Update demanded on investigation into £1m+ school regeneration money that went missing from Luton Council's coffers

A report on the case of more than £1m regeneration money which disappeared in the coffers of Luton Borough Council is due to be presented to a committee meeting later this month.

A written update was called for by Liberal Democrat group leader and Barnfield councillor David Franks at a meeting of the council's scrutiny finance review group on November 2.

Police began an investigation in June last year after £1.1m 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.

The local authority acted as a banker for SEMLEP, receiving the government funding before passing it on to the designated projects.

Mark Rutherford School was due to receive its funding by March 2020, but the money had disappeared. In April last year, the council discovered the finance for the school had been misappropriated and paid to "persons unknown", so it contacted Bedfordshire Police.

The county force said the investigation is being handled by the national investigation service, NATIS.

During the review group's discussion on future agendas, councillor Franks said: "There's one thing we must insist comes to the next meeting. We've been repeatedly asking for a report on the missing £1.2m of SEMLEP money.

"Not only has it not appeared, it's not even listed on the future work programme. The time has come for us to say quite clearly we want it at the next meeting."

Director finance, revenues and benefits Dev Gopal replied: "Yes, I can send a report to the next meeting. That investigation is ongoing. Both SEMLEP and ourselves, with the police, have agreed to have a joint statement.

"At this stage, because that inquiry is still taking place, and as you're aware NATIS has been involved, 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.

"The SEMLEP board, the police and ourselves have agreed we'll have a joint statement and update, as and when we're briefing the respective stakeholders.

"We can include it next time and I'll bring a report. At this point, there's nothing more which we know that we could have updated members, which was the case six months or nine months ago.

"If there's anything which comes to light, based as part of the investigation, of course we'll bring it to members.

"If councillor Franks, quite rightly, wants a report delivered in writing, we as officers can update members what progress has been made since the last time we discussed it. I'm quite happy to do that."

A council spokesman said in January: "Last year, we reported to the police that we believed there had been a highly sophisticated external criminal operation involving the funds of an external organisation.

"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.

"We can provide more details once the investigation has concluded, which will include a full update to the council's finance scrutiny committee."