Power struggle - by Mira Bar-Hillel

An Islington leaseholder has raised an issue with his own authority, which has now been referred to London Councils (formerly the Association of London Government), as it is likely to involve all London councils in a major legal battle with the French company.
The row centres on who is legally liable to pay for the replacement of electrical cabling – and meters – within houses and blocks of flats owned by local councils. Multi-billion pound schemes for bringing council homes up to decent standards include major works to mains laterals, risers, distribution boards and meters that are now owned by EDF.

In the case of Owen Hart, the cost of electrical upgrading his small block, which contains only 22 flats, has been priced at £40,000, which is almost £2,000 per flat. He is quite rightly concerned that the council will simply pay EDF to do the work and then charge the leaseholders for it.

Mr Hart therefore contacted Energywatch, the consumer arm of OFGEM. They said the legal position was that “the distributor is responsible for everything up to the meter”.

On 13 November 2006, Seán O'Brien, HfI’s Major Works Officer, told Mr Hart: “We are pursuing EDF with the view that they should be paying for this work. The electrical supplier EDF has been formally approached in writing by our electrical specialist consultants Bailey Associates on this issue.

“They have listed the blocks where renewal of the lateral/riser is required on this contract and have asked them directly if they are willing to pay for the cost of these installations. We await their response and will keep you informed of the outcome.

“There is a considerable financial implication for EDF to set a precedent or change of policy on this matter. It is unlikely that EDF will willingly agree funding. This will then need to be challenged by HfI and we will endeavour to do so. However it is likely to be a protracted legal dialogue and could therefore take a long time to resolve. Ideally the challenge should be done in conjunction and consultation with other boroughs.”

A legal opinion was obtained by Westminster Council on the same subject in 2002. The opinion, from Alan Alesbury, of 2-3 Gray’s Inn Square, stated: “the electricity supplier must bear the cost of maintenance and renewal; it is only chargeable to customers collectively as an element within the general charge for electricity supply to all customers.” In plain English, this means that EDF may add the cost of infrastructure works to its general electricity bills, but may not charge the cost direct to the property owners. An EDF spokeswoman said: "EDF is not responsible for providing electrical cables or apparatus, in these circumstances, without payment.”

Mr Hart is not convinced that Homes for Islington (HfI) the body that manages housing in the borough, is taking the matter seriously enough and is worried that leaseholders will be left with hefty bills if EDF resists.

He was also unable to get clear answers from HfI or the council itself on the issue.
But a press call to Islington Council produced a different response. Cllr Terry Stacy, Islington’s Executive Member for Housing and Communities replied quickly. He said: “I’m appalled that EDF – a private company making huge profits – is resisting paying these charges for updating their own infrastructure. We’re fully supporting our leaseholders and our social housing partners HfI, in fighting this case.

“We intend to take these serious concerns to London Councils and ask them to represent all 33 London authorities on this issue”.

London Councils has also confirmed that it has received a formal approach and will be looking into the matter. The Leasehold Advisory Service has also been alerted and will be investigating the issue.