Luton Borough Council: No update on £1.1m missing from account

A £1.1m grant intended for a Mark Rutherford School building project is missing

Councillors have expressed frustration that there has been no update on the whereabouts of £1.1m that disappeared from its bank account.

The grant was supposed to help pay for a new education block at Mark Rutherford School in Bedford.

Luton Borough Council, which had been holding the money, said there had been "a sophisticated external criminal operation".

A police investigation was passed to the National Investigation Service.

The organisation handles public sector crime.

The school was expecting the release of £1.1m in grant funding for its new building under construction

The funding was a central government investment programme grant, allocated by the South East Midlands Local Enterprise Partnership (SEMLEP), the Local Democracy Reporting Service said.

The council is the partnership's accountable body and holds grant money from government, before it is directed to pay it out to investment projects.

But in April 2020, the borough's bank told the authority the £1.1m had been "misappropriated".

The sum was due to be paid to the academy towards the cost of its new building for teaching science, technology, engineering and maths (STEM) subjects.

A SEMLEP board report said the funds were paid to "persons unknown".

At a meeting of the council's scrutiny finance review group, Liberal Democrat group leader David Franks called for a report to be available at the next meeting.

He said the committee had been "repeatedly asking" for it.

Dev Gopal, director of finance, revenues and benefits, replied: "Yes, I can send a report to the next meeting. That investigation is ongoing.

"At this stage, because that inquiry is still taking place... we haven't got any further update where it's substantial enough to brief the members.

"But I'll put it in a formal report and that's the update we've been giving to the SEMLEP board as well."

A council spokesman said in January: "While reports and comments we've seen on this matter appear to suggest otherwise, we can confirm this wasn't council local authority money and we've no reason to believe it was the council's systems that were compromised."

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