This Government will do what it takes to fix the foundations of local government. That includes taking prompt and direct action in the small number of councils that are failing their best value duty and not meeting the high standards expected by local residents. In that context, I would like to update the House on the London borough of Tower Hamlets.
On 22 January 2025 Ministers announced a statutory intervention for the London borough of Tower Hamlets, to be in place until 31 March 2028. The intervention was established to secure the council’s compliance with its best value duty following failings identified during a best value inspection in 2024. The statutory support package centred on the appointment of ministerial envoys to act as advisers and oversee improvement work that the council had already begun. The Government were clear that the council would need to drive forward changes at pace and that further action would be taken should it prove necessary. This was reiterated following the envoys’ first progress report in July. One year into the intervention, I welcome the early signs of progress and the council’s constructive engagement with the envoys. However, I am concerned that the council has not understood the severity of its situation or moved beyond planning for improvement into action and impact. These are concerns which have also been raised with the council by the envoys as part of their routine engagement.
I consider that the council is not sufficiently mindful of, or able to assess its own position. This is a view shared by the Local Government Association in its October progress review against the 2023 corporate peer challenge, where it describes the council’s “tendency towards optimism bias”. The council’s external auditor has also observed
“an ongoing reluctance within the organisation to fully acknowledge the scale of the challenge it faces”.
The council will not be able to move forward without a clear understanding of where it is now and how it needs to change.
This is slowing improvement. The council’s auditor has raised concerns about a lack of urgency from the council in response to its statutory recommendations issued in February, as well as a slow response to other significant issues such as the departure of the section 151 officer and investigating serious matters of non-compliance. Where the council has recognised issues and made plans for improvement, such as the developing continuous improvement plan, it is unclear that these are translating into measurable delivery. The Local Government Association also noted in its progress review that the council has “lots of plans” and “a plan for a plan”—but that “consistency, coherence and a strong delivery narrative’” and the “use of evidence and data” are needed to develop and demonstrate the fulfilment of any strategic vision for Tower Hamlets.
I also have material concerns about the council’s financial management and governance, which appears to be deteriorating. The significant weaknesses and statutory recommendations from the external auditor represent areas of serious risk and the auditor highlights the ongoing absence of an effective internal controls environment to safeguard public money. This is in the context of continuing allegations about leadership, governance and culture coming from a wide range of stakeholders. These risk weakening public confidence in the council. While not a best value issue, recent reports of councillors abandoning their constituents to stand overseas will only have further undermined the public perception of members’ commitment to the borough and to the improvement journey. This behaviour demonstrates an appalling lack of respect for residents and should not happen in any local authority.