The government this week significantly escalated its intervention in Tower Hamlets Council, issuing its envoys with reserve powers to make decisions in relation to leadership, governance, continuous improvement, culture, partnerships and use of resources. The decision came after the Secretary of State concluded that Mayor Lutfur Rahman’s administration has failed to grip its own problems more than two years after Ministers first ordered an independent inspection.
New statutory Directions issued by Secretary of State Steve Reed take effect immediately. They grant government-appointed Ministerial Envoys reserve powers over the council’s financial governance, scrutiny of decision-making, and the recruitment and dismissal of its most senior officers. The mayor’s own Transformation and Assurance Board is to be disbanded and replaced with an Envoy-led Improvement Board.
Investigators will now conduct a formal deep dive into how jobs and promotions were awarded, how social housing was allocated, how grants were distributed, and how planning and licensing decisions were made, as well as looking at decision making inside the Mayor’s office.
The escalation follows the publication yesterday of the Ministerial Envoys’ second progress report, which found that despite a year of statutory intervention, the council’s leadership remains “unnecessarily defensive” and focused on “managing the message and writing a plan, rather than on deeper ownership of the Council’s issues.” The Envoys concluded that “the overall pace of change and the grip of the officer and member leadership to drive improvement is insufficient.”
The Secretary of State also issued a direct warning to all Tower Hamlets councillors about compliance with the Code of Recommended Practice on Local Authority Publicity ahead of May’s elections, an unusual step reflecting the government’s lack of confidence in the administration’s conduct.
Cllr Sirajul Islam, Leader of the Tower Hamlets Labour Group and Labour’s candidate for Mayor, said:
“After more than two years of chances since Ministers first ordered a Best Value inspection of this council, the government has run out of patience with Lutfur Rahman and his Aspire councillors. Today they’ve given powers to their envoys to make decisions on behalf of the council, because Mayor Lutfur Rahman has shown himself incapable of making the changes needed to his leadership.
The Ministerial Envoys put it plainly: his leadership has been focused on managing the message rather than fixing things. Residents have paid the price. If I am elected Mayor in May, I will tackle these problems head on and clean up Aspire’s mess in the Town Hall.”
Cllr Mufeedah Bustin, Deputy Leader of the Tower Hamlets Labour Group, said:
“What strikes me about today’s findings is what they mean for ordinary residents. Statutory audit recommendations. A projected £18 million overspend. Savings targets the government’s own inspectors say are not yet assured as deliverable. Behind every one of those numbers are services that residents depend on. This administration has been too busy protecting its own image to protect the people it was elected to serve.”
ENDS
NOTES TO EDITORS
What the new Directions require:
- Full co-operation with the deep dive into recruitment, housing allocations, grants, licensing, planning and the Mayor’s Office
- Implementation of the Continuous Improvement Plan reported to Full Council quarterly
- Disbandment of the Transformation and Assurance Board and establishment of an Envoy-led Improvement Board
Reserve powers now held by the Envoys:
- Governance and scrutiny of decision-making
- Strategic financial management and financial governance
- Operating model and redesign of services
- Recruitment, structure, performance management and dismissal of senior and statutory officers
Key findings from the Envoys’ second report (published yesterday):
- “The overall pace of change and the grip of the officer and member leadership to drive improvement is insufficient”
- Leadership described as “unnecessarily defensive”
- Energy centred on “managing the message and writing a plan, rather than on deeper ownership of the Council’s issues”
- 31% of council staff say it is not safe to speak up
- Four statutory audit recommendations outstanding — auditor does not expect them resolved until 2028
- Documents can be found here: Statutory intervention: London Borough of Tower Hamlets – GOV.UK
Intervention timeline:
- February 2024 — Best Value Inspection ordered
- November 2024 — Inspection report published
- January 2025 — Statutory intervention begins; Envoys appointed
- July 2025 — Envoys’ first report: insufficient political buy-in
- January 2026 — Government proposes strengthened package; cites new failure on financial management
- 17 March 2026 — Strengthened Directions confirmed and in force today