A London borough has launched a fraud investigation into allegations of corruption and abuse of position by members of staff, the Standard can reveal.
Hackney council is investigating its affiliated organisation Hackney Homes following claims that senior staff have acted dishonestly and harmed residents through an “unethical culture” for more than four years.
The assistant director of the council’s audit and anti-fraud department is leading an inquiry after a whistleblower contacted borough mayor Jules Pipe.
The insider claimed that three senior staff and a relative in a department of Hackney Homes have abused taxpayer funds and are committing fraud, while an alleged romance between two of the senior employees means members of the public are not being treated impartially, leading to a high number of complaints about service.
The council is investigating whether the alleged personal relationship has compromised the couple’s ability to take decisions in the public interest. They are also investigating claims that one of them is running a business from his mobile phone while at work, selling cars, parts and accessories.
The whistleblower further alleges that the pair have made decisions in order to gain financial or other material benefits for themselves, their family and their friends — including one of the workers employing her sister as a temporary contractor earning up to £1,000 a week, approved by their manager.
A source said: “The whistleblower has made a number of allegations which the council is urgently looking at … The suggestion is that although ultimately funded by the taxpayer, Hackney Homes is being run like a family business with an unethical culture affecting service users and their right to fair treatment for more than four years.”
Hackney’s mayor is understood to have demanded that all the allegations are “fully investigated”.
The source claimed: “Every department in Hackney council is fed up. Staff members are of the opinion that something should be done as they just create complaints for other departments.”
The four staff members being investigated declined to comment.
A spokesman for the council said: “Allegations have been made against a small number of Hackney Homes employees. These allegations are unproven and an investigation is under way.
“The council takes all allegations extremely seriously, and if evidence of wrongdoing is found further action will be taken. Until the investigation is concluded it would be inappropriate to comment further.”
