On the 17 December 2014, my predecessor the then Secretary of State for Communities and Local Government confirmed that, having considered the report of the inspection by PriceWaterhouseCoopers LLP, the London Borough of Tower Hamlets was failing to comply with its best value duty. He therefore concluded that it was both necessary and expedient for him to exercise his intervention powers. A team of commissioners were appointed to exercise functions of the authority in relation to the making of grants, and the appointment of persons to and the removal of persons from the statutory offices of electoral registration officer and returning officer for local elections. The commissioners were also tasked with overseeing an improvement plan of the council covering steps to strengthen the council’s core governance arrangements, publicity, contracting, property disposals to third parties and organisational cultural change.
Almost two years on, a number of challenges remain but there have been areas of significant progress. Following receipt of the council’s 36-monthly update against its best value action plan on 20 September and a report from the commissioners on 11 October, I am today proposing, on the recommendation of the commissioner team, my intention to return certain functions to the London Borough of Tower Hamlets.
After careful consideration of the commissioners’ report, I am satisfied that the council is now able to exercise some of functions identified by the commissioners in compliance with the best value duty, and that the local residents of Tower Hamlets can have confidence that this will be the case. I am therefore considering exercising my powers under section 15 of the Local Government Act 1999 to return to the council functions in relation to grant making, although I consider it necessary for the commissioners to retain an oversight role over how this function is exercised for the remainder of the direction period. Establishing new oversight arrangements in relation to grants will enable the commissioners to advise and scrutinise the council without clouding where ultimate responsibility lies. Finally, I am considering exercising my powers under section 15 of the 1999 Act to end the role the commissioners have held in overseeing the council’s processes and practices for entering into contracts. Returning these functions represents a clear milestone on Tower Hamlets Council’s road to recovery.
The commissioners will provide oversight of the returned functions to ensure that they are exercised in accordance with the best value duty. In addition they will continue to oversee the council’s rigorous programme of improvement in relation to strengthening its core governance arrangements, publicity, property disposals to third parties, organisational cultural change and grants. I am inviting the council to make representations on the proposals, which will be considered as part of my final decision.
I am placing a copy of the documents associated with these announcements in the Library of the House and on my Department’s website: https://www.gov.uk/government/publications/tower-hamlets-intervention-proposed-return-of-grants-function.