ALLEGATIONS that Hyndburn Council defrauded an insurance company have been dismissed following a police investigation.

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

But police said that no criminal offence had taken place.

Inspector Dave Mangan said: “Following an allegation of fraud against Hyndburn Council an investigation was launched by Accrington Police.

“Our investigation was to discover if there had been any fraudulent activity but I am happy to say that we did not find any evidence of that.”

A complaint was made by former Friends of Oakhill Park boss Tony Hindley and allegations were made on the website of council opposition leader Graham Jones.

A document handed to the Lancashire Telegraph showed internal investigations into the matter found no evidence of fraud.

The letter from chief executive David Welsby responds to Mr Hindley’s concerns about the insurance claim and the building not being ‘fit for purpose’.

In the letter, Mr Welsby told 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.

Council bosses said this was a mistake and that the money had been paid back.

A council spokesman said: “The council always upholds the highest standards of financial management and we were always confident that this would be confirmed.

“As an authority, we are very careful about securing value for money for our taxpayers, and our track record has lead to the council being identified as a national leader in this field.”

Council leader Peter Britcliffe callde for Coun Jones to apologise.

He said: "It is completely disgraceful that police time has been wasted in this way.

“If he is not prepared to say sorry, he should stand down. That is how strongly I feel.”

Coun Jones said he was happy the details of the insurance claim blunder had been made public: "It is good news to discover that there was no fraud but there must be a public inquiry in to the matter.”