The Metropolitan Police has launched a criminal investigation into suspected fraud and money laundering involving a former employee of Tower Hamlets Council in North London.
Allegations of Inappropriate Procurement and Conflicts of Interest
According to an annual 'value for money' report by external auditors EY, the allegations centre on "inappropriate procurement and approval of services and payments involving undeclared conflicts of interest." The council states the suspected crimes are historical, dating back to 2018.
The town hall initiated an internal probe, codenamed Operation NextWage, after being alerted by police. This investigation "resulted in the dismissal of the individual involved," the EY report confirms. Council officers are now conducting further checks to see if others were implicated.
Auditors Challenge Council's Internal Investigation
Despite the council's actions, EY's auditors raised significant concerns. They "challenged the adequacy and extent" of the internal investigation, suggesting the authority needed to do more to understand how the fraud was possible and if others could have committed similar acts.
The alleged offences may have caused the council a "significant loss," with a separate council report noting the "potentially criminal nature of the case" could involve serious crimes like money laundering.
In response, the council says it is taking "further procedures", including a "targeted" and "forensic" review of emails. It is also reviewing the structure and capability of its investigations team after the manager leading Operation NextWage left the authority.
Systemic Weaknesses and Council Reforms
The details emerged in an EY report that listed ten "significant weaknesses" in the council's operations, notably in contract management and procurement. EY stated the events of Operation NextWage arose from "potential weaknesses in the council's arrangements in these areas."
The auditors urged the council to "improve controls associated with payments, including segregation of duties and identification of conflicts of interest." These issues were identified during audits for the 2023/24 and 2024/25 financial years.
A council officer's report attributed many weaknesses to "legacy arrangements and historic underinvestment" but claimed "significant progress" was being made through a comprehensive procurement improvement programme.
A Tower Hamlets Council spokesperson said: "Project NextWage relates to historical issues dating back to 2018 and the council is making every effort working with partners and our auditors to ensure systems are now in place so it cannot be repeated. The allegations are subject to a police investigation so we cannot comment on details of the case."
The Metropolitan Police has been contacted for comment.
