Tower Hamlets: Lutfur Rahman's council spending plans cause concern

The controversial mayor of Tower Hamlets, Lutfur Rahman, has unveiled spending plans that would use millions of pounds of council savings to achieve his manifesto promises.

Mr Rahman returned to lead the council last year, seven years after he was removed by an election court for "corrupt and illegal practices".

There is "worry" about how the council is being run, a financial expert says.

Mr Rahman has dismissed concerns about his plans as "completely unfounded".

Councillors were made aware last week that the east London authority's chief executive, Will Tuckley, was to leave "by mutual consent".

The chief executive of the Chartered Institute for Public Finance (CIPFA), Rob Whiteman, responded to news of Mr Tuckley's departure by tweeting: "Will Tuckley deserves the sector's thanks. Let's not have one of those moments when people recognise too late that there are problems.

"@Cipfa has concerns Tower Hamlets is going wrong again and will need intervention."

Mr Whiteman was referring to the government's decision to send in commissioners to run the council in 2015 and help restore functionality after Mr Rahman was removed from his post.

The mayor's team says the chief executive's departure is amicable and CIPFA's comments are "completely unfounded".

Mr Rahman made a return to local government last May with his Aspire party, defeating the sitting mayor, Labour's John Biggs, with 55% of the vote after the second rote of voting.

Candidates from Aspire, which was set up in 2018, won 24 of the available 45 seats.

Mr Rahman previously held the role of mayor from October 2010 until April 2015, when he was removed from the mayoralty and suspended from public office by an election court that found there had been "corrupt and illegal practices" under his watch.

The court found that grants had been allocated inappropriately to some organisations, canvassers on his behalf had been paid and he had brought "undue spiritual influence" to bear on the Muslim voters who backed him.

Last week, the King and Queen Consort visited the borough, taking a trip to Brick Lane. The council's speaker and deputy mayor were present, but Mr Rahman did not attend.

The mayor's spokesman said he had been too busy with meetings and supervising the council's move into new offices to be there.

Since becoming mayor again, Mr Rahman has sought to implement some eye-catching manifesto promises, including spending £3m on universal free meals in secondary schools, and a similar amount on more community wardens and enforcement officers.

Other commitments include the restoration of the education maintenance allowance (EMA) to keep pupils on at college or secondary school, and bursaries to incentivise students to go to university.

Mr Rahman's spokesman said: "The mayor promised universal programmes targeted at the most needy during a cost-of-living crisis. People voted for a mayor who believes passionately in improving their life chances."

Leisure services are being brought back in house at a cost of nearly £2m, and more than £6m is being spent on expanding the youth service while also dispensing with external providers.

This is controversial because there was an investigation into the use of funds in the in-house youth service during Mr Rahman's previous stint as mayor.

Overall, it will mean recruiting more than 200 extra staff when there is currently no long-term funding for them.

The mayor's opponents say it's risky and unsustainable, and have pointed to warnings from within the council about whether these and other measures are affordable in the long-term.

In order to achieve his manifesto promises, Mr Rahman has withdrawn £23m of the council's reserves in one go to spend next year.

Tower Hamlets interim chief finance officer Kevin Bartle, who has since left his position, described the £23m figure as "a very significant sum from one-off reserves" to use to balance a budget.

If the rate of spending continued, it would "require further significant drawdowns from reserves in future years, which is clearly unsustainable as the council's useable reserves would be exhausted in the medium term", he said.

The borough's single Conservative councillor, Peter Golds, said: "He is spending a great deal of money to deliver on his manifesto pledges, but will the funding stream still be there in a couple of years' time?"

Labour's leader on the council Sirajul Islam told the BBC: "We think this year he can balance the budget but we have some worries about what comes after.

"As council officers have pointed out, the concern is where the money is coming from in subsequent years, and whether it puts the council in jeopardy."

Mr Rahman accepts the forecasts showing that he needs to find spending cuts or savings of around £30m next year, but is undaunted.

"We are committed to making savings in the coming years but we haven't drilled deep into that yet," his spokesman said.

"We have approached this budget with complete rigour. Our economic ethos is 'invest to save'."

Budget documents show the mayor's private office is nearly trebling in size to 30 staff, including an additional nine consultants employed on a freelance basis at a rate of £58,000 each a year.

Mr Rahman's team said that the extra caseworkers were "the best possible use of the money available", adding: "We are only interested in delivering for people, and particularly the most desperate in the borough.

"Consultants have been brought in so the mayor can better realise his strategic goals."

However, the leader of the Labour opposition on the council Mr Islam described the spending as a misuse of public money.

"Labour will always be supportive of proposals that look to help our most vulnerable residents in the midst of this devastating cost-of-living crisis, therefore it is incredible that Aspire's priority is to blow £5m of taxpayers' money on a massive expansion of the mayor's office.

"If that is going to be spent, it must be focused towards offering greater help to those who are struggling to heat their homes this winter or put food on their table."

There's also a continuing row over Rahman's opposition to cycle lanes and low traffic neighbourhoods (LTNs), which he promised to get rid of, claiming they have made driving in the area harder and caused delays to buses.

A consultation last summer found that more residents than not, albeit by a narrow margin, wanted to keep the traffic restrictions in the two zones in Bethnal Green and Brick Lane.

The data that was gathered suggested traffic, congestion and air quality had improved.

But last month the mayor announced a second consultation on the proposals.

Campaigners say the consultation document contains "misleading" claims that removing cycle lanes would still mean there would be health and environmental benefits, because the council would install benches, plants and dropdown kerbs.

Jane Harris from the group Save our Safer Streets says the mayor has ignored the first consultation, hoping to get his way through a second one.

"People feel deeply frustrated that they weren't listened to when they told the council what they thought of these schemes five months ago.

"This seems ironic given Lutfur Rahman has said he wants to be a listening mayor. People who are good at listening don't need to be told something twice.

"They are putting the pressure on to get the result they want rather than listening to what people want."

The mayor's office rejects this, countering that a further consultation has been arranged because the first one was "almost neck and neck" in responses, and council officers recommended they do further assessments and analysis.

"Consultations do not supersede the democratic power of an election, in which it was very clear the mayor won a strong mandate which included wanting to review the LTNs."

Politics in Tower Hamlets has long been a complex picture where identity, race and religion intersect with factionalism within Labour and on the left.

But Mr Rahman's team dismisses the notion that another period of turbulence may be on its way.

His spokesperson told the BBC: "If you come to Tower Hamlets you will find it is business as usual.

"We are working tirelessly to deliver a transformative programme for the people here because that's what they voted for."

Additional reporting by Yasmin Rufo.