TWO men who conned a Burnley housing association out of more than £300,000 have been sent to prison.

Preston Crown Court heard that the fraud took place when Burnley Council transferred its housing stock to the housing company Calico.

Steven Jardine - main proprietor of an Edinburgh-based building firm Skyline Roofing and Building Services - received payments for work that was never done.

Questions were asked following complaints and the fraud was unearthed.

The other defendant, Sean McGovern, was head of works for Calico with a £9.6mn budget.

McGovern, 35, of Boswall Gardens, and Jardine, 35, of Uppergilmore Place, both Edinburgh, admitted seven charges of obtaining a money transfer by deception.

Jardine, who has three young children, was jailed for two years and seven months and McGovern got two years and nine months.

Jardine was also disqualified from being a director for six years.

Howard Bentham, prosecuting, saidt the two men were friends and there was also a commercial relationship when both worked in Scotland before moving to Lancashire.

The fraud spanned six months between September 2004 and March 2005.

Mr Bentham said the accounting procedures of Calico were "insufficiently robust".

Work done should have been checked and records kept, but none of that happened, the court was told.

When McGovern arrived he made two changes, that payment would be made as soon as bills came in and that Skyline would be the new and favoured contractor.

Some £331,801 was allocated to Skyline but the work was not done. "In the main this was a complete fiction. These two were acting hand in glove," said Mr Bentham.

Richard Marks, for Jardine, said: "He has travelled with his wife from Scotland in the knowledge she will return on her own and that he will not be spending Christmas with her or his children," said Mr Marks.

Jardine had brought the situation on himself and as a result had lost contracts.

"It is going to be difficult for him to make a living in the building trade when he comes out of prison.

"He feels he has let himself down, let his wife down and his children down all very badly indeed," said Mr Marks.

He "succumbed" to temptation and became involved in a dishonest scheme.

Mr Marks said there had been a repayment of £410,000 - more than the money defrauded.

McGovern was not paid in cash, but in kind by holidays and lavish entertainment to the tune of £90,000 as a thank you .

Eric Elliott, defending McGovern, said: "What appears to have happened is that this defendant having known his co-accused for some time and having known his background and his celebrity status in the community, he became dazzled by what he perceived as a lifestyle he would have liked to have touched."

The offences had been committed out a sense of misguided loyalty to someone he regarded as a good friend.