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Luton council: £1.1m missing from Mark Rutherford School works fund

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

Police are investigating after £1.1m earmarked for a new school building vanished from a council 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 it had been the victim of "a sophisticated external criminal operation".

The school said it had faced "significant cash flow issues" and was considering legal action.

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

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

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

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

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 marked "highly confidential", but seen by the BBC, said the funds were paid to "persons unknown".

Luton Borough Council said: "We believe there has been a sophisticated external criminal operation and the matter has been referred to the national investigation service who are investigating.

"We have not been told that any member of staff at Luton Council is under investigation."

Bedfordshire Police said it had passed the case on to the National Investigation Service (Natis) which looks into public sector crime.

The school's acting head teacher Kelli Foster said she hoped the building would be completed by July.

"It's just making sure we can get that funding to complete the project," she said.

SEMLEP chief executive Hilary Chipping said the matter was "unprecedented" and it was working with police.

Its board will meet on Friday to consider signing off a plan to use money from a different funding pot to help pay for the building.

Natis said an investigation was ongoing and it could not comment further.