Luton Council Tax: 'difficult' budget approved with rise in council's slice of tax bill

Approved loans to Luton Borough Council’s airport company now top £500m, a meeting heard.

A further £8.5m is being allocated to London Luton Airport Limited, trading as Luton Rising, with approved loans now totalling £508m, according to Liberal Democrat group leader and Barnfield councillor David Franks.

A 2.99 per cent increase in LBC’s share of council tax for 2023/24 plus a two per cent adult social care precept was agreed by 28 votes to 12 at a budget full council meeting.

Labour Limbury councillor and finance portfolio holder Rob Roche explained: “The long awaited review of local government funding has been delayed for another two years, which puts us in a difficult position.

“Historically this council hasn’t had its fair share of distribution of that funding. The shortfall of one point five per cent represents £2m in cash terms for Luton.

“The overall revenue budget has increased by about £8.4m. This is a measure of the extent to which unavoidable cost increases, including pay, inflation and demand for services, exceed savings, increases in grant funding and cost reductions.

“This gap necessitates raising the council tax by five per cent (sic) as allowed by central government to deliver a balanced budget.

“Some highlights include no cuts in services, no planned redundancies, significant investment in local and front line services, tackling climate change, and town centre regeneration and housing.”

Liberal Democrat group leader and Barnfield councillor David Franks said: “You’re planning to lend the airport company a further £8.5m to finance the development consent order (DCO) preparation.

“We’re told the total of approved loans to the airport company now stands at £508m. Does this include the amount the company will need to cover the £70m overspend on the Luton DART system?”

Councillor Roche replied: “The loans against Luton Rising includes the DART. It will automatically come back and we’ll look at it when it’s completed. There are no loans allocated for the airport in this budget.

“But the benefit of London Luton Airport is the interest we receive, which was £24m last year, and also going up to another £4m into general fund to help front line services.

“It doesn’t have any bearing whatsoever on the people of Luton.”

Councillor Franks added: “The capital programme spells out you’re planning to lend the airport company a further £8.5m. The agenda makes that quite clear.”

Liberal Democrat Stopsley councillor David Wynn described the level of risk in the budget as “higher than we’ve ever seen”, warning: “It’s taking this council into a position where frankly it’s in danger of being bankrupt.”

Councillor Roche replied: “The risk will be managed by the way of good financial prudence. Every project has to come with a business plan and with funding before it’s started. So it must go through Section 151 and all the processes.”

Labour Challney councillor Tom Shaw asked whether street cleansing, rubbish hit squads for flytipping, walking and cycling infrastructure and EV charging programmes are included in the budget.

Councillor Roche acknowledged these are, along with a net zero road map by 2040.