Exclusive investigation reveals ward and community funding transferred to outside organisations to be held for future projects and councillors setting up undeclared companies with links to proposed funding usage.
Westmorland and Furness Council is facing a major financial headache after admitting this month its 2025/26 budget ended with a £5.22 million overspend.
Now an investigation by Penrith.Town News has uncovered how thousands of pounds from councillor-led funding pots have been handled since the authority was created — including money being transferred to outside organisations to hold for projects beyond the original funding year.
The funding was designed to support projects in local communities, with any money not committed or spent during the financial year expected to return to the council’s budget.
But arrangements have been uncovered where councillors have directed money into third-party organisations to keep hold of the funds for future use.
The sums involved total more than £450,000 since the creation of Westmorland and Furness Council in April 2023.
Each of Westmorland and Furness Council’s 65 councillors receives a £1,000 annual ward allocation to support projects and initiatives in their communities.
The funding is separate from councillor allowances and expenses.
Since the new authority was created, the ward funding pot has totalled £260,000, with no public records showing how the funding has been allocated or used.
The money is intended to be used on projects benefiting residents in individual wards.
Alongside individual councillor funding, the council created Place Action Groups (PAGs) in the former Eden area.
Each council ward area receives an additional £6,000 allocation, with projects supported through groups involving councillors and council officers.
Since April 2023, the PAG funding available has totalled £192,000.
The scheme was designed around funding projects during each financial year, with unused or unallocated money expected to return to council budgets.
Our investigation has uncovered cases where councillors have arranged for council-controlled funding to be transferred to external organisations to hold for future projects.
In Penrith, two councillors, Cllr Bell and Cllr Rudhall, as the local Westmorland and Furness Council ward councillors for Penrith North, have, according to minutes published by a community group, placed thousands of pounds into the bank account of the community group with a member of council staff as its chair.
The organisation was asked to hold the money for future use linked to a village hall project the group has no link or involvement with.
The records from a meeting of the SRG group show the group was asked to assist the Westmorland and Furness Council elected members with the allocation of the funding because the money needed to be allocated by February 2026 to avoid it being recalled back into the council budget.
The move comes despite Penrith Town Council previously withdrawing from taking on responsibility for the hall and no constituted group currently existing to take ownership of the facility.
Eamont 927 funding
Thousands of pounds from Place Action Groups have also been directed to two parish councils to be held for future use connected to plans to mark the 1,100th anniversary of the birth of England at Eamont Bridge in 927.
Westmorland and Furness Council had originally allocated £11,000 towards the Eamont 927 celebrations but later stepped away from leading event planning and reallocated the funding.
However, councillors have continued to direct Place Action Group money towards organisations holding funds linked to the celebrations.
In response to questions on the funding, a spokesperson for Westmorland and Furness Council said:
"The council is fully committed to its long-stated vision of making Westmorland and Furness a great place to live, work and thrive, notwithstanding the financial challenges we now face due to a reduced funding settlement from central government.
"Both member grants and Place Action Group (PAG) funding are effective ways of ensuring we are able to support local communities with neighbourhood projects that matter to residents and communities.
"Councillors are allocated £1,000 a year to support community projects in their local areas. They can use the funding to support community groups in their wards to help purchase equipment, hold events, or run services that will benefit local residents. The funding can also be used in combination with money from other organisations to contribute to larger projects.
"The scheme is governed by criteria to ensure the funding has the greatest impact for residents in Westmorland and Furness, meets agreed moral and ethical principles, and ensures value for money and accountability. Members must satisfy themselves that the project or activity being funded would improve the community or environment and enhance the quality of life for local residents.
"In the previous financial year, grants were awarded to support requests such as community defibrillators, warm hubs, food waste and clothing projects and helping facilitate a new playpark.
"Place Action Group (PAG) funding this year is £40,000 of devolved communities funding coordinated by Eden Locality Board, which is made up of all the Westmorland and Furness councillors in the Eden area.
"It empowers hyper-local partnerships to recommend funding to priorities like community wellbeing, youth activities, connectivity, and environmental schemes.
"These neighbourhood-level funds are reviewed and approved via locality board governance. Last year Eden Locality Board's eight PAGs recommended funding proposals to support 35 local priorities raised through community stakeholders, which were agreed and allocated by the Locality Board."
A senior council officer told us:
“The Eamont 927 Partnership is an independent body, so these are not questions I'm able to answer, I'm afraid.”
“Westmorland and Furness Council is currently investigating options around a Heritage Lottery Funding bid for a series of activities that could sit alongside the programme being developed by the Eamont 927 Partnership.”
Councillors linked to new Eamont 927 company
Our investigation has also uncovered that four Westmorland and Furness councillors, including senior members of the council, have become directors and shareholders of a newly created company linked to the Eamont 927 event.
Company records show 927 CIC was incorporated in May 2026, with the four Lib Dem councillors listed as directors: Cllr Baker, Cllr Rudhall, Cllr Vecqueray and Cllr Waite.
The records also show each councillor is listed as a shareholder and that directors can receive payment for work carried out for the company.
The investigation has found no declarations on Westmorland and Furness Council’s published register of interests showing the four councillors’ directorships of 927 CIC.
No declarations have been found in meeting records where matters relating to Eamont 927 or associated funding decisions were discussed.
Councillors are also legally required to register relevant interests, including company directorships, within 28 days of taking on such roles, and declare interests when matters connected to those interests are considered.
The findings come amid growing national scrutiny over political transparency and conflicts of interest, leading to resignations and by-elections.
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