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A High Court judge today rejected Tower Hamlets council’s long running legal challenge to Eric Pickles’ decision to send in inspectors to the town hall.

Mr Justice Goss refused the council permission to proceed to a full judicial review of the legal basis for the inspection, which culminated in PricewaterhouseCooper’s highly critical report of the town hall last week.

Today was the second rejection of the council’s legal bid by a senior judge and its costs are in the region of £50,000.

In August, Mr Justice Kenneth Parker in a written ruling (here and here) had described the application as “hopeless” and “unmeritorious”.

Undeterred, the council, led by Mayor Lutfur Rahman and advised by Interim Monitoring Officer Meic Sullivan-Gould, then requested today’s oral at the Royal Courts of Justice.

However, the council’s barrister, Jonathan Swift QC, lost his argument.

The council’s legal costs on this case alone are at least £40,000.

Today’s judge also ordered the town hall to pay DCLG’s legal costs of £8,500.

When Eric Pickles announced the inspection in April, the council issued a statement “welcoming” the chance to prove it spent taxpayers’ money in a “best value” way.

The council was then criticised by the Government for dragging its heels during the inspection and while it contested its legal basis.

Local Government Minister Kris Hopkins said after today’s hearing: “We are pleased that the courts have thrown out Tower Hamlets’ legal challenge for a second time.

“However, it is disappointing that local taxpayers are having to foot the bill for the Mayor’s legal costs.

“This reflects a culture of denial in the local authority about the dysfunctional governance of the mayor’s administration.”

Mayor Rahman said: “Our case challenged the £1m cost of the audit and raises fundamental questions about the legal relationship between local and central government.

“We are disappointed that the judge refused permission for us to proceed to a full Judicial Review hearing. We are now fully engaged with responding to the Secretary of State’s proposals and will continue to do all we can to ensure that our residents interests come first.”

…………

This was Mr Justice Kenneth Parker’s written ruling from August:

3 - Tower Hamlets Judicial Review Judgement 3a - Tower Hamlets Judicial Review Judgement

Today, Mr Justice Goss said he could not do any better than his colleague. He read out ground three again in its entirety.

The first ground (on timing) was not considered again today as it was regarded as “hopeless” first time round, and Tower Hamlets decided not to put it forward.

……and two days ago, Ken Livingstone at the Water Lily rally urged Lutfur to hire the best lawyers and challenge Eric Pickles’ proposal to send in Commissioners.

Ken did not say that he would personally fund such a challenge. Funny that.

It’s always easier with other people’s money.

One veteran of the Respect party said to me as I was leaving last night’s rally at the Water Lily centre in Mile End: “It’s just like the old days again.”

Depressingly, in many ways he was right. Lots of pretty tedious and predictable speeches, a few cheap and several offensive jokes about Eric Pickles’ weight. It’s strange how the so-called Left get off on making these remarks about a man’s appearance.

But how the audience giggled! …And then cried racism against the man one not-so-svelte union official called “the fat controller”.

They also mocked DCLG’s spending on limousines. But failed to mention Lutfur’s four years of travelling around the borough in a chauffeured Mercedes.

The lack of self-awareness and introspection was and is frightening.

The audience was huge. I’d guess easily upwards of 500.

The theme was “Defend Democracy in Tower Hamlets”, but that was a bit of a smokescreen. In reality, it was an election rally of the Left against the Tories.

I understand that Cllr Abjol Miah orchestrated it. The former leader of the Respect group and a serial failure in his attempts to become MP wants another crack at Westminster. He wants to challenge Rushanara Ali in Bethnal Green and Bow.

So too do Cllrs Rabina Khan and Ohid Ahmed.

Galloway, whose aides used to rail against Lutfur when he was in Labour, warned that if Tower Hamlets First didn’t field a candidate, Respect would. Some interpreted that as he would stand again but even he knows he’d be laughed out of the borough again.

His underlying message, I inferred, was he’d endorse Abjol as his candidate. Rushanara is said to be anxious but I think she’s safe.

As for Ken’s input last night:

1. He said he and fellow Labour NEC member Christine Shawcroft (who made the most boring speech of the night, and that’s saying something) would submit a motion at their next meeting calling for Lutfur’s re-admittance into the party. (He really does have a dry sense of humour, doesn’t he?)

2. He called on Lutfur’s hot-headed supporters to find the home addresses of the three Government Commissioners when they arrive in Tower Hamlets, and then protest outside “to make their lives intolerable”.

That remark prompted this response today from Local Government Minister Kris Hopkins:

I am appalled at Ken Livingstone’s comments which run the risk of stirring up a lynch mob mentality in Tower Hamlets. 

The borough is already riven by the politics of intimidation and division, and stupid remarks like his will only worsen community tensions. 

We will not be intimidated from taking any action necessary to ensure a free and fair democracy operates in the borough.

As for the PwC report, the only person to make more than a passing reference to it last night was in fact Lutfur. He said he would learn from the process failures and that the council would “embrace the Commissioners” when they arrive.

Well said, but let’s see.

Radio 4’s Today programme was there last night as well. Their reporter Zoe Conway broadcast this excellent report this morning.

Listen to how she puts Ken on the spot, how he flounders; how she puts Galloway on the back foot; and how she reduces Lutfur to robot mode, monologuing his usual mantra about all things One Tower Hamlets.

A nice hat-trick.

listen to ‘Tower Hamlets, Mayor Rahman rally’ on audioBoom

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When the Press and Journal newspaper broke the story yesterday that Takki Sulaiman had been named as Aberdeen City Council’s preferred candidate for a newly created post as communications boss, there were a few raised eyebrows.

Councillors who had been on the appointments committee there claimed they’d been unaware he’d been a member of Haringey Council between 1998 and 2006. They’d been supplied a version of his CV but there was no mention of that illustrious period in his life. I understand he had notified the council at the “application stage”.

The omission has caused something of a row in Aberdeen.

The Press and Journal’s political editor Dave McKay reports today:

Aberdeen City Council’s chief executive has been asked to suspend the controversial appointment of a London-based PR chief amid a row over his background as a Labour politician.

Takki Sulaiman yesterday confirmed he had accepted an £80,000-a-year post to help fix the public image of the local authority, which has taken a battering in recent years.

As exclusively revealed by the Press and Journal, Mr Sulaiman was chosen as the preferred candidate to fill the position, which has been described as a “spin doctor” or “happiness tsar”.

Mr Sulaiman, who is leaving a head of communications post at crisis-hit Tower Hamlets Council in East London, is expected to begin his new role early next year.

However, opposition SNP group leader Callum McCaig has called for the process to be halted pending an inquiry.

He said Mr Sulaiman’s CV did not mention the fact that he was a Labour councillor for Haringey, and members of the appointments panel were not informed.

Four councillors who were on the nine-man panel said they were not aware of his political past either.

Last night, Labour finance convener Willie Young, who said on Monday that he “did not know” Mr Sulaiman had been a councillor, insisted the authority’s human resources team had in fact been told at the application stage.

Mr McCaig said: “Given that this is a politically restricted post, we need some clarification on this point.

“We need 100% assurances that this post holder’s loyalty is to the city of Aberdeen and not to the Labour party.”

Ross Thomson, a Conservative councillor who was also on the panel, said he was aware that Mr Sulaiman had worked as a fundraiser for Labour.

However, Mr Thomson added: “I did not know that he was a councillor, but I knew there was a connection with the party.

“Would I declare that? I would say yes, but I don’t think it should impact upon him getting the job or not.”

Labour group secretary Mr Young, who was also on the panel, accused the SNP group of “playing politics”.

He said: “Four out of the nine members of the appointments panel were SNP councillors, they had the majority on the committee.

“It is my information that (SNP councillor) David Cameron definitely knew. If they had any problem with this guy I am sure the four members would have flagged it up.”

So Takki’s job at Haringey is yet to be ratified is being challenged, but his departure from Tower Hamlets council was confirmed by head of paid service Stephen Halsey yesterday. (UPDATE: Takki has accepted his offer at Aberdeen so were that council to withdraw it he would have a legal claim against them.)

It may be that Takki had included his political career on a standard application form that headhunters or HR in Aberdeen then redrafted into a CV. I don’t know.

He refused to tell me when I asked him this afternoon. He told me it was “none of my business”.

For the record, here are two articles that reference his time as a councillor in Haringey during the Sharon Shoesmith/Victoria Climbie era: here and here.

Further to my last post (and the council’s failure to answer my questions), here’s why Lutfur Rahman failed to attend the solemn Remembrance Sunday event in Tower Hill on Sunday:

Lutfur rahman, george gallowayHe was in Bradford for a “young people’s educational awards ceremony”. It was, according to Takki Sulaiman’s press office, a “longstanding commitment”.

But it actually took place on Saturday lunchtime: there are tweets from the event timed at 2pm that day.

Bradford is less than a four hour drive away from Tower Hamlets. I presume he stayed overnight in Bradford on Saturday rather than returning.

It’s his call, of course, but he does invite some pretty justifiable criticism with decisions like this.

The awards at the Shapla Community Hall were hosted by a Bangladeshi organisation called BEAP (Bangladesh Education Achievement Project).

From the video it seemed a reasonably small event, but clearly Lutfur is something of community leader in the wider Bengali community and not just east London. His audience would have been grateful for his attendance.

The video below is fascinating.

George Galloway is the warm-up act for the Tower Hamlets mayor and makes a speech defending him as some kind of ex-Labour/real Labour blood brother.

And at 7.20mins, you can see Lutfur arriving with his kitchen cabinet from Tower Hamlets, ie Cllr Gulam Robbani, Cllr Aminur Khan (Rabina Khan’s husband) and Cllr Maium Miah. If there are others, I’ve missed please let me know.

You then see Galloway embracing Lutfur. It seems Lutfur isn’t that bothered by Galloway, that he’s somewhat embarrassed by him.

They spend a few seconds posing for the cameras and Lutfur barely looks Galloway in the eye as George fawns over him. I was half-excpecting George to lap up some imaginary Lutfur milk.

It seems Galloway is now desperate for Lutfur’s approval. Is it Lutfur who has now become the Real Deal?

Here’s some of Galloway’s speech to the event:

Mayor Lutfur and me and Ken Livingstone have some things in common. One of them is that we were all expelled from New Labour for standing up for principles and standing up for real Labour values. We all three of us then defeated New Labour in election after election.

..I campaigned for a directly elected mayor in Tower Hamlets. We started the petition that created this position and I was proud to work with Mayor Lutfur in both of his successful elections. We should be proud of his victories and his mayoralty in east London.

The authority that he has built is a beacon throughout the country in educational and in other social and political achievements. There are no academies in Tower Hamlets…

I wish we in Bradford had a council like Lutfur Rahman has in Tower Hamlets.

What he has now been subjected to is nothing short of a racist attack. They hate Lutfur because he has proved that Bengalis can win elections and can carry out their promises made to the people.

During my three years at the East London Advertiser, I spent a fair amount of time with George Galloway’s aides in the Respect party.

I’m fairly confident in saying that had the PwC report been written about the Labour administration in Tower Hamlets back then, they’d have milked it for all its worth.

They were as scathing about the then council leader in 2008, Lutfur Rahman, as they were about his predecessors, Denise Jones and Michael Keith. In particular, they disliked what they believed to be the whiff of cronyism…in both the awarding of grants and also the appointment of useful mates to political positions.

In fact, Respect’s decision to organise successful petition that heralded the directly elected mayoral system in 2009/10 was an attempt to end such a culture, they argued.

So it’ll be interesting to see if Galloway, or Glyn Robbins, the former chair of Tower Hamlets Respect, or John Rees, a founding father of the party, refer to any of this when they address the following rally the Water Lily centre in Mile End tomorrow tonight:

george galloway, lutfur rahman

Lutfur has sent this email to his Tower Hamlets first supporters:

Dear supporter,

You’ll probably have heard by now that Secretary of State Eric Pickles has ordered officials in to undermine local democracy in Tower Hamlets, and it’s local residents that are paying for it (sic). You also may have heard that despite Pickles’ decision to send in the attack dogs, the report he ordered found no fraud or corruption in Tower Hamlets. 

He’s seized on any flimsy excuse he can find to shut down the 37,395 voices that voted for Mayor Lutfur Rahman and for a council that stands up to the cuts and invests in education, affordable homes and our future. 
 
This is Pickles versus the people. And it’s up to all of us to stand up to him. 
 
Here’s some simple things you can do
 
- Sign the petition to stop the witch-hunt of Lutfur
 
- Join me at a rally with Ken Livingstone and other national leaders at the Waterlily, 69 Mile End Road on Weds 12th November at 6pm to discuss how we can stand up for democracy. (link to event page)
 
- Tweet and facebook your own opinions about all this under the hashtags #towerhamlets and #respectourvotes
 
- Get in touch with any ideas you have
 
Thank you so much for your help. We haven’t got big banks or corporate newspapers on our side, so every little thing you do really does count.
 
In solidarity, 
 
Tower Hamlets First

The petition they refer to is here, and at the time of writing has 675 votes.

Note its name: ‘Respect our democracy and treat councils equally!’ And note the Twitter hashtag supporters are being urged to use: #respectourvotes.

The word ‘respect’ is popping up a lot.

So of course Galloway won’t lash out at Lutfur for his policy and process failures: they’re merely “flimsy excuses”.

Lutfur is now a convenient “Pickles versus the People” general election tool. Convenient for Lutfur, too, of course: posing the bigger question acts as a smokescreen for the criticisms.

But that’s politics.

There’s even some talk among his supporters that Lutfur may call a mayoral by-election to re-establish his authority. I’m not convinced he would press that nuclear button and in any case, I’m not sure when he would press it.

The Election Court hearing is due to start in mid-late January and it could last until March. Even then, the verdict may be reserved for some weeks.

If he emerges from that victorious, I’m not sure why he’d want or need to hold a by-election (although he could emerge victorious but tainted and damaged).

Who knows what his priorities are.

Certainly, he didn’t prioritise Remembrance Sunday again this year.

He was again a no-show at the wreath-laying ceremony at Tower Hill on Sunday, when there were huge crowds in the area observing the ceramic poppy display in the Tower of London moat across the road.

Lutfur’s reserved seat next to the Deputy Lord Lieutenant of London, Commander John Ludgate, remained empty.

I asked the council’s press office for an explanation and this was their reply:

The Mayor was regrettably unable to attend the Merchant Navy Memorial Service on Sunday due to a long-standing commitment to attend an (sic) young people’s education awards ceremony outside London. In his absence the Mayor asked Mickey Ambrose, former footballer and Duke of Edinburgh Awards ambassador to represent him and lay a wreath on his behalf.

‪Mr Ambrose said: “I was honoured to be a part of such a moving service and pay my respects to the courageous men and women who have served our country.”

‪The Mayor attended a Remembrance Service on Friday at City Hall with other Mayors and Council leaders, and is looking forward to the Armistice Day event on Tuesday at the Town Hall. The Mayor will also host a reception for war veterans after the event.

Mickey Ambrose stood and lost as a Tower Hamlets First candidate in Bow East in May. Quite why Lutfur asked him to deputise and not any of his elected councillors is a mystery.

I also asked the council what this longstanding awards ceremony commitment was, when it actually took place and where it was held.

They’ve declined to reply.

Anybody know?

And so the creatures begin to leave the ship.

The Press and Journal newspaper in Aberdeen has this as the main story on its website:

Takki Sulaiman, aberdeen

The paper’s David McKay reports:

Council leaders in Aberdeen last night revealed that a PR chief at a “rotten borough” English authority is the man they want to transform the city’s public image – even though he has yet to accept their £80,000-a-year job offer.

Takki Sulaiman is currently employed at Tower Hamlets in East London, which has been at the centre of “cronyism and corruption” allegations in recent weeks.

Aberdeen’s deputy council leader Marie Boulton confirmed that Mr Sulaiman, a former Labour councillor, is the preferred candidate to take on a new head of communications and promotion job in the granite city.

The role was created as part of a restructuring of the council, but prompted complaints from opposition members who argued the money could be better spent elsewhere.

Senior members of the Labour-led administration argued that the appointment would help boost the outward perception of an authority which has been dogged by controversy in recent years.

A divisive battle over the future of Union Terrace Gardens was followed by an attempt to ban First Minister Alex Salmond from all council property in the city.

Criticism has also been levelled at the leadership over the £107million Marischal Square revamp of the former council headquarters.

Mrs Boulton, who convened an appointments panel to fill the post, said she was “hopeful” that Mr Sulaiman would accept the job, but played down the media storm surrounding the London borough council.

She said: “We went through a rigorous interview process, we had stakeholder groups involved throughout, the corporate management team interviewed him and he came in front of elected members and the chief executive. All of the groups recognised that he was the preferred candidate.

“We are aware of the criticism that has been levelled at Tower Hamlets, but based on the conversations we had with the chief executive, she was confident and happy to proceed.

“Aberdeen is obviously quite a tough environment to work in, in terms of the media. The city went through problems with Audit Scotland under the previous administration, we have also had our difficulties.”

Mr Sulaiman, who is understood to be earning about £98,000-a-year in his current role, has not yet accepted the job and did not respond to inquiries from the Press and Journal yesterday.

Mrs Boulton pointed out that he had impressed panel members with his experience during the London Olympics and the regeneration of the Tower Hamlets area as a result.

Labour group secretary Willie Young said he was unaware that the top candidate for the new post was a former Labour councillor for Haringey.

He said: “That never even came into it. This was a guy who we were looking at purely on an employment basis, and he came across as by far the best candidate.

“It was a unanimous decision by a cross-party panel, including opposition members.”

With reference to the ongoing troubles at Tower Hamlets, Mr Young added: “I think there is a huge difference between the political administration and an individual, and this individual went through a rigorous process.”

However, Callum McCaig, leader of the opposition SNP group, said: “The very fact that this person who has been offered this spin doctor position at Aberdeen City Council is coming from somewhere branded as a rotten borough begs the question of who in their right mind thinks that this is a good idea.

“When you add the irony of the fact he is a former Labour councillor and Tower Hamlets has been described as a hotbed of cronyism – it would be funny if huge amounts of public money were not being spent on a position that we don’t actually need in the first place.”

Aberdeen City Council’s media team did not respond to a request for comment last night.

Journalists and SNP members in Aberdeen can research some of Takki’s record here.

I was told on the night of the Tower Hamlets election count in May that Takki was looking for a new job, so his job search seems to have been going on for a good six months.

He may be many things but he’s not that stupid (although his refusal to engage with critical elements of the press has been dumb): he can see which way the wind is blowing.

Eric Pickles is on a war footing with East End Life, which Takki oversees as head of communications. It’s almost certain the DCLG Commissioners will also take some control of Takki’s department when it comes to council publicity planning.

If he didn’t think his position was actually under threat, he’ll know it’s going to become less enjoyable.

But if he does leave, this might be a good chance to start the much-needed renewal of the borough’s reputation. Slashing the role’s £98k salary would be a first step.

Anyone tempted by the role?

Predictably, there seems to be a rearguard action among Lutfur Rahman’s supporters to try and downplay the PwC report.

We can sum up their arguments thus:

1. PwC found no evidence or fraud or corruption

2. What about other councils such as Newham, Basingstoke and Dean, and Timbuktu (ad nauseam): why not investigate them, why pick on Tower Hamlets?

3. How dare PwC lecture Tower Hamlets taxpayers on the best value of public money when it ‘creams’ off millions in Government contracts.

4. It’s a Tory plot.

Numbers 2, 3, and 4 are the arguments of student common room (where 9/11 truthers might even find a home).

On Number 1, the report says it was made aware of nine cases of suspected fraud involving grants and contracts during its inspection, but it agreed to leave these alone as further questioning might jeopardise police/council investigations.

We can assume that money linked to the Brady Youth Forum was one of those nine and, as I pointed out in this post here in April, the council has some explaining to do on that.

The report, when you read it in detail, is excellent. As I’ve said before, the PwC auditors were clearly shocked by what they found.

And from the tone of the report, you can see where they believe the problems lay. I suspect they had some (probably more than some) sympathy with most council officers (although there are one or two significant exceptions to that).

On the other hand, they seemed wholly unimpressed with certain elected members and their powers of recall to remember important facts and details. The Mayor himself, lawyer, suffered from that problem, but he is much busier than his underlings.

The devil is in the detail, as they say. There was unjustifiable political interference in decision-making. Grant awards could easily have been made on the back of an envelope.

What I’d like to see is much more evidence on how the grant monies were/are actually spent. Which salaries are b eing paid for, what do they do etc etc?

When, in 2012, I highlighted the questionably invoices submitted by Gulam Robbani for his work as a mayoral adviser, there was outrage across the political spectrum, including from inside Lutfur’s camp.

Those invoices, which ‘detailed’ some pretty dodgy timesheets for his work, were signed off by the head of Lutfur’s office, Murziline Parchment. Did she check work done against his invoices? No. He may well have done work to justify his contract but those invoices didn’t show it.

There was no financial or management control in place. And when there are no such controls, you create an environment where wrongdoing can happen. Or where you don’t get the best value for public money.

That’s what PwC have highlighted. How many of these groups receiving grants are submitting solid invoices to back up their original applications?

Surely Lutfur’s supporters can see this? You wouldn’t run a business with your own personal money in that way, so why should a council be any different?

As for Number 2: let’s not forget that the politics of Tower Hamlets have been a nationally known basket-case for many years. It’s reputation become increasingly poisonous. You only have to watch to the video of Alibior Choudhury labelling former Labour councillor Ann Jackson a fascist-type ‘black cardigan’ (when she was in mourning for her ex-husband) to see how low it has stunk.

The dysfunctional politics (together with the challenging transformation to a mayoral system of governance) has caused real problems at officer level. The lack of a strong chief executive and a decent monitoring officer is both a symptom of that, and a contributory factor to the reputational chaos.

On Number 3. This is another form of whataboutery. Shoot the messenger. There are of course concerns about corporate lobbying of government and Whitehall waste. The latter has been something of a political mantra for Eric Pickles himself. But banging on about the bigger macro picture does a disservice to the actual cause.

If we have more scrutiny and adherence to processes at a grassroots/micro/town hall level, then there’d be less need (and work) for the likes of PwC. PwC were brought in because there were obvious failings in that respect.

Take care of the council pennies and the national pounds will better (to some degree) look after themselves.

As for Number 4: if it’s a Tory plot, might you argue: Why hasn’t Pickles gone after the country’s biggest Labour dominated authority, ie Newham?

Lutfur was an easier target, of course, because he was no longer part of the political mainstream. He didn’t have Labour support. But again, this is all part of the dysfunctional politics.

So where are we at?

The council has given its assurance to DCLG over the distribution of further grants, as required by Eric. It has until November 18 to make its representations on the proposal to send in Commissioners.

Some in Lutfur’s team want to take an aggressive stance and examine a possible legal challenge…another misguided David vs Goliath battle.

I know there are senior council officers who would rather now just knuckle down and take the medicine. Further legal challenges would just further erode the borough’s reputation.

Lutfur should see the appointment of commissioners as an opportunity. With them there, it’ll arguably be more difficult for people to criticise him. He’d benefit, both politically and as an administrator. He’d be better able to concentrate on his messages such as housing.

And when/if the Commissioners leave in 2017, a year before the next election, he might even have a good success story to sing about.

In the meantime, I leave you with PwC’s report on how the council co-operate with the inspection team (this, remember, after the town hall had ‘welcomed’ their arrival). The penultimate paragraph, 1.46, is particularly telling. The Interim Monitoring Officer is not named: It’s Meic Sullivan-Gould.

Timing and duration of the Inspection

1.28 The Inspection commenced on 4 April 2014, the date of the Appointment Letter. Our field work was substantially complete by 5 September 2014, since which time we have focused on fact checking with the Authority and with individual witnesses (see below for more detail) and in finalising this report.

1.29 In the Appointment Letter, we were directed to report our findings from the Inspection by 30 June 2014 or such later date as might be agreed between us and the Secretary of State. This flexibility reflected the inherent uncertainties at the outset of the Inspection. Examples of these uncertainties included the

volume and ease of access of information that might need to be examined; the extent, nature and implications of any issues that might emerge; and the level and timeliness of co-operation we would receive from the Authority.

1.30 By a letter dated 27 June 2014, PwC informed DCLG that it would not be in a position to report by 30 June. This letter formalised the position that had been apparent for some time prior to that date and which had been discussed between PwC and DCLG on a number of occasions. The primary reason given in the 27 June letter for the need for an extension beyond 30 June 2014 was the failure of the Authority to provide information on a timely basis, or at all, in relation to a number of important requests made by the Inspection team. Given the inherently iterative nature of the Inspection, the delay in provision of information had a significant impact on our overall progress in pursuing our enquiries in the various areas of focus, as well as our ability to plan for and arrange interviews, which were expected in turn to bring to light further information and documents that we would need to review and consider.

1.31 By a letter dated 30 June 2014 DCLG replied, agreeing to a postponement of the reporting deadline. It was proposed that further discussions should take place between PwC and DCLG in the first half of July 2014 to determine by when PwC could reasonably be expected to report under the circumstances. Those discussions led to the conclusion that we were unlikely to report before the middle of September 2014, but that the position would be kept under regular review.

1.32 For the sake of completeness, it should be noted that by a letter dated 4 July 2014 (received by PwC on 7 July 2014), the Mayor wrote to PwC objecting to the manner in which the Authority’s level of cooperation and responsiveness to requests had been characterised in PwC’s letter to DCLG of 27 June 2014 and asserting (in summary) that such characterisation was inaccurate and partial. PwC responded to the Mayor’s letter by a further letter dated 17 July 2014. In the 17 July letter, PwC rejected the Mayor’s assertions on the basis that there were no material errors of fact in our 27 June letter, and also took the opportunity to expand on some of the aspects of the Authority’s stance that had contributed to delays in the provision of requested information and documentation.

1.33 On 25 September 2014 we received a further letter from the Mayor responding to our letter of 17 July 2014 to him. The Mayor reiterated his view that our 27 June 2014 letter did not present an accurate and impartial view of the Authority’s co-operation with the Inspection. We remain of the view that our 27 June 2014 letter presented a materially accurate and fair view of the position. We will respond formally to the Mayor’s latest letter shortly.

Approach to our work

General principles

1.34  As directed by the Secretary of State through the Appointment Letter, our primary focus throughout the Inspection has been the four areas outlined at paragraph 1.8. Our approach to each of these areas is set out in more detail in the relevant sections of this report, however, at a general level, our approach to each area has typically included the following common elements:

Fact finding meetings with relevant officers (i.e. employees of the Authority) (“officers”) to gain an understanding of the operation of the area in question;

“Walk-throughs” of relevant processes to confirm our understanding;

Requests for information, data and documentation of relevance to the Authority’s financial systems, relevant processes generally, or individual programmes or transactions, as appropriate;

Detailed analysis of individual transactions or categories of transactions targeted on a risk based approach; and

Formal interviews with selected officers, councillors and the Mayor.

1.35  The above steps are iterative and often overlapping, rather than strictly sequential. Furthermore, while each of the four areas has been the subject of a separate work stream within the Inspection, there are certain points of cross-over between them, which are brought out in the relevant sections of this report.

Selection of items for detailed examination

1.36  Within the four primary areas of focus, the selection of specific transactions or categories of transaction for detailed examination has been judgemental and risk-based rather than purely random or statistical. As intimated above, the Inspection has not occurred in a vacuum. It was instigated as a result of concerns brought to light by a variety of sources, some of which have been aired in the media. In addition, further sources, from both inside and outside the Authority, have approached us with information during the course of the Inspection. We have also had regard to matters escalated through the Authority’s own governance processes, including the deliberations of the Overview & Scrutiny Committee (the “O&S Committee”) and the work of the Authority’s Internal Audit function. Finally, we have made our own judgements about where risks might lie given the nature of the transactions in question.

Information sourced other than from the Authority

1.37  In the early stages of the Inspection, we established a dedicated and regularly monitored email address (lbth.inspectors@uk.pwc.com) through which anyone wishing to provide information in confidence could contact us. This email address was featured on the DCLG website. Over the course of the Inspection, we have received 256 communications into that email address from 38 individuals. In addition, other sources have approached us directly (i.e. other than through the dedicated email address referred to above), again with information of varying degrees of relevance to our remit. Not all of these communications were relevant to our terms of reference, but those that were have been factored as appropriate, into our approach.

1.38  In addition to the above, we have also had dialogue with a number of former officers of the Authority about their contemporaneous knowledge of matters relevant to the Inspection.

1.39  We have actively sought to engage with those sources who have come forward and who appeared to have information of potential relevance to our terms of reference and where we required further detail or clarification. Not all sources have been able to back up their concerns or allegations with tangible evidence and in those instances, where we have not been able through our Inspection to fill this evidential gap, we have been unable to give the information they have provided much, if any, weight.

Fact checking by the Authority and by interviewees

1.40  The extensive factual components of sections 3 to 7 inclusive of this report have been subject to a fact checking exercise between us and the Authority. The Authority was given a 10 working day period from 11 to 24 September 2014 to review factual extracts and provide comments and, where appropriate, any additional evidence which it wanted us to take into consideration. In parallel, individuals whom we have interviewed, and from whose interviews we were proposing to cite particular statements (with or without attribution), were given the opportunity over 10 working days to review and comment on those citations. We have received responses from the Authority and the majority of the relevant individuals, which at our discretion we have reflected as we deemed appropriate in this final version of the report.

The Authority’s stance vis-à-vis the Inspection

1.41  On 4 April 2014, the date of our appointment, the Mayor’s Office4  issued a statement welcoming the Inspection stating “I welcome the Secretary of State’s decision to send independent auditors to review our grants processes. This review will demonstrate that the Council acts in the best interests of all Tower Hamlets residents ”.

1.42  On 1 July 2014 (some three months later) the Mayor wrote to the Secretary of State informing him that he had asked the Authority’s Interim Monitoring Officer to initiate a judicial review of his decision to instigate the Inspection. We note that, in refusing the Authority’s application for judicial review, the judge considered each of the grounds advanced by the Authority in its application as “unmeritorious” and the first ground as “hopeless”. We understand that the Authority has now applied for an oral hearing and that this is due to be heard by a High Court judge on 14 November 2014.

1.43  It should be acknowledged that the Authority gave assurances to us that the initiation of judicial review proceedings would not affect the on-going cooperation of the Authority with the Inspection. Notwithstanding the issues outlined below and elsewhere concerning the level of cooperation of the Authority and its responsiveness to our requests for information and documentation, it is fair to say that the commencement of judicial review proceedings did not in itself have any significant effect on the Authority’s dealings with the Inspection team.

1.44  At the outset of the Inspection the Authority established a Project Management Office (“PMO”) to oversee and manage the flow of information and documentation to the Inspection team and to assist in the arrangement of meetings and, in due course, more formal interviews. This was in principle a helpful step and created a useful mechanism for liaison between the Inspection team and the Authority, very much in accordance with our desire for there to be a clear line of communication and a single point of contact for formal requests. The Inspection team has met regularly with the PMO team to discuss the status of information requests and provide further explanation and clarification where necessary. Initially, such meetings took place on a daily basis, reducing in frequency as the Inspection progressed and the need for such frequent meetings reduced. We recognise the PMO team and no doubt many other officers have put in considerable effort to collate and provide the requested material.

1.45  Over the course of the Inspection, we made a total of 290 requests via the PMO for information or documentation. Some of these were quite broad, in some cases involving the provision of large volumes of documents or data, while others were for targeted items mentioned to us in meetings or interviews or referred to in other documents already provided to us. Inspectors are required to give three days’ notice of a request. In practice, we have not generally insisted on being provided with full responses to all requests within three days, recognising that some of our requests were substantial in scope or that the requested information or documentation might reasonably be expected to take longer to collate.

1.46  As discussed at paragraph 1.41 et seq, despite its public assertions of support for the Inspection, the Authority has at various stages raised a number of obstacles to our progress which have significantly delayed the provision of information or documentation and which in large part led to our request for an extension of the time table for the Inspection. These obstacles broadly related to the Authority’s concerns about the legality and/or scope of the Inspection. Additionally, the Authority raised issues as to whether or not we were entitled access to documents that might be covered by legal professional privilege.

Taking each of these in turn:

On 12 May 2014, we were informed that the Interim Monitoring Officer required us to “certify” a significant number of requests. There is no legal basis upon which the Authority could require such certification, and we were not prepared to do so. Furthermore, the form of words the Authority sought to prescribe in the certification defined the scope of the Inspection too narrowly and were therefore not in a form which we could accept, even if we had been prepared to do so in principle. All requests for which the Authority was taking the position that it needed individual certification were put on hold. On 13 June 2014 (just over a month later) without further explanation, we were informed that certification was no longer an issue.

On 7 May 2014 we requested access to certain legal files. This request was followed up as outstanding on a number of occasions until 4 June 2014 (almost a month later), when the Authority informed us that we were required to sign up to a number of written conditions and undertakings in relation to the requested material. These included an acknowledgement up front that all the said material was privileged, which we pointed out we could not know without seeing it first and which was unlikely in any event, given the probability that even legal files would contain material that was not itself privileged by virtue of the circumstances in which it had been created. Without our acceding to all of the Authority’s demands in relation to this material, we started to gain access to it on 16 June 2014, some six weeks after first requesting it.

1.47  One example of a request of central importance to the Inspection which was subject to very significant delay was the provision of basic accounting data covering the majority of the Period. Until 1 April 2013, the Authority used a JD Edwards Financial System, migrating to an Agresso Financial System during that year. While in discussions with the Authority about the provision of data from the current Agresso Financial System (which also resulted in some delay) we requested data from the JD Edwards Financial System on 29 April 2014. We know from discussions with relevant Authority staff that the data was extracted and ready to be provided to us by 12 May 2014. However, the Authority challenged the legality of this request, and it has continued to reserve its position on this matter, even as it finally authorized the release of the data to us on 20 June 2014, almost two months after the initial request and just ten days before our original reporting date. We have referred to the data from the JD Edwards Financial System and the Agresso Financial System together in the remainder of this report as the “Financial Data”.

 

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