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Posts Tagged ‘pwc report’

After highlighting Rabina Khan’s live BBC London interview on this blog yesterday, it’s only fair to point to Lutfur Rahman’s rare live TV outing last night.

He granted BBC London political correspondent Karl Mercer some three minutes at 6.45pm. That’s way too short a time to interrogate him on matters of detail….and that’s the advantage the interviewee gains doing live TV.

The clip, which is available until 6.30pm, can be seen at 18minutes in here.

Karl suggests to him that weaknesses found by PwC included £407,000 of grant money given to organisations that failed to make the minimum requirements in application assessment process. Karl also suggests that some £100k was given to Bengali/Somali groups which didn’t even apply for grants.

Lutfur, in combative mode, replies:

Absolute rubbish. That’s not the case. If someone didn’t apply for grants they would not have got a penny. The assessment that this council, our officers gave awards to organisations that didn’t apply is absolutely wrong and it’s absolutely misleading, so let me correct that for the record.

People have to apply in the first place and a [r]/vigorous assessment process which is overseen by officers then is awarded the grants.

And on it goes with more defences of council processes. He said the applications went through proper processes, “overseen by officers” and via appeals channels to his cabinet.

As it happens, his interview came immediately after his monthly cabinet meeting in the room next door. It was the first one I’d attended in a while and while they always were, even under Labour, something of a rubber-stamping exercise I was struck by the lack of interrogation and the intellectual timidity of his members.

Of those cabinet members, who get paid £12,000 extra a year for their roles, only former deputy mayor Cllr Ohid Ahmed dared to ask a question of a senior officer. Good for him.

The only other councillor to ask a question was Lutfur’s old ally, Marc Francis of Labour, who welcomed a new council housing strategy but wanted reassurances on affordable homes numbers.

I wonder how happy these cabinet members are and what powers, if any, they genuinely have. Are they there for show…and the status and money of course?

This all comes down to governance. Is too much power invested in Lutfur and his unelected advisors and mayoral office?

Does that inner circle fully respect council processes?

In the area of grants, at least, PwC found that not to be the case.

I am going to write more detailed analyses of this report, but for the time being here’s a selection from the executive summary on mainstream grants (MSG) The last paragraph is revealing…or not, as the case may be.

(By the way, I think the BBC were confused in their assertion that some grants were given to groups which did not even apply. I think they were probably referring to 32 cases where the mayor intervened directly to increase their officer-recommended grant without the group itself actually asking/appealing for a review. See para 2.35 and 2.36 below.)

Development of MSG grant proposals

2.30 Officers from the relevant directorates evaluated grant applications in accordance with agreed criteria and scored each application on a consistent basis. Based on these evaluations, which were subject to moderation through discussion amongst officers and a degree of adjustment to reflect their analysis of gaps in expected outputs or outcomes as defined in MSG grant Service Specification documents, officers put forward a set of award recommendations in early August 2012. This was later than originally envisaged, owing to the higher than expected number of grant applications, which considerably exceeded that experienced in the previous MSG round (2009-2012). The August 2012 officer recommendations were for awards to 255 organisations totalling some £8.2 million across eleven different funding streams (covering a 30-month period, equating to £7.4 million pro-rated for 27 months).

2.31 During August and September of 2012, an iterative process took place, whereby one Member in particular who sat on the CGPB [Corporate Grants Board] intervened to make significant changes to the officer recommendations prior to their being presented to the CGPB. This has been explained to us as the application of “local knowledge” to achieve a wider spread of grant monies across more organisations, as well as seeking better to address key areas of need and promote a thriving third sector across the Borough (we have also been told that there were “errors” in the officer recommendations, albeit that the nature of these has not been specified). Taken together, these aims would in principle be unobjectionable in themselves, however the process by which they were pursued lacks transparency and is inadequately documented. Further, without a record of what local knowledge was applied it is not clear how this is linked to the assessment criteria for the MSG 2012-2015 awards.

2.32 There is evidence that officers were concerned as to what the basis for the proposed changes were and, indeed, evidence of a concern that such changes might reduce the effectiveness of the use of grants in terms of securing viable services from third sector organisations. Concerns of a similar nature were also raised by the chairman of the Tower Hamlets CVS, the sole external member of the CGPB. There was also an acknowledgement by the senior in-house legal adviser considering this issue that the changes were significant and that care would need to be taken to ensure that the process and its outcome could be justified.

2.33 The result of this process was a new set of recommendations which were significantly different from those made in August. Out of a total of 431 initial applications, the updated recommendation was different in 347 cases (81% by number). This included 15 applicants who had not met the minimum eligibility criteria even to undergo evaluation and scoring by officers. These applicants were recommended to receive aggregate awards of £243,500. A further 18 applicants were recommended who had, on the basis of officer evaluation, failed to reach the agreed minimum score to qualify to receive a grant and had therefore not been recommended by officers for an award. These applicants were recommended to receive, in total, awards of £407,700.

2.34 We note one example of Member input into the decision making of MSG 2012-2015 awards whereby Members recommended £40,000 of funding to an organisation despite identified manipulation in the documents provided to support the applications of the organisation and an Internal Audit report assigning nil assurance to the organisation’s control environment in September 2012. This organisation was not scored by officers as it failed to meet eligibility criteria. In addition to this we note that three other applications to the same funding stream, were turned down for funding with the following comment “this was a reasonably good scoring project, however there was very high demand for funds from higher rated proposals which meant that this project was not able to be supported”. Given the scarce resources available and the apparently good quality capacity already in place it is not clear how seeking to build capacity within this organisation was the best use of resources within this funding stream.

2.35 The new recommendations were put forward at a Cabinet meeting (open to the public) on 3 October 2012. At this meeting, the Mayor indicated that he was minded to accept the recommendations, however he was announcing a seven-day review period, during which grant applicants could ask to have their proposed award (or lack of award) reconsidered. In the event, some 177 applicants asked for their award to be reviewed. Of these, 76 were awarded an increased grant. In addition, a further 32 applicants received increases although we have not seen evidence that they had in fact asked for a review of their award.

Degree of involvement of the Mayor

2.36 In interview, the Mayor told us that he had not been involved in the detail of awards, although he had kept abreast of things generally through occasional high level discussions with one Member in particular. This is somewhat at odds with an email dated 8 August 2012, shortly after the initial circulation of the original officer recommendations, which stated that “the Mayor has requested a vastly expanded Appendix 1”.We also note that a press statement dated 1 April 2014 put out by the Mayor’s office in response to the BBC Panorama programme included an assertion to the effect that the Mayor, acting within his powers, had intervened in 32 specific cases (details of some of which were also given). We consider it likely that the 32 cases referred to in the press statement concern largely the same applicants as the 32 applicants, included in the final award, who received an increase without requesting that their awards be reviewed. In response to our request for clarification of whether or not the Mayor intervened in the manner suggested in the press statement, neither the Mayor’s office nor the Authority has been able to shed any further light on the matter.

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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.

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It’s going to be a busy day for me today so apologies for being brief.

The PwC report is here.

I’m reserving judgment on exactly how “damning” it is. On a first glance there are serious criticisms on council process failures. These could amount, in series, to a damning verdict.

Eric Pickles is due to make a statement at 12.30pm but I suspect a new chief executive is inevitable. He’ll also possibly announce he’s appointing commissioners to take over the grants system and to oversee the sale of council properties.

PwC have certainly found governance failures.

They also hint that too much executive power has been given to one individual regarding the mayoral system. Tower Hamlets may be the extreme example which demonstrates a broader need for improvement in the system.

Politics in Tower Hamlets has been dysfunctional for many years. The arrival of Respect in 2005 blew apart Labour’s monopoly in the borough and that was the catalyst for instability.

The resulting revolving door of councillor defections and swapping of Labour group leaders created a factionalism that even highly regarded senior council officers found difficult to deal with.

We then had the worries over the influence of the Islamic Forum of Europe and its links with certain councillors. Then we had the Respect-led petition which paved the way for the directly elected mayoral system.

And then the Labour party imploded with the row over the selection of Lutfur Rahman.

So Lutfur became a powerful executive mayor as an independent without the checks and balances of a party group. He hired a brand new mayoral office, and that created its own power plays at officer level in the council.

On top of that, he was an angry man under extreme pressure, with one fundamental aim: to get re-elected.

I think he was then badly advised. He took direct control of grants and was surrounded by fawning bidders from external groups.

The dysfunctional politics also meant that when Kevan Collins resigned as council chief executive in 2011, we had an almighty bun fight over his successor.

In short, the successor never happened.

And we’re here today.

Note that East End Life was not examined by PwC and nor were nine examples found by the council of possible fraud in the delivery of youth service grants.

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Exactly seven months after Eric Pickles ordered Government-appointed inspectors to examine the books at Tower Hamlets council, the Communities Secretary will tomorrow publish their findings.

The report from PricewaterhouseCoopers will be published on the DCLG website at 9.30am, just as a written ministerial statement is made in the Commons.

Three hours later, the minister himself will make an oral statement in the chamber outlining the Government’s response.

Only a handful of people know what’s in the report: ie at PwC and at the very top of DCLG.

At this time of writing (about 8.20pm Monday), even Mayor Lutfur Rahman does not know what’s in it. It may be that the report has been sent to the council’s Head of Paid Service, Stephen Halsey, but even that’s not clear. Presumably, Mr Halsey would have to brief Lutfur if he had received it.

So anyone claiming they’ve heard this or that about the report’s findings is quite likely spreading unfounded rumours.

However, it would be a surprise to almost everyone if Eric did not announce he was imposing a new chief executive on the council…at the very least.

Clearly, whether he goes further depends on what has been found.

Lutfur’s camp believe, from the various questions they’ve had to answer and check during the past seven months, that any direct Government intervention, eg the appointment of Commissioners to run procurement and grants, would be vulnerable to a legal challenge.

So we could see more taxpayers’ money spent on legal bills….on top of the cash currently going on lawyers for the judicial review of Eric’s original decision, a hearing due at the High Court on November 14.

When Eric made his initial announcement on April 4 (four days after the Panorama programme), the council “welcomed” the chance to clear its name.

Here’s that statement:

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.

Well, you could say they had a funny way of showing it. There’s a feeling in Whitehall that the council deliberately dragged its heels over supplying information to the auditors.

As I’ve noted before, the inspection has been trying to determine whether the council has achieved “best value” with the public’s money. Handing it to lawyers to try and block that process didn’t go down too well. It fed a narrative.

Has there been any fraud? I have no idea. Certainly, Panorama never made that allegation….although their team did find evidence of a fraud linked to the Brady Youth Forum, as mentioned here.

If the PwC report hasn’t found fraud, expect the Lutfur line to be “I told you so”.

But I’d be astonished if there isn’t severe criticism of the council tomorrow.

A minister like Eric Pickles just doesn’t make oral statements to the Commons so he can have egg chucked in his face.

So over to you, then, Eric, me old chum.

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This is a guest post by Andy Erlam, one of the four Tower Hamlets election petitioners (along with Debbie Simone, Azmal Hussain and Angela Moffat). It’s a response to my blog post yesterday, here.

It is kind of Ted Jeory to give some more uninvited advice about how we best manage the Election Petition case.  However, we are sure Commissioner Mawrey QC does not need his instructions interpreted by Ted.

The Commissioner has announced that he may allow statements to be included in the case without the names and addresses being revealed to Lutfur Rahman or John Williams or their legal teams. This is a significant development which we had a duty to inform the press and the public of.

There are some other inaccuracies in Ted’s account, which is not surprising as he did not attend the Press Conference.

Who did attend, we are told, was a spy for Lutfur Rahman, an uninvited solicitor, a trespasser in fact, so Ted may wish to check with him/her.

The comment made by Janet Digby-Baker OBE was slightly misquoted. The case she was referring to was another case and she made it to illustrate how nasty intimidation can become.

Of course, the intimidation and the threatening of witnesses is itself an extremely serious criminal offence, punishable by imprisonment on conviction.

This is the worst way to show contempt for the court and we will not shy away from reporting each and every reported incident to both the court and to the police and carefully monitor progress of any investigation. The police have not yet covered themselves in glory in this case, but we live in hope.

We will respect the court but we expect our opponents to respect the people.

The Scrutiny of the entire mayor election vote starts in the High Court on Monday morning November 3 and as it takes place in the Royal Court of Justice, we can expect that it will be a sedate affair with special care taken towards transparency and due process.

We leave it to your readers to decide whether this will be better than the Tower Hamlets election count of May 23-27.

Instead of sniping ‎from the sidelines, Ted should get back to some quality investigative journalism:

Who is financing Lutfur’s hugely expensive legal team?

Are we certain the Tower Hamlets ratepayer isn’t somehow financing Lutfur’s legal team?

What does the PwC report show and recommend?

Surely a leak from PwC can be organised? I am reliably informed that LBTH has tried to “lean” on PwC which if true is surely another gross miscalculation.

‎Ted predicted wrongly that we would be laughed out of court at the initial High Court hearing in July.

In fact, the unwise attempt to have the case struck-out supported by 10 QCs and solicitors ‎(yes 10 and some paid for by the tax payer) against our brilliant barrister, Francis Hoar, was thrown out of court.

A further High Court Challenge over the PwC report, also paid for by the Tower Hamlets taxpayer, was later rejected by another judge as “hopeless”.

That has not deterred the mayor from seeking another expensive oral hearing which will take place on November 14.

Ted may be impressed by famous QCs but we will not be intimidated. Taking on hugely expensive lawyers is not a sign of strength, but of weakness.

We are not frightened of anyone.

Comment by Ted Jeory: I’m a bit puzzled that a petitioner who is going to court over allegations of impropriety is urging someone in PwC to leak an official report. I think Andy is right to ask who is funding Lutfur’s legal team; maybe he should set down a marker and fully disclose who is funding his own team.

I maintain that the petitioners are brave…but they’d perhaps be wiser to do their talking in the courtroom (as I think Richard Mawrey QC would prefer).

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I keep being asked what’s the latest with the PwC report that Eric Pickles was due to announce in the Commons last week.

The answer is that it’s all a bit unclear.

I’m told Tower Hamlets council, with a certain “coup de theatre“, dumped a whole load of new documents on the PwC auditors at the very last minute of the report’s preparation (and five months after the investigation started).

This has caused something of a delay.

Parallel to this is another potentially interesting little conundrum. At the end of August, High Court Judge Sir Kenneth Parker declined an application from the council for a judicial review of the decision to send in the auditors in the first place.

In his written ruling, he used the word “hopeless” to describe one of the council’s arguments. He firmly rejected the other grounds as well. His ruling is here:

3 - Tower Hamlets Judicial Review Judgement

3a - Tower Hamlets Judicial Review Judgement

However, as The Wharf reported in September, the council was undeterred and applied for an oral hearing before another judge.

This has been granted and a date has been fixed for next month.

Here’s the question I’ve asked…Surely it would be illogical to publish the report ahead of that judicial review? If the court rules in favour of the council, ie it rules it was unlawful to send in PwC, then surely that would mean the report itself was unlawful in some way?

Put it another way: what would be the point of the JR hearing if by that time Eric Pickles had already published the report? Would that hearing then be obsolete in practical terms? If the report was so damning that Eric determined intervention was necessary, could that intervention then take place if the JR rules his original decision was unlawful.

He’d be in a bit of a pickle, and embarrassed politically.

Wouldn’t the council’s lawyers want to apply for an injunction on publication of the report prior to the JR hearing? Camp Lutfur Rahman is keeping quiet on the matter.

Sources in Eric’s Department for Communities and Local Government, meanwhile, say the two issues are separate. But I do wonder whether they might wait until after the JR.

Maybe one of the learned readers out there can help?

As for the Election Court petition, that is still going ahead. I’m being told by town hall sources it’s likely to happen in January, although the venue is still unconfirmed. It’s quite possible it won’t take place at the town hall in Mulberry Place after all, but at another building that can accommodate an accompanying media and public circus.

York Hall, the famous boxing venue in Bethnal Green, might be one (very appropriate) option.

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My apologies for being relatively quiet over the past few weeks. Normal service will resume pretty soon.

In the meantime, here’s an update on the PwC report.

Earlier this week, Jim Fitzpatrick asked Eric Pickles in the Commons for an update.

Jim Fitzpatrick: The Secretary of State commissioned PricewaterhouseCoopers to conduct an examination of the finances of Tower Hamlets council. Tower Hamlets council will be paying for that audit. Will the Secretary of State update us on how long it will be before the auditors report?

Eric Pickles: We are talking in terms of a matter of days. I understand that the consultants have finished their report, but the facts will have to be checked with Tower Hamlets, and only when that process has been completed will I be briefed on it. I shall then have to make a “minded” statement, because Tower Hamlets will obviously have the right to respond before I make a final statement to the House.

Actually, Eric “misspoke” slightly when he said a “matter of days”.

The Department for Communities and Local Government has just issued a statement detailing the next steps.

As the council’s head of paid service, Steve Halsey, announced to staff this week, PwC’s team of up to 25 inspectors have now “withdrawn” from the town hall.

Their fieldwork was completed on September 8. They are now into the fact-checking phase. This means extracts of the facts contained in PwC’s draft report are being sent to interviewees (ie Mayor Lutfur Rahman and officers etc) for fact-checking.

It is expected this process will take 10 working days. Responses and comments will have to be returned to PwC by September 25.

The report might then have to be amended; while this phase has in theory no time limits, it’s unlikely to take more than two weeks. The report will then be sent to both Eric Pickles and the council.

Pickles will then consider what action, if any, he will take. He’ll probably make his decision within 24 hours before issuing a statement to the Commons. The PwC report will also be published at that point.

It is expected this statement and publication will take place in the week beginning October 13.

What actions might Eric take? Well, certain “direct functions” might be removed from the council and instead placed under the direct control of the Secretary of State, or independent commissioners appointed by him.

In other words, special measures. This might well be the grants or procurement processes, for example…but that’s purely my speculation.

Many in Tower Hamlets, including within Lutfur’s camp, believe Eric will at least impose a new council chief executive and relieve the clearly overworked Stephen Halsey from his head of paid services duties.

Camp Lutfur, and some senior Labour figures, also doubt whether the PwC report will, beyond installing a new chief executive role, contain anything more than a few rapped knuckles over processes.

This language tends to downplay the importance of following “processes” in local government spending decisions…

Jim Fitzpatrick and Lutfur’s team are also openly worried and critical of the potential £1million cost of the PwC report. As things currently stand, those costs will be charged directly to Tower Hamlets taxpayers.

It is inconceivable this will happen in reality. If the report finds governance failures, it will surely be sensible politically for Eric to announce that Whitehall will pick up the tab: why should innocent Tower Hamlets taxpayers face the double-whammy of suffering poor governance AND the cost of detecting them?

Meanwhile, Lutfur seems to be carrying on oblivious. Over last few weeks he’s been concerned with the important matter of choosing his next chauffeured car.

Nine days ago, this Volvo V60 Estate D6 AWD Plug-in Hybrid 5dr (Price £49,975) was seen in his town hall parking spot.

Mayor car[1]

A Toyota Prius hybrid (as I predicted here in May) has also been seen in that space.

A council spokesman said:

We are currently exploring  a range of transport options to assist the Mayor in his duties. As part of this process the more efficient and environmentally-friendly hybrid cars are being considered as a potential option.  

A car is necessary because the Mayor seeks to maximise his accessibility to the electorate by going to them rather than requiring them to come to the Town Hall. 

Most recently the Mayor trialled a more environmentally-friendly Volvo hybrid D6 for three days, at zero cost to the taxpayer.

But when I asked what other cars he’d tried out, Takki Sulaiman’s press office told me to submit a Freedom of Information request.

Which says something about attitudes towards openness and what they consider the “best value” for taxpayers’ money.

PS.. Sadly, I wasn’t at last night’s full council meeting, which didn’t fail to live down to its usual standards. Lutfur and his Tower Hamlets First party staged a walkout rather than debate why the council has spent money applying for a judicial review on DCLG’s decision to send in PwC. All councillors were apparently told by interim monitoring officer Meic Sullivan-Gould they risked jail should they breach the Contempt of Court Act in debating the issue.

The East London Advertiser’s Mike Brooke has the full story.

And here is the full text of DCLG’s statement today:

Update 11 September 2014

Inspection of the London Borough of Tower Hamlets: concluding stages

In April inspectors from PricewaterhouseCoopers were asked to look into serious allegations of governance failure, poor financial management and fraud.

PwC have now substantially completed their inspection fieldwork and are in the process of producing their report.

PwC has today (Thursday 11 September) sent certain factual information, which they may include in their full report, to Tower Hamlets Council for fact-checking.

Where individuals have given information in interviews which may be referred to in the report, PwC will also be sending relevant information to that individual by the end of the week.

The council and individuals receiving this information will have 10 working days to comment to PwC on its factual accuracy.

All this information has been provided by PwC on a strictly confidential basis solely for the purpose of this fact-checking exercise.

From Thursday 25 September PwC will be considering all the comments received, and finalising their inspection report, which must include any matters identified where the council has not complied with its statutory best value duty.

As required by statute once PwC has finalised its full report, it will then send a copy of that report to the Secretary of State and to Tower Hamlets Council.

Once the Secretary of State has received the report, he will give it careful consideration. Subsequently, in due course, he intends to exercise his statutory power to publish the report, and to make any statement he considers appropriate to Parliament.

If the Secretary of State is satisfied that Tower Hamlets Council is failing to comply with its best value duty, he may exercise his powers of statutory intervention. Statutory intervention may take a number of forms including directing a council to take any action that the Secretary of State considers necessary or expedient to secure its compliance with the best value duty, or directing that certain parts of the council’s functions be undertaken by the Secretary of State or by a person – for example a commissioner – appointed by him for that purpose.

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