As part of a Penrith.Town News investigation into the spending of public money by Westmorland and Furness Council and Penrith Town Council, we have uncovered in council payment documents that Westmorland and Furness Council has since April 2023 paid millions of pounds to its insurance provider for insurance claim settlements for claims that do not yet exist.
Since April 2023, when Westmorland and Furness Council replaced the previous councils, over £5 million has been paid to the council’s insurance provider, including millions as payments for insurance claim settlements. These payments were made “on-account” before any claims were made, effectively placing public funds in a private company’s bank account, where they could potentially earn interest until used to settle claims.
Recent “on-account” payments by the council for potential future claim settlements include:
24 September 2025 – £100,000
24 September 2025 – £50,000
21 July 2025 – £100,000
3 June 2025 – £100,000
10 June 2025 – £100,000
Some monthly totals for these insurance claim settlements have exceeded £500,000.
A council spokesperson said:
“The amounts concerned do not relate to specific claims but are 'on-account' payments made to our insurers from which claims are settled as and when required. The council receives multiple liability and motor compensation claims each month, so periodically paying over a lump sum is the most efficient way of funding these claims. The council receives a monthly report detailing which claims the money has been used against.”
Records obtained by Penrith.Town News show that in the same three-year period, the council paid just £106,042 in compensation for pothole claims, with individual settlements ranging from £50 to £11,000.
the table shows the actual insurance claim compensation paid by Westmorland & Furness Council as the local Highway authority from 1st April 2023 to July 2025:
A council employee who wished to remain anonymous over concerns for their job, speaking to Penrith.Town about the substantial amounts paid on account by the council , said: “How can anyone, including the council’s new S151 officer, look at that and not ask questions? Where is the accountability over the causes of the claims and the public money handed over?”
Westmorland and Furness Council is currently grappling with a £10 million budget black hole, with all departments being forced to find savings to plug the shortfall ahead of the council’s budget-setting process. The budget is due to go to public consultation shortly, with another maximum council tax increase expected for households as the council seeks to balance the books.
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