Auditors say Tower Hamlets ‘failed to provide best value’ for residents

Mayor Lutfur Rahman

Mayor Lutfur Rahman - Credit: Archant

A seven-month audit of council finances has concluded that Tower Hamlets Council has failed to provide “best value” to local residents.

Local government secretary Eric Pickles

Local government secretary Eric Pickles - Credit: PA Wire/Press Association Images

In a long-awaited report released this morning, city firm PricewaterhouseCoopers (PwC), appointed by the government in April, blasted the council’s running of its finances, saying its handling of grant allocations, selling of public property and spending on publicity did not give taxpayers “best value for money”.

It added that the council’s current arrangements are “not capable of preventing or responding appropriately to failures of the best value duty”, and questioned whether they were “adequate” to stop future failures.

Local government secretary Eric Pickles, who ordered the £1million audit on April 4, will deliver an oral response to the findings in the House of Commons at 12.30pm today.

The council has yet to issue a response.

PwC were particularly critical of the council’s sale of Poplar Town Hall, saying the council did not choose the highest offer and altered the contract to please the winning bidder, whom it notes had indirect business connections with Mayor Lutfur Rahman.

It found the council’s grant allocation decisions had a general “lack of transparency”, with insufficient overview, and said there was a “lack of control” and “ambiguities” around whether high-paid media advisors were working for the Mayor or the council.

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The report also accused the council of “denial or obfuscation” in its dealing with the auditors, saying: “In our view the authority’s response to the identification of issues in the above areas suggests a tendency towards denial or obfuscation rather than an inclination to investigate concerns raised.”

In conclusion, the report said it did not hold any individual responsible for the failures, but blamed the “weaknesses” of the council’s “existing governance arrangements”.

It said: “In our view the current governance arrangements do not appear to be capable of preventing or responding appropriately to failures of the best value duty of the kind we have identified.

“This calls into question the adequacy of these governance arrangements and the extent to which they are sufficiently robust to enable the authority to prevent or respond appropriately to other failures of a similar nature.”

Check back with the East London Advertiser for more as this story develops.

Read the PricewaterhouseCoopers report here

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