Some firm action was announced today by the Communities and Local Government Secretary Eric Pickles to tackles corruption in Tower Hamlets.

Following concerns raised about the east London borough he had commissioned PricewaterhouseCoopers to undertake a formal “Best Value” inspection report of the Council.

This morning he published the report.

Mr Pickles says:

“It paints a deeply concerning picture of;

– obfuscation,

– denial,

– secrecy,

– the breakdown of democratic scrutiny and accountability,

– a culture of cronyism risking the corrupt spending of public funds.”

He offered a summary of what was discovered:

“PwC found the Mayoral administration’s grants programme handed out taxpayers’ money with no apparent rationale for the grant awards.

There was no objective, fair or transparent approach to grants which the Council’s so-called Corporate Grants Programme Board was supposed to ensure.

There was no proper monitoring.

Grants were systematically made without transparency.

The officer evaluations were overruled.

Across Mainstream Grants, 81% of all officer recommendations were rejected.

Over £400,000 were given to bodies which failed the minimum criteria to be awarded anything at all.

On land disposal, properties were sold to third parties without proper process.

Poplar Town Hall was sold to a company involving a person who had helped the Mayor with his election campaign, against internal advice, and the winning bid was submitted after other bids had been opened.

A number of other property transactions similarly had dubious processes.

Taxpayers’ money was spent on unlawful political advertising for the Mayor.

Ofcom ruled that the spending was in breach of the Communications Act 2003 and the Code of Broadcast Advertising.

There was a lack of any documentation or monitoring of the use of media advisers.

So taxpayers’ money could be improperly and unlawfully used to pay for the Mayor’s political activities

Irregular practices took place in the awarding of contracts.

For example, PwC identified cases where one of the Council’s officers recalls that during a meeting, the Mayor allegedly annotated a list of suppliers to indicate which suppliers he did not wish to be selected.

As a whole, PwC conclude that the Council has failed in numerous respects to comply with the best value duty.”

Given the “fundamental breakdown of governance in this Mayoral administration” Mr Pickles has decided to intervene:

“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.

Their role will be to oversee, or as appropriate, exercise certain functions of the Council.

I envisage the Commissioners will be in place until 31 March 2017.

It will be open to Ministers to review this in the light of the progress made by the Council to secure compliance with its best value duty.

To help me assess that progress, I am proposing that within 3 months of launching the intervention, the Council will – with the Commissioners – draw up and agree an action plan for securing the Council’s future compliance with the best value duty.

The Commissioners will report to me at 6 monthly intervals on progress being made.

This action plan must reflect the specific intervention measures in the proposed package.

These are as follows;

  • First, I propose to direct the Council as a matter of urgency to undertake, as the Commissioners may direct and to their satisfaction, a recruitment exercise to make permanent appointments to the positions of the three statutory officers, all currently only interim appointments. I also propose to direct that any subsequent dismissal, suspension, or further appointment of statutory officers must be with the agreement of the Commissioners.
  • Secondly, I propose to direct that the Council’s functions on grant making are to be exercised by the Commissioners; the Council must provide the Commissioners with all the assistance they need. The Commissioners will have regard to any views the Council has on the making of grants.
  • Thirdly, I propose to direct that the Council obtains the prior written agreement of the Commissioners before entering into any commitment to dispose of, or otherwise transfer to third parties, property other than housing.
  • Fourthly, I propose to direct that the Council prepares a fully-costed plan for how its publicity functions can be properly exercised. It must agree that plan with the Commissioners, report to the Commissioners on the delivery of that plan, and adopt any recommendation of the Commissioners with respect to that plan or to publicity more generally.
  • Fifthly, I propose to direct that the Council’s functions of appointing an Electoral Registration Officer and a Returning Officer for elections are to be exercised as a matter of urgency by the Commissioners.
  • And sixthly, I propose to direct the Council to prepare with the Commissioners a plan for addressing the weaknesses on contracting identified in the PwC report.

He concluded on a more positive note:

Despite the rare cases like Tower Hamlets, as a whole, councils have a good record of transparency, probity, scrutiny and accountability.

It is a reputation worth protecting.

As a former councillor, I am proud of the standing that local government has in the United Kingdom, of what it contributes to the lives of our communities up and down the country.

I will take whatever steps are necessary to uphold the good name of local government.

There can be no place for Rotten Boroughs in 21st Britain.

Earlier this year I concluded that democracy was not functioning in Tower Hamlets. The rule of law does not appear to have been either.

The soft option would have been to have quietly ignored these problems.

Mr Pickles has chosen instead to sort them out. That is tremendously heartening.

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