A watchdog has ordered the council to apologise and reimburse 60 older residents who were overcharged a total of £38,000 on their water bills.

The Local Government Ombudsman investigated after residents living in sheltered housing in Meadowbank Close, Fulham, complained they had been paying almost double for their water since 2008.

Ombudsman Dr Jane Martin ruled that Hammersmith and Fulham Council was guilty of maladministration causing injustice.

Councillor Andrew Johnson, cabinet member for housing, has ‘sincerely apologised’ to residents and launched a review into the incident, which occurred while under the management of the now defunct H&F Homes.

The ombudsman’s report revealed one complainant was charged £332.80 in April 2010, almost double Thames Water’s £175 annual assessed household charge.

She said the council refused to install meters so tenants had to pay an expensive flat rate rather than for their individual usage.

Dr Martin said: “The council has significantly overcharged residents for water use. The council has also taken too long to identify the problem and clearly explain to (the complainant) how it has charged her for water use.

“The council should have been aware of and complied with the Water Resale Order. This is fault.”

Hammersmith MP Andy Slaughter said: “Hammersmith and Fulham Council has been systematically ripping off elderly tenants for years – and continued to do so after they complained until the ombudsman intervened. Any other council would have its trading standards officers investigating this type of scheme.”

Mr Johnson said: “I can only sincerely apologise to the residents who were overcharged for water and I want to reiterate that the council is absolutely committed to sorting this out so that everyone pays for the water they use.

“It is clear that the system for apportioning water bills for these homes, which we inherited from the now defunct ALMO (arms-length management organisation), was not fit for purpose.

“Historically, overall we have been charging tenants less for water than the council is charged by Thames Water, with some people paying too much and some people paying too little.

“I have instructed the housing department to undertake a thorough review of what went wrong to make sure that this never happens again and ensure that everyone receives an accurate bill.”

Mr Johnson said some tenants’ bills may go up next year following the review.