Agenda item

Report ES17080

The Committee had been asked to look at utility debt and BT debt in particular following concern expressed by the Executive and Resources PDS Committee.

The New Roads and Streetworks Act (NRSWA) and Traffic Management Act (TMA) gave the Council authority to manage activities of utility companies in the borough and to minimise congestion through the London Permit Scheme (LoPS) scheme. Additional repair costs for any defective reinstatement work by the companies are borne by the Council as Highway Authority. The Council charged utility companies for:

·  permits;

·  sample inspections (during works, following completion, and at the end of a two year guarantee period);

·  defects/ defective reinstatements (the Council charging utility companies for up to three additional inspections - a joint site inspection  to agree the defect, works in progress, and works completion);

·  other Fees (e.g. Fixed Penalty Notices for contravening permit conditions, charges for works exceeding the agreed programme and materials or traffic signs/barriers left on site).

In recent years most utility companies paid monies owed within the 30 day due period. However, BT Openreach had outstanding debt related to defective reinstatements and officers and BT Openreach had been working to resolve the issue. 

For individual invoices in dispute, payments are delayed until outstanding disputes can be resolved. Officers met BT Openreach in March 2017 and reasons identified for the delayed payments were summarised as:

·  non-attendance of BT Openreach at joint site meetings, resulting in ‘repeat defects’ issued by LBB – 1147 charges;

·  dates on paperwork and EToN (electronic transfer of notices) not aligning – 1652 charges;

·  non-attributable works not being agreed – 1118 charges; and

·  duplicate charges issued in error – 193 charges.

Draft invoicing introduced with utility companies in 2014 allows utilities to dispute any charges before a final invoice is raised thereby avoiding unnecessary invoice cancellation and payment delays. This resulted in significant improvement with most utility companies and agreed defect charges have been paid in a timely manner. BT had engaged with the process since April 2017 and charges related to the current financial year had to date been agreed and paid.

Although initially slow on progress with historic debt BT Openreach had made significant improvements since September 2017 when 46% of outstanding disputes had been agreed and BT would be making part payment to reflect this. BT Openreach and officers would also work through remaining historic charges within the next three months and a full breakdown of these was shown in Report ES17080 along with progress made to date.

Other utility debt (defects, inspections, permits and other fees) was also highlighted in the report as was the following table summarising total debt outstanding for all utility companies:

The majority of outstanding debt for 2017/18 related to invoices raised during the previous two months. Two of the utility companies had recently notified they had settled invoices totalling £150k, reducing the total debt owed by non-BT companies to £164k. BT Openreach had also recently agreed to settle amounts totalling £70,662, leaving an outstanding balance of £144,439 which it was hoped to resolve by the end of December 2017. An enquiry was made on whether some of this outstanding amount might need to be written off and Members were advised that the sum would first need to be agreed with the company. There was also a bad debt provision built into the accounts.

RESOLVED that the progress of debt recovery be noted.