On April 16, 12 days after Eric Pickles sent PwC to Mulberry Place, Takki Sulaiman, Tower Hamlets council’s £100,000 a year head of communications and marketing (and publicity), wrote this in an email to me:
Maybe those who followed your lead may regret they rushed to judgment about LBTH and our processes? Meanwhile we get on with the business of running services – and working with the auditors.
I’ve been looking forward to publishing those words today.
It’s always easy to jump to judgment with Tower Hamlets council. Some of the “damning report” headlines that appeared across the media this morning were quite probably pre-planned.
I said in my last post I’d reserve judgment until I’d gone through some of the details and listened to the exchanges in the Commons.
Well, the exchanges among Tory and Labour MPs were universally damning, there’s little doubt about that. My prize goes to Ealing MP Steve Pound, who can always be relied upon for vivid language. He said the mayor’s office was responsible for a “foul, fetid, reeking stench” emanating from wonderful Tower Hamlets.
Eric himself was also up there. “There can be no place for rotten boroughs in 21st Century Britain,” he said…(to which Tim Minogue, the editor of Private Eye’s Rotten Borough column, tweeted: “Is that a threat?”)
But what of the substance of the report itself?
There was no knockout blow, but I have to say, the more you read the details, the more damning it is.
The tone suggests the PwC auditors were shocked by what they found.
The council and Mayor Lutfur Rahman are today trying to downplay its importance. They claim “no criminality or fraud” was found and that council processes had already picked up much of the PwC findings.
Pull the other one.
To paraphrase Takki, maybe he and Lutfur may regret they rushed to judgment about the journalists investigating and reporting on Tower Hamlets.
Lutfur, whose hopes of returning to Labour are now dead, may also regret the day he decided to “reform” the way grants were decided at the town hall. One of his early decisions as mayor was to abolish the Grants Panel, an open committee of councillors that published in full the background papers for their decisions, and replace it with a behind-the-scenes committee of mates and officers…with himself having the final say.
I warned at the time this was a mistake and I included it in a lecture to delegates at the Centre for Investigative Journalism in 2012. It was also the area I advised the Panorama team to go hunting when we first met in the summer of last year.
As it happens, the PwC report is a full vindication (not that one was needed) for the Panorama programme.
It’s worth noting this statement today from the BBC and Films of Record, the production company behind the Panorama programme:
We welcome the findings of the report. Panorama’s investigation uncovered serious concerns about the use of public money, and today’s report vindicates the strong journalism we have continued to defend amid inaccurate commentary and misinformation surrounding the programme.
John Ware, Panorama reporter, said: “Even before transmission of Panorama, the Mayor insisted there was no merit in any of the very serious questions I and my colleagues at the BBC and Films of Record raised over his approach to governance. He said our motivation could only be explained by racism and Islamophobia. This was manifestly never the case and today’s report shows our journalism was 100% justified.”
Before we get into the detail of some of the report, let’s get a few other statements out of the way.
From John Biggs:
This is a shameful report that shows a disregard for proper, transparent, accountable decision-making by the current administration. If money has been allocated to preferred organisations or areas of the borough then it follows that others have missed out.
The Mayor cannot dismiss this damning report by independent auditors as an attack by his political opponents as he always has done until now. He now has nowhere to hide and should think very carefully about whether his actions are compatible with remaining Mayor.
Labour group leader Cllr Rachael Saunders:
Cllr Rachael Saunders, Leader of Tower Hamlets Labour Group said:
“Labour demands the highest standards of probity in our elected representatives, and this damning report vindicates the decision to expel Lutfur Rahman from the Labour Party.
Councillors in Tower Hamlets have been fighting unjust grants allocations and opaque, rotten decision making since Lutfur Rahman was thrown out of the Labour Party and stood as an “independent” Mayor.
Earlier this year we sought to start a recruitment exercise for a Chief Executive – we do not currently have one. Lutfur Rahman has chosen not to co operate.
Now PwC has called into question the adequacy of the council’s governance arrangements. It is a cause of sorrow and shame for this great borough that Luftur Rahman as Mayor has taken us to the point of government intervention.
He should consider his position. Tower Hamlets deserves better.
And Lutfur Rahman:
We need to be clear that there was no evidence of fraud or criminal activity identified in the PwC report published today.
All governance issues identified in the PwC report have already been highlighted by our internal processes and are being rectified accordingly.
Given that Tower Hamlets Council is one of the highest performing local authorities in London, and the wider UK for service delivery to our residents, I am surprised at the Secretary of State’s comments today in the House of Commons.
I believe that there is a huge disparity between the detail of PwC’s report and the level of the Secretary of State’s comments. We will be responding to Mr Pickles in due course.
This certainly sounds as if those clever lawyers at Tower Hamlets are urging some kind of legal challenge.
I think they and their masters would be wiser to pipe down, take the medicine, and get on with the business of governance. And prove to the Commissioners who will soon arrive to oversee parts of the authority that they’re semi-competent.
So what’s actually happened?
Eric Pickles was scathing in the House today, and he clearly enjoyed himself. Politicians like taking action, no matter how much they say they don’t.
Based on the PwC findings he’s proposing to appoint three Commissioners to oversee the distribution of grants, the sales of properties and council publicity.
The Commissioners will also oversee the recruitment of three senior positions on a permanent basis: a new chief executive, monitoring officer (bye-bye Meic Sullivan-Gould) and a new chief finance officer.
None of these positions is currently filled on a permanent basis, and that, according to the PwC, has been part of the problem.
In Tower Hamlets it’s easy to become immune to some of the goings-on. We’ve seen them time and again for far too long. But for newcomers, the situation is surely shocking.
So it’s not good enough for the mayor’s supporters to downplay important process failures or to suggest similar discrepancies would be found in a £1m audit of any other local authority.
As The Guardian’s political editor Patrick Wintour reports:
Pickles plans to dispatch three commissioners to administrate grant-giving, property transactions and the administration of future elections in the borough.
The commissioners, who will be answerable to Pickles, will be in place until March 2017 and are tasked with drawing up an action plan to improve governance in the council, including the permanent appointment of three senior council officers including a chief executive.
Pickles said his direct intervention was against everything he believed in, but he said the report, conducted by the accountancy firm PwC, showed the directly elected mayor, Lutfur Rahman, had sown division and should bow his head in shame at the report’s findings. Executive power had been left unchecked and misused, he added.
…Pickles said the report painted “a deeply concerning picture of obfuscation, denial, secrecy the breakdown of democratic scrutiny and a culture of cronyism risking the corrupt spending of public funds”.
He proposed that all Tower Hamlets grant-making, property disposals and publicity functions be sanctioned by the commissioners. In an attempt to reduce the threat of electoral fraud in the 2015 general elections, Pickles also announced that the appointment of electoral registration officer and returning officer are to be exercised by the commissioners.
He added that he wanted the council’s written agreement within 24 hours that they would not appoint an officer or make any grants pending the start of his intervention package.
He said grants had been distributed without rationale, any clear objectives, monitoring, transparency and with officer recommendations systematically overruled.
He pointed out that across mainstream grants by the council, 81% of officer recommendations were rejected, and more than £400,000 was handed out to bodies that failed the minimum criteria to be awarded anything at all. He added that Poplar town hall had been sold against official advice to an individual who had helped the mayor in his electoral bid.
The report is almost 200 pages long and I’ll do a series of write-ups over the coming days.
It is also likely to have cost more than £1m to produce. I had been expecting Eric to announce DCLG would pick up the tab, but he said the burden must fall on Tower Hamlets taxpayers.
That’s surely unjust–and a mistake politically. It gives Lutfur’s team an attack line. The politics of martyrdom plays well in Tower Hamlets, after all.
Would this report, had it been published before the election, persuaded many Lutfur voters to desert him? My instinct is not many, and I do wonder whether Rabina Khan might now be emboldened to go after Rushanara Ali in Bethnal Green and Bow in May.
In fact, there are some Lutfurites pondering the possibility he himself may resign and call a Mayoral by-election to re-establish legitimacy. I doubt he would.
As I said, more on the detail tomorrow.
Trial by Jeory 
The Commissioners will also oversee the recruitment of three senior positions on a permanent basis: a new chief executive, monitoring officer (bye-bye Meic Sullivan-Gould) and a new chief finance officer.
Oh dear. No new Merc for Meic 😦
I hope there is sufficient unpublished ‘meat’ left on the bone for the Old Bill.
They should not get away with it. Lesser mortals would be published. No one should be above the law.
How can anyone truly say their actions were genuinely “serving the public” ?
Curious Cat.
published = punished.
Good bye Lutfur, I hope I never have to experience your corruptio again.
Well I did say it would end up with Commissioners didn’t I?
There are 2 maybe 3 interesting points. The first is the stupidity of what happened over the grants. Being cynical, the trick that was missed was not designing a process that guaranteed the outcome they wanted – having to overrule officer recommendations in such a manner was always going to be messy. It’s politically inept.
The second is the limited nature of the Commissioners’ roll; Eric has made his intervention legally watertight by limiting their role to addressing the failings found by PWC. But but but…this all rather depends on nothing else emerging. Expect more official scrutiny of social services, schools etc.
The third was as Ted said was the tone of the report. There’s a nice map on page 23(?) which is designed to summon up images of the Westminster Porter regime’s actions over housing. The reader is drawn to the conclusion that there is more to be found.
I’m not sure Ted is right about the £1m. Depends on how it’s presented locally by the parties. It’s also too early to tell how this plays out in the Bangladeshi media and on the street. Confidence is the only real currency in politics and once that goes, previously stable regimes tend to crumble very quickly. Ps Suspect the martyr comment is a bit naughty.
No, not meant in that way at all. Political martyrdom. Tone of Lutfur’s campaign.
re. the last point – do watch Pickles performance in Parliament when it pops up on iPlayer http://www.bbc.co.uk/programmes/b04nw24f
Pickles made a point several times of emphasising how the bill for the report would have been very much lower if the Council had co-operated in full from the beginning.
He also invited Rahman to contribute from his own pocket to cover the difference in cost.
Pickles is making it very clear that the final cost is due to the mismanagement of the response – and that this is purely down to Rahman (and maybe his advisers too).
I’m very sure Pickles will be sat on his hands tomorrow morning waiting for Rahman to ignore the instructions on “what happens next” so he out his digit and push the button on “urgency powers”.
The findings of this report comes as no surprise. It has been a long time coming thanks to the despicable Lutfur Rahmans continuos obstruction of this investigation. I undertstabd that Lutfur Rahman and his cronys are celebrating tonight, yes you read correctly, they are celebrating because PWC did not find Lutfur Rahman of Fraud and Theft.
You see this Lutfur Rahman and his cronys have no shame, honour or integrity: the fact that commissioners are being called in to manage/ oversee key aspects running the Council means nothing to these people.
Shame on you Lutfur Rahman, Alibor, Emran, Rabina, Gulam, Ohid – your time is coming. The people of Tower a Hamlets will show you the door.
You see this Lutfur Rahman and his cronys have no shame, honour or integrity
This, I fear, is absolutely spot on. Their drivers are prestige and title; being Mayor is what they aim for, and having money for themselves and the ability to distribute largesse to their acolytes is the desire. Their standing amongst their cronies is not dented by the PWC report – indeed, it is probably enhanced, as they are martyrs to the evil White Man and his Islamophobia.
Sadly, deluded individuals will pop up everywhere and to give them power is a foolish thing. What the report and Pickles’ actions will do is to remove them from power and end the whole sorry charade. While their waste and deceit is shameful, it is a small thing in the bigger picture, and they will (hopefully) go down in history as a warning against unfettered power, political correctness and the danger of pandering to ‘cultural difference’.
They will probably attempt to go down in a blaze of glory. That they go down at all is all that matters.
Tim.
Ok. Just saying. Btw Lutfur Rahman is an anagram of A Harmful Turn.
And worse.
From what I can understand from the report, it seems that a lack of process and transparency was deliberately established in the borough by the mayor, and that this was to enable the diversion of resources to specific (mostly Bangladeshi) organisations. Is that right?
If so why was/is Lutfur doing this? Was it to gain political support and votes via popular organisations? Was it to support one of the most disadvantaged communities in the UK? Was it to progress a faith-driven agenda?
You left out the most common reason why this sort of thing occurs is – i.e. pure self-interest
Without stating the obvious, the report findings are no surprise. However, the tone of the reaction from the government in particular is worrying.
I have always said Lutfur is surrounded by power hungry immoral monkeys who would sell their grandmother to get positions. The deputy mayor who Ted appears to like so much is a classic example switching from Respect to Labour to TH First within a few years, following the crumbs being thrown at him.
Lutfur is also surrounded by shady characters who are happily mascarading as mr fix it, the ‘middle men’ who are getting things ‘done’, unashamedly taking freebies from everyone and anyone cares to show an interest.
The problems are the sleezy middle men. They are so f#@+@% corrupt, they don’t even attempt to hide their disgraceful acts, happily bragging about free access to people, positions and events.
I am angry that a good man has been so badly advised that he is now becoming an embarrassment to the community he has spent his life serving.
I have met the Mayor on a number of occasions and have found him to be a likable character, but my meetings with his deputies, cabinet members and ‘middle men’ have been vomit inducing.
I was hoping for Lutfur to be re-admitted to Labour but this is now is a complete non starter. I would henceforth strongly advise him to accept that he cannot take on the establishment with the corrupt dogs he has around him.
He is now damaging the community he has served for so long. Everything he now does, rightly or wrongly will be seen as a desperate man clinging on to power.
TH is my home, I have lived through the enormous changes that have happened here, from the transformation of schools to the wonderful open spaces. But I am angry the rest of the country only sees the political corruption. The only way to get back to the good things in TH is to change the leadership.
Do the right thing Mr Mayor, for the sake of your community, for the sake of all good things in TH step aside and let the Council continue the good job its doing.
I think one of the really sad aspects of this whole affair is the way that the behaviour of those politicians and “money men” who have been responsible for a whole lot more than “flaws” should reflect on the community whose heritage they share.
Make no mistake, a Council has to be performing really, really badly to have Commissioners appointed.
I’m very clear in my own mind that Rahman and his cronies are not synonymous with all the people living in LBTH who have a Bangladeshi heritage.
I know that view won’t be shared by everybody – it’s the “one bad apple syndrome” – and that’s very, very sad.
Imran,
Your take on things is, as always, interesting and worth reading – thank you. However I can’t agree that the Mayor is a good man surrounded by corrupt advisers. A man in power has to be judged by the men he chooses to advise him, and a poor leader chooses poor advisers. That Rahman is a biased, corrupt and unpleasant man is shown both by what he has done (the PWC report talks about decisions coming ‘from the very top’), by the profligate way he has wasted LBTH money (grants, car, offices), by the way he conducts himself in the council chamber (refusing to answer legitimate questions) and by the biased, corrupt and unpleasant people he chooses to surround himself with.
I agree that Rahman is not an unpleasant man to speak with, but don’t believe that his ‘goodness’ goes any further than a bit of charm which can be turned on at will. He is the front man of a group of nasty people who have forced and connived their way to power on the back of a racist vote from an ethnic minority. That he will end up carrying the can for them all and the others will almost certainly get off scot free is perhaps unfortunate, but I wouldn’t be any more sympathetic to him than that.
Tim.
Tower Hamlets CABINET meeting tomorrow (Wed 5 Nov) at 5.30pm. The mayor must address the PwC report right. Be foolish not to 🙂
I can only think Mayor Rahman has not got a clue what operating under Commissioners is like if he’s celebrating tonight!
Or why, IMO, the PWC report does NOT spell the end of the allegations of fraud and corruption…..
The legal definition of fraud contained within the Fraud Act 2006 includes:
* fraud by false representation;
* fraud by failing to disclose information and
* fraud by abuse of position.
Personally, my guess is that the celebrations are a tad too early.
I’m wondering whether tonight he is contemplating ignoring Pickles’ injunction about the two written undertakings within 24 hours. I note the Cabinet Meeting occurs after the 24 hours is up.
Maybe he’s willing to find out what happens when you ramp up the stakes?
Maybe he wants the notoriety of becoming the first Mayor to trigger Pickles’ use of his urgency powers of direction to safeguard the council and its resources.
Ted – I really think we ought to have a post in which we can discuss the names of possible Commissioners!
How about Theresa Gorman, Shirley Porter and the Countess of Grantham for starters
So do your suggestions mean you don’t like the idea of Commissioners?
Or are you just unable to stop yourself from being totally facetious?
It was a serious point. It’s very clear that others read and are influenced by the contents of this blog – so why not try and see whether we can give them some ideas about people who might make decent Commissioners?
Or at least the type of person who might make a decent Commissioner?
Typical requirements are people who have held Chief Officer roles in the past in a public organisation and who have very good track records in bringing about change and improving services.
For example on this link you can see the people who were the Commissioners at Doncaster towards the end of the period of intervention at that Council. http://www.doncasterrecoveryboard.org.uk/members.asp Obviously this was influenced by the particular problems which precipitated that intervention.
Again Maurice hits the proverbial nail on the head.
How can any of this appalling situation be remotely described as the democratic choice or wishes of local voters ?
I am in favour of a local referendum to kick-out the Mayor and his entire cabinet WITHOUT any golden handshakes.
Curious Cat.
The only example I can think of is Doncaster where Eric Pickles appointed Rob Sykes as a Commissioner in 2012. Rob had been the CEO of Worcestershire County Council and is probably regarded by the Tory Party as “a good egg”. I would hope that Eric appoints a former council executive from somewhere nice and reliable too.
https://www.gov.uk/government/news/rob-sykes-appointed-doncaster-lead-commissioner–2
Love Wapping has done a neat roundup of the coverage of the PWC report and the reactions to it in http://lovewapping.org/2014/11/tower-hamlets-mayor-lutfur-rahman-is-toast/
It’s interesting to see how people choose to headline the story
I note we’ve now got the inevitable comment from Ken Livingstone
http://www.itv.com/news/london/2014-11-05/ken-livingstone-launches-bitter-attack-on-fellow-party-members-in-defence-of-the-controversial-mayor-of-tower-hamlets/
The silence on this blog from the Lutfurittes is deafening! I suspect they have been told to keep schtum, apart from Rabina of course, whose TV appearence put her into the ranks of ‘true politician’ with her inability to answer any question. I would just like to thank Ted, Andrew Gilligan and Love Wapping for the fantastic, and sometimes dangerous job they have done in helping to protect this borough
First time I have seen her lost for words, you can’t defend the
Indefensible. I would also like to give my THANKS to Ted , Andrew, Love Wapping & Robin (ELA now Standard) in working so hard to to keeping this in the public eye and Goverment’s along with Cllr Peter Golds, who over the years has taken do much personal abuse at the hands of the Mayor and his cronies.
As some-one who has lived all their live in this one great place I am very very sad to see this happen.
It’s been ruined by a few who say they care about the community. They only care about lining their own pockets and their followers. People who had old cars scruffy cloths, now swan around in new mercs, suited & booted at our expense.
The decent thing to do would be for Mayor & THF to resign, but that would take a caring about community person !!!! which they have shown not to be , only one part of it
Thank you Mr Eric Pickles from a Tower Hamlets resident
The other deafening silence can be found here http://www.theguardian.com/uk/davehillblog
I wonder why?
Because it takes a real man to admit he is wrong
Did anyone see Rabina Khan’s interview on BBC London news yesterday evening? It was embarrassing to watch. She didn’t remotely answer any questions put to her and just kept spouting no criminality or fraud was found like a parrot. Kept talking over the interviewer as well. I’ve seen some awful political interviews in my time but that was the worst by a long shot and reinforces my dislike of those that run Tower Hamlets.
anyone notice Eric Prick-les’ continuous mispronunciation of Poplar as Popular?
Oh yes, Rabina mocked him for referring yo ‘Popular Town Hall’ then herself called it ‘Poplar Public Hall’!
All v playground stuff. A v odd thing to bring up on national TV.
i suppose prickles et al spending 20 minutes talking about the size of the bust in DCLG in parliament yesterday – is the kind of grown up stuff she should have been aiming for
Wrong again. He joked about a supposed bronze bust of Nick Raynsford in his office. The Speaker then got all weird on him. Lasted 20 seconds or so.
the ‘joke’ went on for two or three questions from memory.
Click to access chan55.pdf
One reference by Pickles to a bust of Nick Raynsford in his office, then Bercow (who hates not being the centre of attention in the Commons rather than a silent referee) makes a fatuous comment that a bust of Pickles would be bigger than one of Raynsford. End of joke.
Exactly – Bercow succeeded in representing himself as a pratt! He should leave humour to the professionals
Will Takki eat humble pie and resign immediately or wait for the Commissioners to sack him as surplus to requirements?
Will the undertaking be given by Rahman to Pickles, not to actively spend money going forward, include any legal costs that could be incurred should Rahman et all try to fight Pickles in court?
For some reason Pickles indicated the issue of East End Life, was separate to the PWC audit of how Tower Hamlets corruptly wastes public money. To my mind they’re exactly the same thing. It doesn’t look like the Commissioners can sack Takki, though they can sack Louise Stamp or John Williams – why not, for the love of God?
Isn’t Takki funded by the raid on the reserves by Rahman?
The way forward on that one will be a review of the budget and a proper management review of performance by the new incumbents – once appointed.
One way or another I suspect Takki will be reviewing his options this weekend – given the very public reference as to his past performance which comes in the form of the PWC report.
I rather suspect Meic Sullivan-Gould might be doing the same thing for the same sort of reasons. He hardly comes out of it with a nice warm glow.
I wonder what sort of line they both will spin to future prospects re clients/employers?
This is the DCLG website which contains all the paperwork relating to the inspection, report and followup
https://www.gov.uk/government/collections/inspection-into-the-governance-of-tower-hamlets-council
It states
“the Secretary of State made an oral statement in the House of Commons on 4 November 2014 in which he proposed:
* the appointment of 3 commissioners until March 2017 to ensure that the council complies with its best value to duty to taxpayers
* that these commissioners would be responsible for grant making
* that the council obtain the agreement of the commissioners before disposing any further public property other than housing
* that the council prepares a plan for how its publicity functions can be properly exercised
* that the commissioners appoint the council’s Electoral Registration Officer and Returning Officer for elections
* and that the council work with the commissioners on a plan to address the weaknesses identified in the PwC report
The next step are:
* 5 November 2014 – deadline for Tower Hamlets council to provide an undertaking to the Secretary of State on grant making and the appointment of statutory officers.
* 18 November 2014 – deadline for Tower Hamlets to make representations to the Secretary of State on PwC report and proposed intervention package.”
Love Wapping has extracted the parliamentary statement by Eric Pickles and subsequent exchanges in the House of Commons ie Q&A and questionable jokey comments by the Speaker from Hansard
http://lovewapping.org/2014/11/statement-house-commons-re-tower-hamlets-council-eric-pickles/
When will the commissioners be sent in to the council? Is it any day now? #studentjournorequest