Answering the attacks on Lutfur Rahman’s administration

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Stephen Beckett, expelled from Labour for supporting internal party democracy, responds to the attacks on independent Mayor of Tower Hamlets Lutfur Rahman

On 4th November 2014 Eric Pickles, the Tory Communities Secretary, made a statement in the House of Commons regarding Tower Hamlets. His com­ments, using parliamentary privilege, went beyond the findings of the Price Waterhouse Cooper’s (PwC) best value report that was published at the same time. The report, based upon an extend­ed six month intensive audit, found no evidence of fraud or criminality – a bit­ter disappointment to those local politi­cians who have conspired to degrade Mayor Lutfur Rahman’s legitimate democratic mandate.

An episode of Panorama, “The Mayor and Your Money”, was broadcast on 31st March, just a few weeks before the local elections in May. Local Labour and Tory politicians collaborated with the programme-makers hoping it would be able to inflict a fatal blow to Mayor Rahman’s re-election campaign. To strengthen the blow, Eric Pickles commissioned the PwC audit (at a cost of £1.3m to the Council’s already hard hit budget). The blow was the reverse of fatal: Mayor Rahman was re-elected.

In Parliament Eric Pickles conjured up an image of Tower Hamlets Mayor Lutfur Rahman presiding over corrup­tion and pursuing divisive community politics (it was disappointing that Labour MPs joined in). This is not the Tower Hamlets I know. The PwC report has raised questions which deserve to be answered, so let’s get stuck in with some facts.

• Has the Mayor or have councillors broken the law?

PwC did not find evidence of fraud or criminality. Scotland Yard said the same on 10th April 2014 after the Panorama programme made similar claims: “There is no credible evidence of crimi­nality within the files to provide reason­able grounds to suspect that fraud or any other offence has been committed.”

• What about the ongoing police investigations into some voluntary organisations?

The Daily Telegraph‘s Andrew Gilligan says the Mayor’s claim of no evidence of criminality is disingenuous. He cites p.33, paragraph 2.57, which states: “Evidence of possible fraudulent payments has been identified … in connection with nine third sector organisa­tions … that received [council] monies under the [Youth Services] programme. By agreement with the police, we have not examined these matters in detail.”

This refers to nine voluntary youth organisations, which are currently being investigated by the police for possible fraud committed by members of staff of those organisations. The police investi­gation is into those organisations, not Tower Hamlets Council. The grants received by all nine organisations were decisions made by officers, not by the Mayor or Members. When concerns were reported it was the Mayor and Council that contacted the police.

• Was Poplar Town Hall sold off on the cheap to a friend of the Mayor’s?

PwC found nothing wrong with the val­uation of Poplar Town Hall and the price it was sold for. Poplar Town Hall was not sold to a friend of the Mayor. The successful bidder won the contract through the normal process which is managed by council officers. Out of the 185 property transactions carried out by the Council the report raised concerns on only 3 property transactions.

• Did all the grant money go to Bangladeshi organisations?

PwC found no bias in the distribution of grants. Most grants went to organisa­tions in the west of the borough but, as the report said, most applications came from organisations in the west of the borough. Most organisations that were funded provide services to residents across the whole of the borough.

• Why did the Mayor overrule some officer recommendations on grants?

The Mayor and councillors are not elected to simply be “yes” people to unelected officials. In those instances where their knowledge of the local com­munity led them to believe officers were not seeing the full picture, they acted fully within their rights to overrule.

• Why has the council failed to make permanent appointment to the statu­tory officer positions?

Appointments to senior officer posts are not devolved powers: the councillors have retained this responsibility. Tory and Labour councillors have consistently joined together to stifle progress.

• Are there problems of transparency and governance in Tower Hamlets?

PwC state they “do not ascribe any par­ticular failure to any particular individual.” Their report does find that that in some instances reasons for decisions and changes to processes are not docu­mented and therefore there are gover­nance issues. The Mayor and Council take these on board and agree that improvements should be made. The Council does accept that the grants process can be improved and is working to address some of the gaps identified in the report.

Tower Hamlets Council employs over 11,000 workers. Weaknesses would be found in any large public organisation subject to an intensive, politically motivated, six month inspec­tion involving scrutiny of over 10 mil­lion written pieces of evidence.

The PwC report into the Council found no evidence of fraud or corrup­tion, made no reference to divisive com­munity politics and refused to ascribe “any particular failure to any particular individual.” It did find some areas for improve­ment in governance and transparency. The Administration welcomes the challenge of constant improvement. Can the Coalition government say the same?

Eric Pickles’ com­ments, made under par­liamentary privilege, mask something uglier in a bid to outflank UKIP. Britain’s first elected Mayor from a Muslim background is a handy scapegoat for barely coded politics on race. Anyone doubting Tower Hamlets is get­ting unduly close scruti­ny should read the lati­tude shown to Waltham Forest. [See Nick Tiratsoo’s article, “Waltham Forest’s missing millions”, in the current issue of Labour Briefing.]

Any progressive Administration would be proud of what the Tower Hamlets Mayor and Council have achieved. He opposes the Tories’ austerity agenda. Without espousing gesture poli­tics, he has done much to mitigate the effects of Tory cuts including building social housing at target rents; not evict­ing anyone who can’t pay the bedroom tax; fully funding Council Tax benefit and running his own grant schemes for post 16 and higher education students.

Pickles may not like the electors’ choice – ­what is wrong with the mayoral system in Tower Hamlets is “the people that are chosen”, he said in Parliament ­– but Mayor Rahman has been voted in twice because people are sick of a political establish­ment seen as aloof and indifferent.

• The full PwC report is available at:

This article is reproduced from the December 2014/January 2015 issue of Labour Briefing. For an annual subscription to the magazine send a cheque for £20, made out to Labour Briefing Co-operative Ltd, to 7 Malam Gardens, London E14 0TR