‘Further reductions’ faced by council in aftermath of Chancellor’s Spending Review

Luton Town Hall
Luton Town Hall

As further cutbacks were announced in the Chancellor’s Spending Review on Wednesday, Luton Borough Council issued a response on what we can expect in the next five years.

Crucially for the council, its £64m revenue support grant from central government is to be scrapped altogether by 2020 - with further savings of £31m to be made.

LBC stated that in light of increasing demands on social care and housing, it has become necessary to impose a ban on non-essential spending.

Chief Executive Trevor Holden said: “It is absolutely vital we take swift and decisive action within the authority in order to bring spending back into line.

“As a council, Luton has a high dependency on central government funding, referred to as the revenue support grant. This grant, we anticipate will be reduced to zero by 2020 from £64m in 2013/4.”

As part of the Spending Review, local councils are being advised to draw on their reserves and they will be allowed to spend 100% of receipts from selling off council-owned property.

It was also announced that all revenue from business rates would be reserved by local government before the end of parliament.

Mr Holden said: “The proposed retention of business rates in no way compensates for this massive loss at the same time as demands for services are increasing.

“The best way for us to address this is to drive the local economy, which is exactly why Luton council developed its Investment Framework, and I am pleased to confirm the Chancellor’s announcement of 26 additional enterprise zones included support for a new Luton Airport Enterprise Zone which will result in significant inward investment, economic growth and jobs for the borough.

“I am certain we will navigate our way through this situation, but if we don’t address it now it will only worsen our overall financial position.”

LBC stated that social care and homelessness are the main reasons for its current forecast overspend of £5.2m in the 2015/16 budget.