Erinaceous at centre of second fraud probe

The company is at the centre of an inquiry into overcharging and unfinished work on a five-year housing maintenance framework for Kent Medway council. It is understood that accountants have been called in to audit work by Erinaceous, alongside internal investigations by the council.

The auditors are examining allegations that work on some projects carried out under a £3m-a-year deal was charged for, even though the work was either not carried out or was incomplete. The findings are expected to be published within weeks.

This is the second time that Erinaceous, which has suffered financial losses and senior departures over the past year, has been investigated for financial irregularities. A Serious Fraud Office probe connected to allegedly fraudulent valuations provided by subsidiary Dunlop Haywards is continuing.

A spokesperson for Medway council said: “Medway council has a contract with Erinaceous and is spending more than £4m this year to deliver on its commitment to deliver decent homes in Medway for 3,000 housing tenants.

We are currently undertaking audit checks on the work completed medway council spokesperson

“As with any large contract involving public money, we need to be sure that money is being spent wisely. We are undertaking audit checks on the works completed.”

An Erinaceous spokesperson said: “Erinaceous is co-operating fully with Medway council on its investigation. Erinaceous’ own investigation at this stage does not throw up any incidences of fraud and corruption but has highlighted areas where systems can be tightened up.”

The contract, which is being carried out by Erinaceous Property Maintenance, involves the repair and maintenance of council housing as part of the government’s decent homes programme.

Nigel Turnbull earlier this month resigned as executive chairman after leading a strategic review of the firm. He has been replaced by Lord Razzall, a Liberal Democrat peer, who becomes non-executive chairman.