Newham Council Loses £200k from Waste Billing Errors

Key Points

• Newham Council failed to issue commercial waste collection bills for up to five years, losing approximately £200,000 in revenue.
• Some customers went without invoicing since 2020; others had waste collected for up to three years without payment.
• The lost income is attributed to operational errors including incorrect or missing invoices and poor data management between waste and finance systems.
• Records on different council systems were not synced, causing billing errors and outdated contract rates affecting revenue.
• A lack of system checks during a transition to new software delayed detection and revenue collection.
• Council officers have recovered about half of the sum but some debts have been written off.
• The council is taking action to reconcile records, improve billing processes, and recover unpaid debts.
• Newham faces a £53 million budget shortfall next year and is considering a 9% council tax increase.
• Terrence Paul, chair of the council’s audit and governance committee, urged full recovery of lost income for fairness to taxpayers.

What errors led to Newham Council losing up to £200,000 in waste income?

As reported by the Evening Standard (David Trayner), a series of administrative mistakes caused Newham Council to miss out on as much as £200,000 in income from its commercial waste collection service. The council admitted it failed to issue invoices to some businesses, schools, and community organisations for waste services over a period extending up to five years.

The council’s commercial waste service charges customers for rubbish collection and disposal, but a report to the audit and governance committee revealed that some customers had not received invoices since as far back as 2020. Others had waste collected without paying for up to three years.

How did system failures contribute to the billing issues?

The audit report highlighted several operational errors, including invoices not being raised or sent correctly. The council’s waste service used one customer management system, while billing was handled separately by the finance department using a different system. Staff in the waste team manually entered customer information such as bin sizes and collection frequency into their records, but these updates were not always passed to the finance team.

According to the audit document, these mismatches resulted in outdated contract rates being billed, reducing expected revenue.

Why were some services unbilled and undetected for so long?

A transition to a new system lacked adequate checks during and after implementation. This gap meant that some waste collection services went unbilled, delaying the revenue collection further.

What is the council doing to recover the lost income?

Terrence Paul, chair of Newham’s audit and governance committee, thanked the commercial waste department for initiating the audit but stressed the importance of recovering the missing funds. He said,

“For the resident out there – credit crunch, cost of living crisis, we might put the council tax up – they want to hear that you’ve got their back. Let’s just put it right. Let’s go and find some of that money.”

Council officers told the committee they had accounted for approximately £100,000 of the lost income but admitted some debts were written off. Officers also noted that some invoices had been issued for customers no longer receiving services.

The council is now actively working to reconcile data discrepancies between systems and establish clearer roles and procedures among the waste, finance, and debt recovery teams. They are pursuing unpaid debts and have warned that services will be stopped for customers who have outstanding invoices.

How does this lost income affect Newham Council’s wider financial situation?

Newham faces a daunting £53 million budget deficit next year. To help address this shortfall, the council is considering a 9% rise in council tax, which has caused concern among residents already impacted by the cost of living crisis.

Terrence Paul emphasised that ensuring the council collects all outstanding income fairly is crucial before considering tax increases. He labelled it “only fair to the council taxpayers” that missing revenue is fully pursued.

What has been the public and political reaction?

While the Evening Standard primarily quotes council officials and committee members, the incident has raised questions about administrative efficiency and accountability within Newham Council. There is pressure on the council to tighten internal controls to prevent such significant financial leakages from happening again.