Widespread criticism as Business Stream hounds charities for backdated payments
Scottish charities are being hounded for thousands of pounds of backdated water charges – and many fear they will have to curtail vital services in order to pay.
A number of groups have approached TFN saying they have received settlement bills from Business Stream – Scottish Water’s arms-length commercial operation.
The bills cover years when the charities thought they were exempt from paying for water, when actually Business Stream had failed to bill them.
While some of the backdated debt has been written off, charities are still facing substantial bills.
One care charity which offers vital support to vulnerable women was offered a £8,000 settlement on a £12,000 bill – but said the amount is still unpayable and will affect its services.
The problem of backdated payments arose because of confusion about which charities were exempt from paying water rates.
The previous complicated system of exemptions for some organisations was last year replaced with the new Water Charges Exemption Scheme.
This means registered charities which have an income of less than £200,000 will no longer need to pay water and sewerage charges from 1 April, while those with incomes between £200,000 and £300,000 will pay a reduced rate.
In 2013, Business Stream put backdated charges on hold promising to establish a new policy for retrospective charging.
Many charities hoped this would lead to the debt being written off.
However the company is now beginning to bill charities despite no policy for backdating being in place.
It is unfair and unrealistic to expect charities to pay bills entirely disproportionate to their income - Ruchir Shah
Ruchir Shah, policy manager at the Scottish Council for Voluntary Organisations, said charities are being penalised as a consequence of poor practice on Business Stream’s part.
He said: “It is unfair and unrealistic to expect charities to pay bills entirely disproportionate to their income, for periods when they were unaware of any requirement to pay.
“We welcomed the hold that was placed on these accounts while the backdating policy was being examined, so we are disappointed that a year and a half later the review has still not been concluded and new demands will be issued to these charities.”
It means many charities are having to carry over historic debt into next year’s financial accounts.
Shah added: “These organisations are providing frontline services in our communities and should not be diverting vital funds from their work because of the unjust and incomprehensible water charging system of the time.
Business Stream failed to address why no coherent policy for backdating was in place.
Charlene Wallace, director of customer operations at Business Stream, said: “We do our utmost to work with the third sector and make sure all charities are aware of the exemption process and its eligibility criteria.”
“As part of that, we’ve written to thousands of organisations over the past year about these changes and provided detailed information on our website.
“We would urge any charities moving into new premises to notify a licensed provider so they can be billed from the time they moved in – whether they believe they are eligible for exemption or not.”
