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 LKP 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 move to Housing and Care 21.