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Tower Hamlets bid to stop Town Hall audit rejected by High Court judge

PUBLISHED: 15:51 05 September 2014 | UPDATED: 18:15 05 September 2014

Mayor Lutfur Rahman (left) and Communities Secretary Eric Pickles

Mayor Lutfur Rahman (left) and Communities Secretary Eric Pickles

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A top High Court judge has this week rejected attempts by Tower Hamlets mayor Lutfur Rahman to halt a major inspection of his council's public spending which had been ordered by Communities Secretary Eric Pickles.

The Town Hall applied for a judicial review in July to stop an audit by Pricewaterhouse-Coopers into its finances—which was ordered by the Secretary of State more than three months earlier over allegations of fraud and financial mismanagement.

But Judge Kenneth Parker has thrown out Mayor Rahman’s application on several grounds including legality.

“The first ground is hopeless,” his statement says. “The defendant (Mr Pickles) was plainly entitled to exercise his common law power to ask an expert body (Pricewaterhouse-Coopers) to assist him by providing advice on any aspect of public affairs that was of potential concern to him.”

Mr Justice Parker adds: “Where concerns have been raised that a local authority is poorly governed, poorly managed financially and may even have engaged in fraud, it stands to reason that there must be concerns as to whether such an authority has exercised its functions as economically, efficiently and effectively as could properly have been expected. The contrary is simply not arguable.”

There were also serious issues of delay, the judge pointed out. The audit was ordered on April 4, but the council applied for a judicial review as late as July.

The application “plainly has to be brought within days—not months,” the judge pointed out.

Legislation which makes the local authority pick up the tabs for a Government-ordered audit came into effect on April 3, a day before Mr Pickles sent in the auditors.

The judge said: “The council allowed the inspector to carry out an investigation for a substantial period, no doubt at considerable public expense, before launching its belated challenge and asking months later for the decision to be quashed.

“There is no good reason for extending the time in which this claim (by the council) should have been brought.”

The council’s next move is for an oral hearing in which its QC Jonathan Swift will challenge the audit. The hearing would decide if a full judicial review should go ahead.

A Town Hall spokesman confirmed this-afternoon: “We will now be proceeding to apply for an oral hearing, which will be lodged today. “

The audit—thought to be costing £1 million so far—follows allegations about misuse of public funds in a BBC Panorama programme just before May’s local elections.

Attempts to halt the audit follows another High Court rejection of a council move to throw out a petition claiming fraud at the polls.

Tory group Opposition leader Peter Golds called the latest High Court rejection “an extraordinary indictment of the management of the council”.

Cllr Golds added: “Twice in four days Rahman has been severely criticised by different High Court judges.”

Tories claim the audit investigation was “another example of Rahman treating the taxpayer as a personal ‘piggy bank’ for his own ego.”

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