'Immature, misleading and the worst form of politics': Council hits back at Lib Dems over Luton Airport finance

The Liberal Democrat opposition group insisted talks about the loan be held in public at a scrutiny finance review group meeting (see our report here).

Lib Dem councillors later signalled their opposition to the £60m loan to London Luton Airport Limited (LLAL).

And they claimed proposed cuts to children’s centres, the school improvement service and the council tax reduction scheme could be unnecessary without the loan.

Today, a Luton Borough Council spokesman said: “These are misleading and inaccurate comments, and we refute them.

“Borrowings undertaken by LLAL as part of its stabilisation plan have no detrimental impact on the council’s emergency budget.

"This had to be approved solely because of the government’s refusal so far to adequately compensate Luton for the devastating losses it has incurred because of the coronavirus pandemic.

“It's wrong to suggest any link with the possible closure of children’s centres.

"Income from the airport is in fact what funds a substantial proportion of our services and continues to keep council tax in Luton the lowest in Bedfordshire.

“Executive has yet to make a decision about the latest important proposals," he added.

"When it does so, members will consider that LLAL’s borrowing is secured against assets now worth more than £840m and has mostly been planned already.

"It also delivers a positive return on investment for Luton of £14m this year because LLAL repays at a greater interest rate than the council can borrow at.

“Luton owns the airport solely for the huge benefits it enables us to deliver to local communities and the positive impacts we can make on people’s lives.

“Without the significant £26m increase in annual income that LLAL has given the council since 2012 through investment, and the £9m it provides annually for vital charities and voluntary organisations, local services in the town would have been decimated beyond comprehension already.”

Labour High Town councillor Andy Malcolm, portfolio holder for finance and chairman of LLAL, accused the Liberal Democrats of being "financially illiterate or willing to mislead the public" in the hope of "stoking political division in our town".

Councillor Malcolm said: "In the context of coronavirus, we're working hard to protect our town and having to take highly challenging decisions to stabilise the finances of our council.

"This attempt to divide risks damage and division when the mature approach would be to pull together for the good of Luton.

"The story put out by the opposition group conflates borrowing to invest with the provision of services, mixing up capital and revenue spend.

"Perhaps, most gallingly, the Liberal Democrats were on the board of our airport company when the projects they're now railing against were agreed.

"Their story is immature, misleading and the worst form of politics.”