HYNDBURN Borough Council is being investigated over allegations it defrauded an insurance company.

Officers at Accrington CID are examining whether funds claimed for the refurbishment of the coach house, in Oakhill Park, were not properly accounted for.

A document handed to the Lancashire Telegraph shows internal investigations into the matter have “found no evidence of fraud”.

The letter from chief executive David Welsby responds to former Friends of Oakhill Park chairman Tony Hindley’s concerns about the insurance claim and the building not being ‘fit for purpose’.

In the letter, Mr Welsby tells how two tenders were received to repair fire damage in 2004. The lowest tender was accepted by the council, but the higher quotation was used for the insurance claim.

He also admits ‘poor practice’ in that the council ‘varied the specification of works verbally’ during the refurbishment.

He writes: “You are correct that the council submitted the higher of the two quotes, however my investigation has not found evidence of fraudulent activity.

“Notwithstanding, it is clear the council is at error in respect of this claim and a letter has been sent to the loss adjuster which explains the position.”

Council leader Peter Britcliffe said the issue was “over a few thousand pounds”.

He said: “During investigations, at no stage has evidence of fraud been found and extra internal measures have been put in place.

"We are happy to co-operate with the police, but the complaint made to them is needless.”

Opposition leader Graham Jones said: “The whole refurbishment has been a disaster leaving the building unusable for anything except for storage.”

DS Mark Gillibrand, from Accrington CID, said: “A number of people have been spoken to and it is at a very early stage.

"The council have been fully co-operative with our inquiries.”