Government Weighs Enhanced Intervention at Tower Hamlets Council
The government is considering escalating its oversight of Tower Hamlets Council, with Housing Secretary Steve Reed warning that additional powers could be granted to ministerial officials. In a statement to parliament on Monday 19th January, Reed expressed ongoing concerns about the East London borough's ability to manage public funds effectively and address governance issues.
Audit Reveals Significant Weaknesses
Reed highlighted a December report from external auditor EY that identified ten significant weaknesses in the council's operations. The most pressing concern cited was an "absence of an effective internal controls environment to safeguard public money." The minister emphasised that these findings occur alongside continuing allegations about leadership, governance, and culture from various stakeholders.
"The council has not understood the severity of its situation," Reed told parliament, adding that despite some progress and constructive engagement with envoys, the authority remains insufficiently mindful of its own position.
Potential Powers Under Consideration
The Labour minister outlined that potential new powers could include government control over:
- Governance structures
- Financial management systems
- Recruitment processes
These measures would build upon existing intervention that began in January 2025, when three ministerial envoys were dispatched following a 2024 inspection. That inspection found insufficient evidence that the council was open, transparent, or valued constructive criticism needed for improvement.
Council Response and Context
Tower Hamlets Council, currently run by the Aspire Party, has welcomed Reed's statement as an opportunity to accelerate improvements. The authority pointed to several achievements:
- Delivering 17 of 18 improvements recommended by the Local Government Association
- Signing off six years' worth of backlogged accounts
- Maintaining groundbreaking services including universal free school meals
- Having 4,590 affordable homes under construction
- Receiving an outstanding Ofsted rating for children's services
A council statement noted: "We welcome the additional support being provided to increase the pace of change which we will deliver while overseeing the running of one of the most demanding places in the UK."
Ongoing Scrutiny and Next Steps
Reed revealed that envoys are planning "deep dives" into several council operations:
- Licensing and planning decisions
- Management of community assets and grants
- Recruitment practices and staff promotions
The minister stressed that any additional powers would be used "only where necessary" and that primary decision-making would remain with the local authority. A Local Government Association review noted that while the council had an "overly-optimistic" view of its progress, it also demonstrated strong financial management with a budget position less precarious than other London boroughs.
Reed has given the council and interested parties until Monday 2nd February to formally respond to the proposals before making a final decision about enhanced intervention measures.
