Tower Hamlets Council faces the risk of repeated government intervention due to “significant weaknesses” in its operations, according to an external audit.
The report by EY, the council’s auditor, identified ten key issues, including high turnover among senior management and concerns over social housing management. The council is controlled by Luftur Rahman’s Aspire Party.
Chief executive Stephen Halsey said the council welcomed the report and was acting on its recommendations. However, Labour councillor Marc Francis criticised the leadership as “defensive” and called for a “less rose-tinted view of itself”.
EY highlighted that the council had been “slow” in appointing a permanent replacement for its former chief finance officer, who left in April, and that it should have referred itself to the Regulator for Social Housing sooner after taking housing management in-house in 2023. The corporate director for housing disagreed, stating the referral timeframe was not “unreasonable”.
Mr Halsey noted that recruiting a new CFO had been challenging due to a “competitive” employment market. Other areas of concern included procurement and contract management, as well as the conduct of internal investigations.
The audit, covering the 2024-25 financial year, was presented to the council’s audit committee on Wednesday and awarded a C3 grade, the second-lowest of four possible ratings.
EY partner Stephen Reid told councillors many issues had persisted “for many years” and that “the pace of improvement has not matched the scale of the challenge.” He added: “Without urgent and sustained action and clear accountability, the council risks remaining in a cycle of statutory intervention and limited assurance.”
The government had previously sent ministerial envoys to the council in January after inspectors raised concerns over governance and local accountability. Luftur Rahman, who previously served a ban from public office in 2015 for “corrupt and illegal practices,” was re-elected mayor in 2022.
Councillor Francis said audit committee members had already highlighted all the weaknesses noted in the report. Labour councillor Asma Islam questioned the council’s assurances, citing a “systematic, cultural issue that is actually weaving through a lot of what this council does through all of its decision-making.”
