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 Cllr 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.
While the money has yet to be recovered, acting head at the school, Kelli Foster, told the Bedford Independent last summer that “work is continuing and builders are still being paid.”
Questions about how this has been possible are now being asked.
Liberal Democrat Barnfield Cllr David Franks asked: “Did Mark Rutherford School get its money? And where did it come from?
“Was it from SEMLEP (South East Midlands Local Enterprise Partnership) reserves, council reserves or did the government come up with another £1.2m?”
Mr Gopal replied: “Yes. At this stage I can’t go into that detail. If we go more into the mechanics of it I’ll have to contact SEMLEP to come up with a joint statement.
“But one of the things is the school has got its funding. The project is going.”
Councillor Franks turned his attention to questions about the process and the procedure in the relationship between the council, the government and SEMLEP.
“I understand the council is the accountable body and holds the funds, so is it true the council dispenses funds in accordance with instructions received from SEMLEP?” he said.
Mr Gopal responded: “The council is an accountable body, absolutely, so the fund is released to the local authority for projects approved by the SEMLEP board.
“Once the board agree those schemes, we get an instruction from them and we release the transfer from the bank account here.”
Councillor Franks inquired whether Mr Gopal recalled the date or month when the fact that £1.2m was missing was discovered.
Mr Gopal explained: “Again, I would say we’re going into specifics on this matter. As it’s an ongoing investigation it’s not information we’ve provided. I’m sure you appreciate that.”
Councillor Franks retorted: “Indeed, I don’t appreciate it. I can look it up quite easily by going to the Luton Today website and discover the date announced that the money was missing.
“If the editor at the Luton News knows when it disappeared why can’t you tell us when it went missing?”
Mr Gopal suggested: “One question is leading to another and I’m a bit conscious about where we’re heading. The information in the Luton News is in the public domain. The specific questions I’m quite happy to take back.
“But I’ll not be going into the detail or chronology of when it happened, how it happened, whether there was an email or a phone call, or what was the date. I don’t have that specific information.”
Councillor Franks said: “The fact is it’s nearly two years since this money went missing.
“An investigation is going on which we’re told doesn’t seem to be getting anywhere near the truth. It ought to have been concluded ages ago.
“The more we’re denied basic answers, such as when it was known the money went missing, please don’t be surprised when people start thinking we’re heading for yet another cover-up.”
Mr Gopal remarked: “I don’t stand by all the assertions from councillor Franks with due respect. We’re not restricting information.
“What we’re saying is from a legal point of view, when there’s an ongoing investigation, I can’t breach that and start to disclose information which I’ve been instructed not to comment on.
“It’s not we’re withholding information deliberately.”
A written update was also presented to the review group about “the ongoing work being undertaken by the national investigation service, NATIS, into the missing money.
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.”
Cllr Franks said it was still “taxpayers’ money”.
Liberal Democrat Round Green Cllr 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.”
by Euan Duncan Local Democracy Reporter
and Bedford Independent’s Paul Hutchinson