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Watchdog probes council freesheet's 'ad revenue' methods

PUBLISHED: 22:53 19 March 2008 | UPDATED: 13:08 05 October 2010

GOVERNMENT watchdogs are to probe the way Tower Hamlets council accounts for advertising revenues from its East End Life newssheet. The Audit Commission is to look into why a six-strong Town Hall sales team is charging different ad rates to its own departments

By Ted Jeory

GOVERNMENT watchdogs are to probe the way Tower Hamlets council accounts for advertising revenues from its East End Life newssheet.

The Audit Commission is to look into why a six-strong Town Hall sales team is charging different ad rates to its own departments.

It will also examine why some of the rates for internal ads are even higher than those charged to external clients.

The Advertiser revealed last week that budgets for frontline services like childcare were being squeezed because of East End Life's inter-departmental advertising bills.

The £500,000 of internal 'revenue' raised by the weekly freesheet is offset against the paper's annual £1 million operating costs. Every £1 booked as internal revenue 'reduces' its net cost.

Chris Payne, head of the paper's £244,000-a-year sales force, has told his Town Hall bosses he will make it "break even" within a few years.

But the Audit Commission said these accounting issues are being including as part of the audit plan for the 2007-08 accounts.

ted.jeory@archant.co.uk

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