Coronavirus could blow £35m hole in Luton Borough Council's budget

Luton Borough Council says it has written to the government to outline the extent of the problem.

A dramatic drop in passenger flights from London Luton Airport and lost business rates could cost the council between £30m and £35m, depending on how long the current lock down lasts.

“It’s too soon to see where it is all going for certain,” according to Liberal Democrat group leader and Barnfield councillor David Franks.

“The council collects all the local business rates and keeps 49 per cent,” he explained.

“So far, I have seen no statements that the government will compensate for the loss due to 12 months business rates holiday for retail and other businesses.

“As far as I can see, around 70 per cent of departures from the airport are being cancelled.

“This percentage is bound to increase as the number of empty planes going out on rescue flights reduces, and could get very close to a total shutdown.

“My own estimate is a cost to Luton Council of between £30m and £35m in the financial year 2020/21.

“But, beware, it depends on how long the crisis lasts and how quickly businesses gear up again after the shutdown,” said councillor Franks, who sits on the local authority’s scrutiny finance review group.

“It’s very difficult to put together any reliable information too soon to see where it’s all going.

“Also, this is my own estimate, not confirmed by accountants or anyone else at the town hall.”

The government would be expected to plug the impact to local authorities of the business rate loss.

Labour High Town councillor and finance portfolio holder Andy Malcolm said: “We clearly appreciate the vital importance of London Luton Airport to both the town’s economy and the council’s ability to provide key services.

“In the current crisis, the airport has been drastically affected by falling passenger numbers.

“In addition, the council is losing vital income in other areas, while making emergency financial arrangements to protect the vulnerable.

“We’ve written to the government already outlining the financial impact the crisis is having on the local authority.

“And, at the same time, we’re working to mitigate the overall effect.

“We’re doing what we can at this stage to limit non-essential spending to help the situation,” he added.

“But our focus during these unprecedented times is very firmly upon supporting the most vulnerable in our community.

“Our airport company is supporting this effort through donations to the Bedfordshire and Luton Community Foundation’s coronavirus emergency fund.

“This is intended to provide charities and community groups with access to emergency funding to enable them to continue helping those vulnerable residents.”

Anyone interested can find out how to donate, or apply for funding, via this link: http://www.blcf.org.uk/2020/03/23/bedfordshire-coronavirus-emergency-fund/.