A police investigation into allegations Hyndburn Council defrauded an insurance company over the cost of refurbishing a building in Oakhill Park has found there is no case to answer.
Accrington CID examined whether funds claimed from an insurance company to refurbish the Coach House, after it was destroyed by a fire in 2004, could be properly accounted for.
The complaint was originally made by Tony Hindley, of the Friends of Oakhill Park, and allegations were repeated by Hyndburn Council opposition leader Graham Jones on his internet blog, which has since been amended.
Inspector Dave Mangan, of Accrington Police, said: "Following an allegation of fraud against Hyndburn Council an investigation was launched by Accrington detectives. Officers discovered that there was no criminal conduct by any member of the council, and we do not intend to pursue the matter further."
The council launched three internal investigations into the Coach House refurbishment, before the police were drafted in.
The internal investigations were launched after the council received complaints over the standard of the refurbishment and the building no longer being fit for purpose.
They revealed that an incorrect quote had initially been given to the insurance company following an error, but money had been paid back and there was no evidence of fraud.
Council leader Councillor Peter Britcliffe described Councillor’s Jones’ allegations as ‘absolutely ridiculous’ and said he had been forced into a ‘humiliating climbdown’ over the affair.
He added: "A few weeks ago he was claiming on his website that he had personally found fraud and corruption.
"He has now been made to look very foolish and has been busy trying to cover his tracks by erasing all mention of this from his blog."
Councillor Jones defended his comments, saying: "The police investigation has failed to get to the bottom of this matter as their investigation concentrated on the transfer of money.
"The Labour party would still like to see an open review of the Coach House project, and if the council has nothing to hide, can they explain why they refuse to do so?
"We would also like to see a structural surveyor check the work on the building.
"All we want is transparency and honesty."