Tower Hamlets Council seeks judicial review over PwC investigation
Papers have been filed to the High Court by Tower Hamlets Council over the decision by Communities Secretary to send inspectors from PricewaterhouseCoopers into Town Hall.
The action was taken on Tuesday afternoon, just hours after Eric Pickles had accused the borough administration of holding up the investigation.
The council is accusing Mr Pickles of failing to "provide reasonable grounds" for the inspection, which was ordered following a documentary by Panorama in April.
In a statement, Tower Hamlets mayor Lutfur Rahman said: "The council has cooperated with the inspection team from the outset and this will continue whilst we attempt to secure reasonable clarification centred on the justification of the audit.
"In addition the Department for Communities and Local Government has failed to provide the council with any cost estimates for the audit apart from the vague statement that costs are likely to be 'within £1million'.
"This cost is to be borne by local taxpayers and this lack of transparency - over what is being audited and under what grounds - is not in line with the principles of public sector transparency that the Secretary of State has himself championed."
The council said 24 auditors are working on the investigation and estimated the Audit Commission would have carried out a similar inspection for around £100,000.
It also said around 10 million pieces of data and information had been requested.
On Tuesday Eric Pickles told Parliament PwC had informed him the council had not providing key information requested, which had caused the report to be delayed further than the targeted date of the end of June.
He said: "This is simply not acceptable and I am consequently extending the period for PwC to report. The cost will be met by the council."
The Panorama documentary made allegations of financial irregularities and mismanagement against the council.