A finance committee chairman has criticised the length of time being taken by a local authority to investigate why more than £1m regeneration money disappeared in the Luton Borough Council coffers.
Describing two years as a lengthy wait “for something technically so simple”, Conservative group leader and Bramingham councillor John Young said the council’s scrutiny finance review group “is upset about the delay.”
Bedfordshire Police began an investigation in June last year after £1.2m funding destined for the redevelopment of Mark Rutherford School in Bedford mysteriously vanished.
The money was set aside by SEMLEP (South East Midlands Local Enterprise Partnership), which issues government grants for local projects.
A written update was presented to the review group about “the ongoing work being undertaken by the national investigation service, NATIS, following the fraudulent misappropriation of funding” for the school.
The local authority acted as a banker for SEMLEP, receiving the government funding before passing it on to the designated projects.
The school was due to receive its funding by March 2020, but the money had disappeared. The review group heard it has received money for the project now.
In April last year, the council discovered the finance for the school had been misappropriated and paid to “persons unknown”, so it contacted the police.
Director finance, revenues and benefits Dev Gopal told the group: “External auditors are preparing a report which will be submitted to the audit committee on September 9th and that should address the points raised by members.
“There’s still an investigation going on. I can’t go into the details of that fraud,” he explained. “It was reported to the police and eventually transferred to NATIS.
“There was another request to bring a report on SEMLEP funding for Mark Rutherford School in Bedford.
“Paragraph four says it wasn’t money which belonged to the council and we’ve no reason to believe it was the council’s system which was compromised.
“There’s no subsequent extra development or information available which I can bring here. There’s the police, SEMLEP and the council.
“When further information is received an update will be provided to the review group, with a full report on what’s been concluded.”
Asked whether the money belonged to the local authority or council taxpayers in Luton, Mr Gopal said: “This was external funding belonging to the council and it was a highly sophisticated external criminal operation.
“The council’s cooperating as is SEMLEP to get to the bottom of this.”
Liberal Democrat Barnfield councillor David Franks said it was still “taxpayers’ money”.
Liberal Democrat Round Green councillor Steve Moore inquired whether there would be a prompt update or if there would be a wait of at least several months.
Mr Gopal replied: “I can’t give you a definite date at this stage. I’m not an investigator, but I’ll go back and get that information.”
Councillor Young, who chairs the review group, said: “The general mood of the meeting really is the slow progress that’s being made in this investigation.
“Where that fault lies I don’t know, but two years is a long time to wait for something which technically is quite simple.
“It was just an action that was taken. Surely someone in the last two years could come up with a reply.
“We’ll note the slow progress made to date and realise you’ve been given advice not to give out certain information.
“We have to respect that, but the whole committee is upset about the delay.”
