£1.8m Health Grant Misused by Council 2026

Key Points

• Barking and Dagenham Council misused nearly £2 million of a government public health grant originally intended for improving public health initiatives, such as stop smoking schemes.
• The misuse was uncovered during a review of public health spending commissioned by the council in 2024.
• Labour councillor Maureen Worby, the council’s cabinet member for health, described the discovery as a “shock” and noted initial evidence showed departments using funds for unintended purposes.
• The total potential ineligible spend identified was £1.8 million.
• Instead of repaying the grant to the Department of Health and Social Care, the council must find equivalent funds within its own budget to allocate to health spending.
• The government was reassured that the misspending was not deliberate, and the council has implemented stricter measures for future use of the funds.
• The public health grant is ringfenced under the National Health Service Act 2006, meaning it should only be spent on specified areas like stop smoking schemes, enforcement against illegal vapes, and diet and exercise programmes in schools.
• Council departments across various areas used the grant for purposes outside this ringfence.
• Matthew Cole, the council’s director of health, admitted to distributing the grant to other departments without oversight into their budgets or spending.
• Cole stated that council officers lacked understanding of the ringfence conditions, treating the money as their own once allocated.
• No disciplinary action was taken against any council officer involved, with the incident treated as a “learning point”.
• New safeguards include direct oversight by Cole over other departments’ spending of the grant, plus signed agreements committing departments to “key deliverables”.

Barking and Dagenham (East London Times) February 16, 2026 – Barking and Dagenham Council has admitted to misusing almost £2 million of a public health grant from the Department of Health and Social Care, with funds diverted from intended purposes like stop smoking schemes to other departmental spending, councillors were informed this week.​

The discovery, labelled a “shock” by Labour councillor Maureen Worby, the council’s cabinet member for health, emerged from an independent review of public health spending commissioned in 2024. Instead of facing repayment demands, the Labour-run council must now source £1.8 million from its own budget to restore health allocations. Worby emphasised that the government accepted the errors were unintentional, prompting new controls on grant usage.

What Led to the Misuse of the £1.8m Grant?

As reported in council discussions covered by local outlets, the public health grant is provided by central government to councils for specific resident health improvements. These include stop smoking schemes, action against illegal vapes, and school-based diet and exercise programmes, often delivered across multiple council departments. However, the funds are ringfenced by law under the National Health Service Act 2006, restricting use to designated areas only.

The council’s independent review in 2024 revealed that several departments had spent portions outside these boundaries. Labour councillor Maureen Worby stated:

“The initial evidence that came to light was that some departments within the council were using the allocation for purposes that it hadn’t been given for.”

She added:

“It came as a shock that actually what we found in the end was that there was £1.8m of potential ineligible spend.”

No specific alternative uses were detailed publicly, but the review confirmed the total ineligible amount at £1.8 million. Councillors learned of this at an overview and scrutiny committee meeting earlier this week, highlighting a significant lapse in financial governance.

Who Is Responsible for Distributing the Funds?

Matthew Cole, the council’s director of health, took responsibility for allocating the grant across departments. Speaking at the scrutiny committee, Cole explained:

“Because I couldn’t see other departments’ budgets and how it was spent, I had no oversight.”

He further noted a broader misunderstanding:

“I don’t think people understood the ringfence. They basically felt they were given the money and it was theirs.”

Cole’s admission underscores siloed departmental operations, where visibility into spending was absent.

Despite this, Cole confirmed no council officer faced disciplinary action. He described the investigation as a “learning point” for the town hall, avoiding punitive measures in favour of procedural reform.

How Has the Council Responded to the Shock Discovery?

Councillor Worby detailed immediate changes post-review. She said Matthew Cole now holds direct oversight of how other departments utilise the public health grant. Additionally, departments must sign formal agreements outlining “key deliverables” before receiving funds.

Worby reassured that these steps satisfied the Department of Health and Social Care, which viewed the misuse as non-deliberate. Rather than clawback, the council faces a budget-neutral correction: finding £1.8 million internally to redirect towards eligible health initiatives.

This approach maintains service continuity while addressing the shortfall, though it strains overall council finances amid competing local pressures.

Why Was the Misspending Not Deliberate?

Government officials were “reassured” by evidence showing no intent behind the diversions, according to Worby. The review attributed issues to poor awareness of ringfencing rules rather than fraud. Cole echoed this, pointing to a collective failure in comprehension rather than wilful misconduct.

The council’s proactive commissioning of the 2024 independent review demonstrated accountability, helping secure leniency. No statements suggest ongoing probes or external audits beyond the internal process.

What Are the Ringfenced Rules for Public Health Grants?

Under the National Health Service Act 2006, public health grants must target explicit health improvements. Eligible spends encompass stop smoking schemes, vape enforcement, and school nutrition programmes. Cross-departmental delivery is permitted, but only within these parameters.

Barking and Dagenham’s breach occurred through unauthorised reallocations. The council acknowledged this as a compliance gap, now bridged by oversight and contracts.

What Consequences Does the Council Face?

The primary repercussion is self-funded restitution: £1.8 million reallocated from general budget to health. No repayment to government is required, preserving grant integrity without fiscal penalty from central sources.

Councillors face no reported sanctions, and officer discipline was waived. Long-term, stricter protocols aim to prevent recurrence, potentially enhancing future grant management.

How Does This Affect Local Public Health Services?

Residents’ access to schemes like stop smoking support remains intact, as restored funding ensures continuity. However, budget reprioritisation may impact other services, given east London’s stretched resources.

The incident raises questions on grant efficacy borough-wide. Similar reviews elsewhere could uncover parallels, prompting national scrutiny of ringfence adherence.

What Measures Prevent Future Misuse?

New systems include Cole’s direct monitoring and mandatory departmental pledges to deliverables. These bind recipients contractually, enforcing accountability.

Worby highlighted government satisfaction with these reforms, positioning Barking and Dagenham as responsive. Ongoing scrutiny committee oversight will track compliance.

Broader Context: Public Health Funding Challenges?

Councils nationwide receive ringfenced grants amid rising demands. Barking and Dagenham’s case spotlights oversight risks in multi-departmental models. While isolated, it underscores training needs on legal constraints.

No parallel cases were cited in disclosures, but the “learning point” narrative suggests sector-wide relevance.