    1. Asbestos Survey £125.00
    1. Light Bulbs for a club house we do not have £66.00

    We also paid for:
    Risk Assessment’s for small trees
    Roof Surveys from ground level
    Fire Risk Assessments

    Don’t forget the Commissions paid for Insurance Cover for both Kingsborough and Oval who both receive commission on the Building Premium and then Oval receive commission on the Terrorism Cover???

    We have noted the ways the Managing Agents make money from Insurance:-

    A. Over Insure which means more Commissions?
    B. Suppress Claim, refuse to claim, informing that they have and being refused?
    C. Increase Excess, and then place claim in Storm and Water Damage for a leak?

    We understand that as the period, 6 months from April 1st each year i.e. October this is the busy period as our Area manager has up to 33 developments to arrange Budget Meetings and decide how little information we residents should be given?

    Reply