07 April 2014 by Alexandra Jones
Tower Hamlets London Borough Council is to be investigated following allegations of fraud and governance failures.
Communities Secretary Eric Pickles passed a file detailing financial mismanagement to the Met Police for investigation, which alleges that the borough’s Bangladeshi mayor increased recommended levels of funding for Bengali charities.
Figures exposed by the BBC’s Panorama programme suggest that Major Lutfer Rahman increased the funding for these particular groups from £1.5 million to £3.6 million in order to secure votes among the Bengali community.
Aditors PricewaterhouseCoopers are currently investigating the council at its town hall premises and are taking a closer look at how public grants to community groups have been awarded.
Rahman denies the allegations, accusing the BBC of ‘racial prejudice’.
Pickles said: ‘It is a matter of public record that I have long been concerned about a worrying pattern of divisive community politics and alleged mismanagement of public money by the mayoral administration in Tower Hamlets.
‘Following the receipt of a number of documents, I am now taking legal steps, in the public interest, to appoint inspectors to look into the allegations in respect of Tower Hamlets.
‘I hope this sends a strong signal that robust processes are in place to investigate allegations of failures in financial management and governance in local government, under the new regime introduced by the Local Audit and Accountability Act which replaces the Audit Commission.
‘This central action is not undertaken lightly, but localism requires local transparency, scrutiny and accountability, and these vital checks and balances must be upheld.’