Tower Hamlets rejects government audit report, saying ‘no evidence of fraud’

Mayor Lutfur Rahman

Mayor Lutfur Rahman - Credit: Archant

Tower Hamlets Council has rejected the conclusion of a government-backed audit into its finances that it failed to provide residents with ‘best value for money’.

In a statement, the Mayor noted that “wild claims about fraud” were not supported by city firm PricewaterhouseCoopers’ (PwC) report, while the council said there was “no evidence of criminality or fraud”.

The audit report, released this morning, 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”.

But the council has rejected this central conclusion, saying there is “no evidence” that what it called “flaws of process” amounted to a failure of this kind.

A council spokesman said: “While the PwC report identifies some process and governance issues that needed to be improved the council notes that no evidence of criminality or fraud has been identified by the government appointed forensic auditors.

“In our view there is no evidence that these flaws of process are ‘regular or endemic’ meaning that there is no failure to comply with our best value duty.”

The council also asked that local government secretary Eric Pickles “act proportionately” in response to the report and that he “acknowledge the steps we have already taken to tighten up processes as well as the high performing nature of the council’s services”.

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Mr Pickes, who ordered the launch of the audit on April 4, will deliver an oral response to the report in the House of Commons at 12.30pm today.

Mayor Lutfur Rahman said: “In April 2014, Eric Pickles announced that he was concerned about potential fraud.

“These allegations have been rejected by PwC.

“The report highlights flaws in processes. These are regrettable. We will learn from this report and strengthen our procedures accordingly.”

He added: “I was always confident wild claims about fraud would not be substantiated. Both my officers and I want to get on with our jobs serving all residents in Tower Hamlets.”

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

Read the PricewaterhouseCoopers report here

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