Luton council budget branded 'sloppy' as it faces £10m overspend

A former town mayor insists services must be provided for the vulnerable as Luton Borough Council’s attempts to balance its budget against a forecast £10m overspend this year.

Labour Farley councillor Mahmood Hussain criticised colleagues making political speeches during a scrutiny meeting to assess progress on expenditure and savings during the first three months of the financial year.

He denied the local authority’s 2022/23 budget was sloppy, preferring to thank council officers for their hard work.

The council’s scrutiny finance review group was analysing the quarter one revenue and capital budget monitoring report.

Councillor Hussain was responding to the Liberal Democrat group leader and Barnfield councillor David Franks, who described it as “the sloppiest and most unrealistic budget I’ve experienced in all my years on the council”.

“We said so in February and challenged many of the assumptions being made at that time,” he explained.

Councillor Hussain reminded the committee that scrutiny is about challenging issues. “I’m surprised we’re making as if this is the full council chamber and making speeches,” he said.

“I agree we thank the officers. I couldn’t support the part about being sloppy. The officers have done their best.

“It’s most important we don’t deprive the vulnerable people of Luton, who don’t have anyone else supporting their services other than the local authority, whether children or adults.

“We owe it to them to give them the best service we can.”

The prospects for the council’s budget “remain extremely difficult”, according to a report to the review group.

This is because of “the combined challenges from the high levels of demand for services, the ongoing delivery of budgeted savings and expected pay pressures from high inflation”.

LBC’s director of finance, revenues and benefits Dev Gopal informed the meeting inflation was at two per cent when the budget was prepared.

“We set aside £5m contingency for inflationary pressures, and out of this £2.4m has been declared so far,” he told the group.

“We thought things would start to improve coming out of the pandemic and demand might start to reduce,” he said.

“But we hit a crisis in March and April, and all the assumptions are out. The forecast is moving in the wrong direction. Everyone is having to face this.”

Figures produced by Local Government Association warn of £2.4bn cost pressures on local authority services this year, rising to £3.6bn in subsequent years.

Liberal Democrat Stopsley councillor David Wynn asked why some of LBC’s “big projects” cannot be scrapped, or at least postponed.

“We’re going from bad to worse,” he warned. “And we’ll have our operational managers worrying so much about the budget they won’t have time to do their job.”

Councillors also clashed over whether £550m a year loans to the council’s airport company are secured or unsecured.

Mr Gopal added: “The legal definition is it’s a secure loan. We’ve a debenture agreement signed by the airport company. The loan has been registered with Companies House as a secured loan.”