Following the BBC Panorama investigation on Monday, the Communities and Local Government, Eric Pickles, this morning appointed inspectors “to look into allegations of governance failure, poor financial management and fraud at the London Borough of Tower Hamlets.”

PricewaterhouseCoopers LLP to carry out an inspection of the council. A file is being passed onto the Metropolitan Police for consideration. The PricewaterhouseCoopers inspection will look into evidence of the authority’s payment of grants, the transfer of property, spending decisions in relation to publicity, and other contractual processes from 25 October 2010 to the present day.

Eric 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.

“I hope this sends a strong signal that robust processes are in place to investigate allegations of failures in financial management and governance in local government, under the new regime introduced by the Local Audit and Accountability Act which replaces the Audit Commission.

“This central action is not undertaken lightly, but localism requires local transparency, scrutiny and accountability, and these vital checks and balances must be upheld.”

The inspectors have a legal right to access all premises and documents belonging to the authority which appear necessary for the purposes of inspection. They are already on site.