Government orders investigation into Tower Hamlets mayor Lutfur Rahman
The government has ordered outside auditors to examine allegations that an east London mayor sought to shore up his vote by diverting £2m in public grants to Bangladeshi and Somali groups.
The communities secretary, Eric Pickles, said staff from the accountancy firm PricewaterhouseCoopers were already in place at Tower Hamlets council. A file is being passed to the Metropolitan police.
This week a BBC Panorama documentary alleged that the executive mayor of Tower Hamlets, Lutfur Rahman, increased taxpayer funding to Bangladeshi and Somali groups from £1.5m to £3.6m against council officer recommendations, cutting what was available for other organisations by 25% overall.
Rahman, who is of Bangladeshi origin, has denied the allegations, accusing the BBC of racism and Islamophobia. He sits as an independent after he was dropped by Labour in 2010.
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.
“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 minister has asked the inspectors to look at grant payments, transfer of property by the authority to third parties, spending decisions and contractual processes since the mayor was elected. They have been asked to report back to Pickles by 30 June.
Tower Hamlets council said it had not seen any evidence of improper actions. A spokesman said: “Under an order introduced yesterday, government auditors are today meeting with senior officers of the council. We welcome the opportunity to demonstrate that council processes have been run appropriately and to date we have seen no evidence to suggest otherwise. This inspection affords the borough the best opportunity to demonstrate that the borough has acted in the best interests of all residents. We will release further information in due course.”
Before the Panorama broadcast, Rahman said he had acquired a dossier of internal documents passed on by a researcher who worked on the programme. She took copies of the production files including the script, research notes, translations and details about secret filming from a shared but secure database.
Rahman claimed these revealed “clear racist and Islamophobic overtones targeting the Bangladeshi Muslim community in Tower Hamlets” and that the broadcaster had breached its editorial guidelines. The BBC denied there was any racial, religious or political motivation to the documentary.
The shadow communities secretary, Hilary Benn, said: “Given the allegations that have been made over several years, and the material submitted to the communities and local government secretary, some of which has now been passed on to the Metropolitan police, about the running of Tower Hamlets, it is clearly in the public interest to establish the facts.
“Nobody should prejudge the outcome, and anyone who has information must present it to the inspectors. This audit must, of course, be full, open and transparent in order to command public confidence.”
BBC