Luton Council Tax: 5% rise proposed for council's slice of tax bill to “minimise” cuts to services and job losses

A 4.99 per cent increase in its share of council tax is proposed by Luton Borough Council for 2023/24 to “minimise” cuts to services and job losses.

A 2.99 per cent rise, plus a two per cent adult social care precept, falls just within the government guidelines without the need for a local referendum.

A report to the local authority’s executive said: “The budget is based on the council receiving no dividend in the next financial year from London Luton Airport Limited (LLAL), trading as Luton Rising.

“The impact of Covid-19 will continue to have an impact on the aviation industry and LLAL.

“This will be closely monitored and any measures taken which may impact on LBC’s budget will be brought back to the committee.

“The risks associated with Luton Rising and any potential reduction in revenue from the company remains one of the major budget risks facing the council.”

Inflationary pressures are expected to continue in 2023/24, as the financial recovery is likely to be prolonged, according to the report.

“This may also impact on the recovery of passenger numbers at London Luton Airport as the aviation industry may be affected by the slowing down of the economy and the impact of inflation on the cost of living,” the report explained.

“The base budget level of savings required over the next three years amounts to £12.89m or £22m including the deficit recovery plan.

“It’s clear there won’t be any further support from central government to cover the loss of income from Covid-19 for 2023/24.

“Changes in the structure of the local economy and the level of economic activity shows income has yet to return to pre-pandemic levels.

“This is causing extra budget pressures as its impact is still being felt on income and costs, so the council has to prioritise and find innovative ways to keep within budget and maintain the service delivery.

“The 2023/24 budget is based on a proposed council tax increase in Luton’s share of the tax of 2.99 per cent, in line with the government spending review announcement of a three per cent referendum limit.

“It assumes a two per cent adult social care precept as allowed in the spending review, with substantial growth in this sector,” added the report.

“If approved, these tax increases totalling 4.99 per cent will help to minimise the level of reductions in key services and jobs that would otherwise be required. This isn’t an inconsequential rise.

“But LBC has a council tax support scheme together with the hardship fund to provide some support to those in need.

“There’s considerable frustration as over the years Luton hasn’t been properly funded and some certainty about the intended funding reforms is now a necessity.”

The draft revenue budget and capital programme for 2023/24 is due to go for consultation and comment, after an executive committee meeting on Monday (January 16).

It will return to the executive next month to be recommended to full council on February 20.

The final council tax figure will also include police and fire service precepts for 2023/24.