Government support dubbed 'not unhelpful' as £1.2m more savings agreed in Luton budget

A government decision allowing Luton Borough Council to borrow more money has been cautiously welcomed at its budget setting meeting.

Thursday, 18th February 2021, 1:35 pm
Updated Thursday, 18th February 2021, 1:36 pm

But finance portfolio holder and Labour High Town councillor Andy Malcolm described the agreement as "not the grant support" councillors and the people of Luton campaigned for.

The government is allowing the council to borrow up to £35m to fund services this year, with a further £14m expected to follow in 2021/22.

"We should be mindful that, as this is borrowing, it will have to be repaid," warned councillor Malcolm, presenting next year's budget to full council.

Government support dubbed 'not unhelpful' as £1.2m more savings agreed in Luton budget

"What a year it's been," he said. "It's hard to capture the enormity of what we've been through together.

"We've now made £156.6m of savings during the last eight years.

"I can also report that we are making good progress in the 2020/21 cuts, with £12.5m out of the total of £16.6m on track to be delivered this year.

"The extra savings in this budget total £1.2m taking the overall level, including the emergency measures, to £22m."

The 2021/22 budget is based on a proposed council tax increase in Luton’s share of the tax of 1.99 per cent and a three per cent adult social care precept, according to the budget report.

"These tax increases of 4.99 per cent will help to minimise the level of reductions in key services and jobs that otherwise would be required," said the report.

"The government aims to move to a 75 per cent business rate retention scheme in future years.

"This presents the council with a major strategic challenge in the medium-term, as it needs to become financially self-supporting.

"An increase in business rates retention is expected to replace revenue support grant and other grants.

"The budget is based on the council receiving no dividend from London Luton Airport Limited (LLAL) in 2021/2.

"This figure was anticipated to be £16m for 2019/20, and the final dividend declared by LLAL was £19.125m.

"The reduction in revenue from LLAL is the major budget risk facing the council," added the report.

"There was substantial extra funding and staffing to enable the children and families service to implement its Ofsted improvement plan, and this is continued in 2021/22.

"Budget savings and income increases of just under £6m are expected to have only a limited impact on staff numbers, so the number of redundancies expected next year will be very low, with every effort made to redeploy staff."

The council's 2021/22 budget was approved, with Labour and Conservative councillors voting in favour, while the Liberal Democrats opposed it.