An inspection is underway at Tower Hamlets Council this morning by government auditors sent by a cabinet minister, following a BBC Panorama investigation into Mayor Lutfur Rahman.
Local government secretary Eric Pickes today said he has “appointed inspectors to look into allegations of governance failure, poor financial management and fraud” at the council.
The Met police have been sent a file by the Department for Communities and Local Government (DCLG) and the council has been formerly made aware of the decision.
The inspectors from PricewaterhouseCoopers LLP arrived at the Town Hall in Mulberry Place at 8am this morning.
The DCLG said the inspectors will look at council payment of grants, transfer of property, spending decisions in relation to publicity, and other contractual processes from October 2010 to today.
The inspection follows a BBC Panorama programme - broadcast on Monday - which accused the mayor of using public money to promote himself and secure his re-election in May.
The mayor has called the programme “racist” and biased, while the BBC has rejected the criticism and stood by the programme.
This morning’s inspection comes after Mr Pickles received documents about how the council is run, and was ordered using new Local Audit and Accountability Act laws that came into effect today.
The law means the inspectors have a legal right to access all council premises and documents which “appear necessary for the purposes of inspection”.
Mr 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.”
He added: “This central action is not undertaken lightly, but localism requires local transparency, scrutiny and accountability, and these vital checks and balances must be upheld.”
A Tower Hamlets 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.”
He added: “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.”
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