Luton council tax could be set to rise by 2.99%
Council tax in Luton is set to rise by nearly three per cent next year, subject to final approval.
The borough council needs to make £27.3m additional savings over the next five years, with £11.4m of these needing to be found in 2019/20.
Financial reports presented to the local authority’s executive show an above inflation increase of 2.99 per cent for 2019/20.
The proposed budget for next year should still ensure that Luton maintains the lowest per household council tax rate in Bedfordshire, according to the council.
Extra investment is being targeted at the rising cost of adult social care, and the expense of residential placements because of children with complex needs.
There is also increasing demand for temporary accommodation.
And the council faces capital expenditure of nearly £365m over a three-year period mainly to fund the London Luton Direct Air to Rail Transport (DART), Bartlett Square development and the airport planning strategy.
But it also needs to cover the establishment of Foxhall Homes, an additional wholly owned subsidiary, and the Temporary Accommodation Purchasing Scheme (TAPS).
It is estimated interest costs will be in excess of £40m during the next three years no matter which form of finance is agreed.
During 2018/19, the council successfully applied for £100m of Public Works Loan Board special infrastructure rate to finance the DART project.
Talks are continuing with the European Investment Bank (EIB) for an additional loan to finance the remaining costs of delivering the DART project.
The council is proposing a full review of its annual borrowing strategy, requiring the support of the executive and full council, when the final business cases for the major investments are ready for approval.
Councillor Andy Malcolm, portfolio holder for finance told the executive: “It will be brought back to the executive on February 11th and approval of the full council at the budget meeting on February 20th.
“Two engagement events with the public are due to be held in The Mall on Friday 18th and Saturday 19th January.
“This will help people understand more about the position the council is in financially and why it’s making the decisions it is, and how it’s going about that process, while managing really significant reducations in budget year-on-year.
“We are asking executive to approve the acquisition of shares up to £50,000 in the local education partnership, which is the Luton Learning and Community Partnership Limited. So our ownership of that company will increase from 46 per cent to 50 per cent.”
Business rate payers will be consulted, as well as the council’s scrutiny finance review group.
Cllr Jacqui Burnett said: “I am really pleased this is coming in early and that the officers have not allowed fear to take over in grappling with the challenges that we’ve had to deal with since 2010.
“As much as we’ve had it harder as a challenge compared to some local authorities, we have not allowed fear to paralyse us in making decisions.
“I am so glad fear hasn’t paralysed us and we’re in a much better place than some other local authorities who delayed making some hard decisions in the past.”
Executive members agreed the budget for consultation before it is debated at a full council meeting next month.