Is it mildew?

Could it be snow-mould - called so because it usually affects stressed (drought, poor drainage etc) areas walked on after snow has fallen? Does it look like your grass has been painted? Though your wood chips should be well drained if the layer is thick enough?! The dry weather this year in the south and midlands, followed by damp humidity, and lack of drainage, could lead to same stress. Basically a fungus. You can water-in an anti fungus treatment and spike for drainage or spike and add lawn sand which will kill off fungus, moss etc. Wood chip can also get useful and highly desirable mitochondria (?or something sounding like that) which helps trees and shrubs absorb their nutrients. Otherwise got no idea. Hope someone else can help better.

In the pix the soil appears to be covered with bark if this is the case it is just part of the way it breaks down. Um 'snowmould' in November Avk? seems extremely unlikely to me especially on the borders.

I know of two people who have it - my local garden centre has had several queries. The lawn edges, where shrubs and trees have been dominating the water rations is where it has started before spreading out into the lawn and borders. On grass looks just like someone painted/dusted the leaves.

If you ever do have fox urine in your garden there is no mistaking it - my what a smell!

More likely to be Turf thatch fungal mycelium, if the white fungal growths are in the lawn too, rather than Snow Mould, though actually, turf snow mould is prevalent at this time of year. The difference is, Turf snow mould causes patches of grass to die back and, under certain conditions, pale pink fungal growths appear. The remedy's the same in either case - you need to scarify, aerate and feed the lawn. Clearly its too late to feed now, but you can apply a mosskiller at least after you've done the maintenance work of scarification and aeration. Important to do it now too if that really is Turf Thatch fungal mycelium. It may have started on the bark chips and spread into the thatch in the lawn, but it wouldn't happen if the lawn was well maintained.

My initial thoughts was the benificial fungus mycorrhiza

Thankyou everyone. I failed to mention, when I prod it with my Hoe, it acts like a powdery substance, even when the area is wet.

Fungus can act like a powder - its fine spores puff up like that. These may just be absolutely nothing to worry about, simply being part of the breakdown process in your bark chips, as MG suggested earlier - I'd only be concerned if it was all over the lawn and the lawn clearly looked unwell.

Cheers Bamboo.

I have this too and don't regard it as a problem. It is on a new border. The new chippings are actually host to a crop of mushroom like fungus. I just find them interesting.