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Government to investigate fraud allegations at Tower Hamlets council

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Government to investigate fraud allegations at Tower Hamlets council

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Published by Max Salsbury for 24dash.com in Local Government and also in Central Government, Legal

Helping hand for Tower Hamlets young carers Helping hand for Tower Hamlets young carers

The Secretary of State for Communities and Local Government has today appointed inspectors to look into allegations of fraud, governance failure and poor financial management at the London Borough of Tower Hamlets.

Following "serious concerns raised after the receipt of certain documents", Eric Pickles, acting in the public interest, has exercised his legal power to appoint PricewaterhouseCoopers LLP to carry out an inspection of the council.

A file is also being passed onto the Metropolitan Police for consideration.

The inspection will look into evidence of the authority’s payment of grants, the transfer of property, spending decisions in relation to publicity, and other contractual processes from 25 October 2010 to the present day.

Pickles said: "It is a matter of public record that I have long been concerned about a worrying pattern of divisive community politics and alleged mismanagement of public money by the mayoral administration in Tower Hamlets.

"Following the receipt of a number of documents, I am now taking legal steps, in the public interest, to appoint inspectors to look into the allegations in respect of Tower Hamlets.

"I hope this sends a strong signal that robust processes are in place to investigate allegations of failures in financial management and governance in local government, under the new regime introduced by the Local Audit and Accountability Act which replaces the Audit Commission.

"This central action is not undertaken lightly, but localism requires local transparency, scrutiny and accountability, and these vital checks and balances must be upheld."

In a statement, a council spokesman said: “Under an order introduced yesterday, government auditors are today meeting with senior officers of the council.

"We welcome the opportunity to demonstrate that council processes have been run appropriately and to date we have seen no evidence to suggest otherwise.

"This inspection affords the borough the best opportunity to demonstrate that the borough has acted in the best interests of all residents. We will release further information in due course.”

The council has been duly informed and PricewaterhouseCoopers is already on site.

The inspectors have a legal right to access all premises and documents belonging to the authority which appear necessary for the purposes of the investigation.

Leader of the Tower Hamlets Labour Group, cllr Sirajul Islam, said: “Today is a sad day for Tower Hamlets. Whilst there are obviously serious questions to answer no council wants to be the subject of scandal. Lutfur Rahman needs to reflect very carefully on the position he has put the council in.

“We have been warning about Rahman’s style of leadership for a long time. It is clear, whatever else is happening, the only way to resolve this situation and restore our borough’s reputation is to vote John Biggs in May’s mayoral elections.

“Our focus now is to ensure that this process does not distract from the running of council services and that the needs of residents are put first.”

Labour candidate for mayor of Tower Hamlets, John Biggs, said: “It was inevitable that something like this would happen, as serious questions about decision-making and use of public money have not been answered by the Mayor. Many of us have been raising these concerns for a long time and it is disappointing Lutfur Rahman has not faced up to them but has issued blanket denials and accused anyone who challenges him of racism.

“I am very worried about the direction the borough has been taking and that is why I am standing for Mayor. It is time the people of Tower Hamlets get the leadership they deserve.”

In a joint statement, Labour MPs for Bethnal Green and Bow, Rushanara Ali, and Popular and Limehouse, Jim Fitzpatrick, said“Whatever our political differences a Secretary of State would not take this action without good reason. Given CLG’s decision to send in inspectors and pass their files to the Metropolitan Police it is in everybody’s interest that all involved are as open as possible so the facts can be established.”

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