Luton council facing £10m budget overspend - with call for Government help as cost of living crisis spirals

A financial recovery plan is being put in place by Luton Borough Council as this year’s budget is forecast to be £10m overspent.

The local authority’s Labour ruling group says almost £160m has had to be taken out of its budget during the last 12 years, “leaving little room for manoeuvre or further efficiencies”.

These latest funding pressures are due to be presented to an executive meeting on Monday (August 15).

Council leader and Labour Lewsey councillor Hazel Simmons is calling on the government for help at a time of rising inflation and soaring prices.

“We know how much the cost of living crisis is impacting the lives of many Luton residents and it’s only going to get worse,” she warned in a statement.

“In the same way households are struggling with rising costs, it’s also becoming more expensive for the council to provide the services that people need.

“This comes at a time when our budgets are under immense strain already, with savings required previously because of the impact of the pandemic and austerity.

“We’re seeing an increase in demand for our services at present, as people struggle with the cost of living.

“The trading services, which provide valuable income to support our work, are being adversely affected because of the financial challenges so many businesses are facing.

“We’re having to put a recovery plan in place now, as this year’s budget is forecast to be £10m overspent. This is the reality for local authorities across the country at the moment,” she explained.

“And it’s been widely reported that inflation, energy costs and other current challenges are predicted to lead to £2.4bn in extra cost pressures to councils this year alone, rising to £3.6bn in 2024/25.

“Despite all of this, the government has indicated so far that no extra funding will be provided to help meet the exceptional increases faced by local authorities.

“It’s therefore down to councils to absorb these pressures. It feels like we’re back to the dark days of austerity.

“But it’s significantly worse this time because we’ve had to take almost £160m out of our budget over the last 12 years, so there’s little room for manoeuvre or further efficiencies.”

Councillor Simmons is adding her voice to the many leading political and economic commentators warning of potential disaster for local communities and councils, unless the government acts immediately to address the impact of soaring inflation and the cost of living crisis.

“Councils in more deprived areas, such as Luton, haven’t been allocated our fair share of funding from central government as part of the finance settlement,” she said. “We’re still waiting for the fair funding review, which is long overdue.

“Now we’re being forced into further difficult decisions, which feels like punishing our communities at a time when they’re suffering so much and need us more than ever.

“I would strongly urge the government to look closely at what’s happening in local government and act now before it’s too late.”