8 April 2014

The Secretary of State for Communities and Local Government, Eric Pickles, has appointed inspectors to look into allegations of governance failure, poor financial management and fraud at the London Borough of Tower Hamlets.

Using new laws that have only just come into effect, the Secretary of State has appointed PricewaterhouseCoopers LLP (PWC) to carry out an inspection of the council. A file is being passed to the Metropolitan Police for consideration.

Following the receipt by Mr Pickles of certain documents, the PWC inspection will look into evidence of the authority’s payment of grants, the transfer of property, spending decisions in relation to publicity, and other contractual processes from 25 October 2010 to the present day.

Mr Pickles said: "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."

The inspectors have a legal right to access all premises and documents belonging to the authority which appear necessary for the purposes of inspection.

Section 12 of the Act provides that the authority to be inspected must pay PWC a reasonable fee for carrying out the inspection. It will report its findings to the Secretary of State by 30 June 2014.