The government will attempt to bring Tower Hamlets LBC under control by appointing three commissioners to oversee grants and property sales.
A damning report by accountants PwC revealed a failure of the council to act in the best interests of the local residents over grants, sales and appropriate use of the council’s budget.
Mr Pickles, the Local Government and Communities Minister, told MPs today that he would be writing to Tower Hamlets with the proposed package which includes the Commissioners staying in their positions until 31st March 2017 and reporting to Mr Pickles biannually.
Mr Pickles told Parliament today: “This government has long been concerned about the worrying pattern of divisive community politics and alleged mismanagement of public money by the mayoral administration in Tower Hamlets.”
“Executive power is unchecked and executive power has been misused.” he added.
PwC found the arrangements at Tower Hamlets “do not appear to be capable of preventing or responding appropriately to failures.”
In addition, it raised concerns about the sale of council property, highlighting in particular Poplar Town Hall which was awarded to someone who had ‘connections to business interests and an association with the mayor’. The winning purchaser was not the highest bidder for the property and the contract was also changed at their request, the report revealed.
Grants were also rewarded to organisations “which were ruled ineligible” and these applicants who had failed to reach the minimum standards required by the council’s rules were still awarded £407,700.
The findings also cast a shadow on the political activities of the Mayor, with investigations into the media advisors to the mayor. Investigators looked into whether they were there in a political capacity and concluded “that there is a failure to comply with best value duty” implying these staff, paid for by tax payers, were not there for the best interests of the local authority.
Previous findings by the communications regulator Ofcom said five television channels had run adverts from the council: “The clear implication” it was found, “That authority monies were spent inappropriately on what amounted to political advertising for the mayor.”
They also slammed attempts to create obstacles to those gathering evidence, even though Tower Hamlets had said publicly they supported the investigation.
“My proposed intervention is centred on putting in place a team of three commissioners who I will appoint and who will be accountable to me.” said Mr Pickles.
“Their role will be to oversee, or as appropriate, exercise certain functions of the council.”
In addition Mr Pickles said he would direct the council “as a matter of urgency” to recruit key members of staff including a permanent chief executive. This position has been vacant since July 2012 meaning that a huge amount of power has resided with Mayor Rahman.
In a response to this report Mr Rahmen said that flaws highlighted by the report were “regrettable” but added “In our view there is no evidence that these flaws of process are ‘regular or endemic’ meaning their is no failure to comply with our best value duty.”
Others, including the political opposition on Tower Hamlets, may disagree.
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